The pre-feasibility study returned a post-tax net present value (NPV8) of A$507mln and an internal rate of return (IRR) of 25%, which compares to a post-tax NPV8 of A$421mln and IRR of 38% from the scoping study of January 2019.
Average annual production of spodumene concentrate decreased by 18%, from 360,000t the scoping study to 295,000t in the pre-feasibility study, which means the operation would remain in the mid-range of its concentrate producing peer group for annual production levels.
The mine life has increased by 189%, from 9 years in the scoping study to 26 years in the pre-feasibility study, which gives the operation the third largest mine life of its concentrate producing peer group (Figure 1).
Figure 1: Life of Mine for Igneous Lithium Operations
Source: Mining and Metals Research Corporation.
Over the life of the operation, Kathleen Valley will produce 7.7mt of spodumene concentrate, making it the fifth-largest concentrate producing operation, based on tonnes produced (Figure 2).
Figure 2: Life of Mine Production from Igenous Lithium Operations
Source: Metals and Mining Research Corporation
Opex net of tantalum credits increases by 6%, from US$362/t of spodumene concentrate to US$384/t, using the current AUD to USD exchange rate. This is the upper range of its concentrate producing peer group.
Capex has increased by 4%, from US$158m in the coping study to US$164m in the pre-feasibility study, which gives the project a life of mine capex intensity of US$21/t of spodumene concentrate and places it in the lower range of its concentrate producing peer group.
Liontown already has a mining lease in place and is targeting maiden production for 2024. The company now plans to move on to complete its definitive-feasibility study for the project.