One of Australia’s top mining journalists, Kristie Batten writes for Stockhead every week in her regular column placing a watchful eye on the movers and shakers of the small cap resources scene.

 

While many of its peers abandon the lithium sector, Green Technology Metals is priming itself for development.

The company has quietly been ticking off milestones as it works towards lithium production from its Seymour project in Ontario, Canada.

Just over a week ago, GT1 released an updated preliminary economic assessment for Seymour, which the company believes could be Ontario’s first lithium mine.

The company had previously released a PEA into the joint development of Seymour and the nearby Root project.

The aim of the optimised PEA was to establish a more resilient operation in the current weak lithium price environment.

The revised PEA looked at a 1.2 million tonne per annum operation to produce 130,000 tonnes of 5.5% spodumene per year.

C1 costs were forecast at US$753 per tonne, while all-in sustaining costs were estimated at US$916/t.

Capital costs were US$182 million for a low-strip open pit and underground mining operation.

Compared to the 2023 PEA, the strip ratio was reduced to 5.4:1 from 18.1:1, while total material movement was reduced by around 70%.

Average annual EBITDA was forecast at US$122 million.

The study returned a post-tax net present value of US$251 million, internal rate of return of 33% and payback period of 3.5 years.

The study used an average 5.5% spodumene price of US$1851/t.

While that seems high given the current price of around US$885/t, the assumption was based on Fastmarkets’ forecasts.

Fastmarkets expects 5.5% spodumene to be trading at US$1146/t in 2027, which is when GT1 is aiming to kick off production, steadily rising to US$2658/t from 2034 onwards.

Canaccord Genuity analyst Tim McCormack told WA Mining Club on Thursday that while the market was weak, electric vehicle demand was continuing to increase.

“That demand is going to increase year-on-year and we get into a supply demand balance in about two years’ time, and that’s where we should see prices start to trend north,” he said.

 

DFS now the focus

The results of the PEA have encouraged GT1 to move to a definitive feasibility study.

Infill drilling, geotechnical assessments, mining model optimisation, contractor costing, metallurgical test work, logistics studies and water storage and site run-off treatment facility optimisations are already underway.

GT1 is also planning drilling at the Junior project, 20km from Seymour, with the aim of increasing the current Seymour resource of 10.3Mt at 1.03% lithium oxide.

The company is aiming to reach construction readiness at Seymour and make a final investment decision next year.

Last year, GT1 announced a partnership with South Korean cathode manufacturer EcoPro Innovation Co.

EcoPro invested $8 million in GT1 and was granted exclusive rights to negotiate and agree staged asset-level investments in the Seymour and Root projects.

The pair will also potentially co-fund a pre-feasibility study into a proposed lithium conversion facility in Canada.

GT1 confirmed talks with EcoPro around a project-level investment were ongoing with completion targeted for the current half.

The company received a letter of intent from the Canadian government’s Critical Minerals Infrastructure Fund, which granted conditional approval for C$5.5 million in funding to support road infrastructure development for the Seymour project.

Just before Christmas, GT1 also received an LoI from Export Development Canada for a potential C$100 million in project financing for Seymour.

EDC, owned by the Canadian government, specialises in providing financing solutions for Canadian exporters and has closed over 540 transactions.

The financing is subject to EDC’s due diligence, with discussions to progress through the year.

At the same time, GT1 said it had received strong interest from other global commercial lenders.

Despite the recent positive news flow, GT1 shares have fallen by more than 25% since the start of the year, though the performance is largely in line with its lithium peers.

Analysts remain positive on the stock. Both Canaccord and Bell Potter Securities have speculative buy ratings for GT1. Bell’s price target is 14c per share, while Canaccord’s is 20c per share, the latter representing quadruple Friday’s closing price of 5c.

 

At Stockhead, we tell it like it is. While Green Technology Metals is a Stockhead advertiser, it did not sponsor this article.

Read MoreLithium

Featured Companies

You might be interested in