MONTRÉAL, QC / ACCESSWIRE / June 13, 2022 / Critical Elements Lithium Corporation (TSXV:CRE)(OTCQX:CRECF)(FSE:F12) ("Critical Elements" or the "Corporation") is pleased to announce results of a new Feasibility Study on the Rose Lithium-Tantalum project ("Rose" or the "Project") in Eeyou-Istchee - James Bay, Québec. Unless otherwise stated, all figures are quoted in American dollars ("US$") and are reported on a 100% equity project basis.
Highlights
- Average production, Year 2 to Year 16 of 173,317 tonnes of chemical grade 5.5% spodumene concentrate
- Average production, Year 2 to Year 16 of 51,369 tonnes of technical grade 6.0% spodumene concentrate
- Average production, Year 2 to Year 16 of 441 tonnes of tantalum concentrate
- Expected life of mine of 17 years
- Average operating costs of US$74.48 per tonne milled, US$540 per tonne of concentrate (all concentrate production combined)
- Estimated initial capital cost $US$357 million before working capital
- 100% equity basis for project
- Average gross margin of 68.3%
- After-tax NPV of US$1,915 million (at 8% discount rate), after-tax IRR of 82.4% and average price assumptions of US$4,039 per tonne technical grade lithium concentrate, US$1,852 per tonne chemical grade lithium concentrate, US$130 per kg tantalum pentoxide (Ta2O5)
- Anticipated construction time to start of production of 21 months
The Rose Lithium-Tantalum Project is 100% owned by Critical Elements. The Corporation's market strategy is to enter the lithium market with a low-risk approach. The completion of the feasibility on the spodumene plant is the first step to enter the market and establish the Corporation as a reliable high quality lithium supplier. The low-risk approach is characterized by simple open-pit mining and conventional lithium processing technologies.
Critical Elements has consistently sought to advance the wholly owned Rose Lithium-Tantalum Project in a low-risk manner. To this end, the Corporation has completed a new Feasibility Study with a conservative spodumene concentrate price deck, as well as capital and operating cost estimates reflective of current market conditions. The new Feasibility Study incorporates a standard truck and shovel open-pit mining operation and conventional lithium processing technologies. The Project will produce technical grade spodumene concentrate for the glass and ceramics industry and chemical grade spodumene concentrate for conversion for use in batteries for e-mobility, as well as a tantalite concentrate.
The mine will excavate a total of 26.3M tonnes ore grading an average of 0.87% Li2O and 138 ppm Ta2O5 after dilution. The mill will process 1.61M tonnes of ore per year to produce an annual average of 224,686 tonnes of technical and chemical grade spodumene concentrates and 441 tonnes of tantalite concentrate. The ore is contained in several parallel and continuous shallow dipping pegmatite dykes outcropping on surface. The ore zones are open at depth and a future underground operation is possible.
Over the life of mine, the open pit will excavate a total of 182.4M tonnes of waste rock and 10.9 M tonnes of overburden. The average strip ratio is 7.3 tonnes of waste per tonne of ore.
Table 1 Rose Key FS Results
Item | Units | Value | |||
Production | |||||
Project life (from start of construction to closure) | years | 19 | |||
Mine life | years | 17 | |||
Total mill feed tonnage | M t | 26.3 | |||
Average mill feed grade | |||||
Li2O | % Li2O | 0.87 | |||
Ta2O5 | ppm Ta2O5 | 138 | |||
Lithium Concentrate Production | |||||
% of Production, Chemical Grade | % | 75 | |||
% of Production, Technical Grade | % | 25 | |||
Mill recoveries | |||||
Li2O, Chemical Grade | % | 90 | |||
Li2O, Technical Grade | % | 87 | |||
Ta2O5 | % | 40 | |||
Payable | |||||
5.5% Li2O Concentrate, Chemical Grade | t | 2,798,000 | |||
6% Li2O Concentrate, Technical Grade | t | 829,000 | |||
Ta2O5 contained in concentrate | kg | 1,453,000 | |||
Average Commodity Prices | |||||
5.5% Li2O Concentrate, Chemical Grade | US$/t conc. | 1,852 | |||
6% Li2O Concentrate, Technical Grade | US$/t conc. | 4,039 | |||
Ta2O5 contained in concentrate | US$/kg contained | 130 | |||
Exchange rate | 1 US$ : 1.30 CAN$ | ||||||
0.77 US$ : 1 CAN$ | |||||||
| Item | Units | Value | |||||
| Project Costs | CA$ | US$ | |||||
| Average Mining Cost | $/t milled | 37.89 | 29.17 | ||||
| Average Milling Cost | $/t milled | 19.88 | 15.31 | ||||
| Average General & Administrative Cost | $/t milled | 20.30 | 15.63 | ||||
| Average Concentrate Transport Costs | $/t milled | 18.66 | 14.37 | ||||
| Project Economics | CA$ | US$ | |||||
| Gross Revenue | $M | 10,855 | 8,358 | ||||
| Total Selling Cost Estimate | $M | 236 | 182 | ||||
| Total Operating Cost Estimate | $M | 2,543 | 1,958 | ||||
| Total Sustaining Capital Cost Estimate | $M | 160 | 123 | ||||
| Total Capital Cost Estimate | $M | 464 | 357 | ||||
| Duties and Taxes | $M | 3,098 | 2,386 | ||||
| Average Annual EBITDA | $M | 493 | 379 | ||||
| Pre-Tax Cash Flow | $M | 7,452 | 5,738 | ||||
| After-Tax Cash Flow | $M | 4,354 | 3,352 | ||||
| Effective Tax Rate | 42% | ||||||
| Discount Rate* | 8% | ||||||
| Pre-Tax Net Present Value @ 8% | $M | 4,368 | 3,363 | ||||
| Pre-Tax Internal Rate of Return | 125.0% | ||||||
| Pre-Tax Payback Period | years | 1.0 | |||||
| After-Tax Net Present Value @ 8% | $M | 2,487 | 1,915 | ||||
| After-Tax Internal Rate of Return | 82.4% | ||||||
| After-Tax payback period | years | 1.4 | |||||
*Discounting starts with commercial production.
