The numbers add up for Rincon lithium brine development, Power Minerals says

Rincon salar development to cost just US$216.5m
Initial mine life of 14 years with a payback period of just three
Planning of a pre-feasibility study (PFS) underway
Expected revenue of US$194m per annum

Special Report: A Preliminary Economic Assessment (PEA) of Power Minerals’ Rincon salar at its Salta lithium project shows the potential to produce high-purity, battery-grade lithium carbonate with an impressive internal rate of revenue (IRR) of 42%.

The news comes after the developer recently contracted Hatch to conduct a PFS of the construction of a 1,000tpa direct lithium extraction (DLE) plant at the Incauhasi salar – one of five at the Salta project.

PEA shows robust economics

In Argentina’s slice of the highly mineralised brines of the lithium triangle in South America, Power Minerals (ASX:PNN) says its Rincon salar can deliver a robust, low-cost 7,000tpa lithium carbonate equivalent (LCE) operation with US$194.8m annual revenue over an initial 14-year operation.

Development of Rincon dials in with a pre-tax NPV of US$501.82m with “strong forecast margins” PNN says, has a payback period of three years, and an impressive pre-tax IRR of 42%.

These calculations are based on its existing resource of 292,564t LCE – which PNN has already flagged has having strong potential for expansion.

The PEA was conducted by global engineering and mining consultant Golder, a division of WSP Global – which has worked with Power’s DLE tech partner Sunresin and Tier 1 brine miners including China’s Ganfeng and Tibet Summit Resources.

Estimated capital expenditure sits at US$216.55m, based on its lithium carbonate plant utilising DLE technology.

Other key metrics include:

Total LCE production measured at an 87.5% DLE processing efficiency
Proposed well field to consist of seven production wells
Ramp up to full production is estimated to be two years, with LCE production scheduled to commence in the third year of operation

Power Minerals MD Mena Habib says the company is extremely encouraged by the outcomes of the PEA for its flagship Rincon salar at Salta.

“The PEA provides initial formal confirmation of the technical and financial viability of the potential to develop Rincon into a new, long-life source of high-purity lithium carbonate,” Habib says.

“The outcome of the PEA is outstanding validation of our demonstrated commitment to the rapid development of the Salta project.

“Having commenced a major resource expansion drilling campaign at Salta late last year, Power has delivered a substantial JORC resource upgrade, and is now engaged in development-phase programs at its priority Rincon and Incahuasi salars.”

This article was developed in collaboration with Power Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.