Property
The Rose property is located in northern Québec's administrative region, on the territory of Eeyou Istchee James Bay. It is located on Category III land, on the Traditional Lands of the Eastmain Community, approximately 40 kilometers north of the Cree village of Nemaska. The latter is located approximately 300km north-west of Chibougamau.
The Rose property is accessible by road via the Route du Nord, usable all year round from Chibougamau. The mine site can also be reached by Matagami, via Route 109 and Route du Nord. Figure 1 shows the regional location of the project. The project is located 80 km south of Goldcorp's Éléonore gold mine and 45 km north-west of Nemaska's Whabouchi lithium project and 20 km south of Hydro Québec's Eastmain 1 hydroelectricity generating plant. The Nemiscau airport services the region's air travel needs. The Rose property site is located 50 km by road from the Nemiscau airport.
The Rose property comprises 473 claims spread over a 24,654-ha area. Geologically, the Rose property is located at the north-east end of the Archean Lake Superior Province of the Canadian Shield.
Over the life of mine, the open pit will excavate a total of 182.4M tonnes of waste rock and 10.9 M tonnes of overburden. The average strip ratio is 7.3 tonnes of waste per tonne of ore.
Figure 1 Rose Property Location
Reserve Estimate
A Mineral Reserve Estimate for 17 mineralized zones was prepared during this study. The estimation assumed the production of a chemical grade spodumene concentrate with a price of 20 US$ per kg Li2O and a tantalite concentrate with a price of 130 US$ per Kg of Ta2O5. The recoveries were fixed at 85% and 64% for Li and Ta respectively. The grade-recovery curve used for resource estimate, which became available after the mineral reserves were evaluated, was verified and found to have little influence on the reserve estimate. The production of a higher value technical grade spodumene concentrate was not assumed in the reserve estimate.
Based on compilation status, metal price parameters, and metallurgical recovery inputs, the effective date of the estimate is May 27, 2022.
The estimate was prepared in accordance with CIM's standards and guidelines for reporting mineral resources and reserves.
Table 2 displays the results of the Mineral Reserve Estimate for the Rose Project at the $36.92 NSR per tonne cut-off for the open-pit scenario.
Table 2 Mineral Reserve Estimate
Tonnage | NSR | Li2O_eq | Li2O | Li2O | Ta2O5 | Ta2O5 | |
Category | (Mt) | ($) | (%) | (%) | (000 t) | (ppm) | (000 t) |
| Probable | 26.3 | 204 | 0.92 | 0.87 | 193.8 | 138 | 2.3 |
| Total | 26.3 | 204 | 0.92 | 0.87 | 193.8 | 138 | 2.3 |
- The Independent and Qualified Person for the Mineral Reserve Estimate, as defined by NI 43‑101, is Simon Boudreau, P.Eng, of InnovExplo Inc. The effective date of the estimate is May 27, 2022.
- The model includes 17 mineralized zones.
- Calculations used metric units (metres, tonnes and ppm).
- The number of metric tons was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding effects. Rounding followed the recommendations in NI 43‑101.
- InnovExplo is not aware of any known environmental, permitting, legal, title-related, taxation, socio-political, marketing or other relevant issue that could materially affect the Mineral Reserve Estimate.
Resource Estimate ("MRE")
The current MRE is primarily based on changes made to the net smelter return ("NSR") parameters, supported by new assumptions concerning metal prices and the creation of potentially mineable shape to constrain the MRE for the potential underground extraction scenario. No changes to the interpretation and interpolation parameters were deemed necessary. The mineral resource model for the current MRE is based largely upon the model generated for the 2011 PEA.
The effective date of the estimate is May 27th, 2022, based on compilation status, metal price parameters, metallurgical recovery inputs and creation of the constraining volume.
Given the density of the processed data, the search ellipse criteria, the drill hole density and the specific interpolation parameters, the QP is of the opinion that the current MRE can be classified as Indicated and Infe
