Brunswick Exploration Inc. press release
LithiumBank Announces Updated PEA; Significantly Increases Pre-Tax NPV8% to USD $3.7 Billion and Reduces OPEX to USD $4,588 per LCE/T at Flagship Boardwalk Lithium Brine Project, Alberta, Canada
TSXV - TSX Venture Exchange · Lithium · Cesium · Tantalum · Canada
Calgary, Alberta--(Newsfile Corp. - January 16, 2024) - LithiumBank Resources Corp.(TSXV: LBNK) (OTCQX: LBNKF) ("LithiumBank" or the "Company") is pleased to announce the highlights from an updated Preliminary Economic Assessment ("Updated PEA") by Hatch Inc. ("Hatch") for its 100%-owned Boardwalk Lithium Brine Project ("Boardwalk") located in west-central Alberta. The significant difference from the initial PEA ("Original PEA") released in May 2023 was the incorporation of newly licensed continuous Direct Lithium Extraction ("cDLE®") technology from G2L Greenview Resources Inc ("G2L") The G2L technology has numerous advantages over the direct lithium extraction ("DLE") process applied in the original PEA. This update builds upon a lithium carbonate equivalent ("LCE") updated resource estimates at the Boardwalk Project of 395,000 tonnes LCE of indicated and 5.73 million tonnes LCE of inferred resources. The mineral resource update was completed by APEX Geoscience Ltd. ("APEX"). The updated NI 43-101 PEA Technical Report will be filed on SEDAR within 45 days of this announcement.
Boardwalk Updated PEA Improvements Highlights include[1]
Increased lithium recovery of 98% using the G2L's cDLE® technology Increased production to 34,005 tonnes per year of battery grade lithium hydroxide monohydrate ("LHM")[2]over a 20-year period A significant reduction of 34% in operational expenditures to USD $4,588 per tonne LHM USD $3.7 Billion Net Present Value8 ("NPV8") and 25.0% IRR on a pre-tax basis USD $2.3 Billion NPV8and 20.6% IRR on an after-tax basis Reduction in the payback period from 4.1 years to 3.5 years, on a pre-tax basis Production of high-grade lithium sulphate (Li2SO4) eluate at a concentration of 3,238 mg/L Li (3.24 g/L Li) Lower cost and commercially available reagents used in the cDLE® process Majority of acid is recovered in the downstream processing and reused in the elution stage Reduction in freshwater usage using the G2L cDLE® Achievement of commercial production within 3 years is possible under Provincial permitting directives Located in the resource friendly jurisdiction of west-central Alberta, which has a long history of resource extraction, well established infrastructure, and an actively supportive government Power expected to be generated on site using high-efficiency gas turbines with steam cogeneration that is expected to lower the project's overall carbon footprint. The proposed gas turbine units may be run on 80% hydrogen when a reliable supply is available Project economics again used USD $26,000/t LHM and provides strong leverage to higher lithium prices No changes were made to the front end of the engineering which includes everything up to the DLE
_"We are very pleased to provide an updated PEA which highlights the effectiveness of our newly licensed _cDLE®_technology from G2L," commented LithiumBank CEO Rob Shewchuk. "Reducing the operating cost by 34% to US $4,588 /t LHM both shortens the payback period to 3.5 years and increases NPV to US$ 3.7B, making our Boardwalk project highly competitive on the world stage. We believe having district scale, 100% owned, unconventional lithium development projects in North America makes LithiumBank a unique investment opportunity. This, along with the combination of substantial LCE resources and the ability to utilize the wealth of experience, data and infrastructure provided by major energy companies in Central Alberta, positions us well for continued success." _
LithiumBank elected to update the Original PEA because of the strong results received from the G2L test work using their cDLE® Ion Exchange ("IX") technology. The G2L cDLE® technology is unique in that it is designed to work at high flow rates while maintaining a very high recovery of lithium (98%) and achieving a high purity (70%) lithium eluate. Furthermore, this updated PEA demonstrates that lower cost and readily available reagents such as quick lime (CaO) and sulphuric acid (H2SO4) can produce a high purity lithium sulphate eluate for further downstream processing. Lithium sulphate is a common product in spodumene mining where Hatch has extensive experience in designing and implementing the appropriate processing equipment.
_"Based on the results of this PEA it is clear that implementing efficient DLE technology has a significant positive economic impact on a project. In early 2021 LithiumBank made a strategic decision to conduct an extensive DLE assessment program study run by Hatch to determine the optimal technology and commence pilot studies," commented LithiumBank COO Kevin Piepgrass. "That in-depth process took time, and we are now pleased to share how the Company's licenced _cDLE®_has greatly improved the results of the updated PEA. We look forward to commencing our pilot studies with G2L on both our Boardwalk and Park Place lithium brine projects in the coming months."_
Updated Economic Analysis
The base case assumes a long term LHM price of US$26,000/t. At this price, the project has an improved NPV of $3.7 billion on a pre-tax basis at an 8% real discount rate. A summary of key indicators is shown inTable 1.
Table 1 - Boardwalk Economic Summary
| Description | Unit | Original PEA | Updated PEA | Percent change | | LHM Sales | t/year | 31,350 | 34,005 | 8% | | LHM Price | US$/t | 26,000 | 26,000 | 0% | | Site Operating Unit Cost | US$/t sold | 6,941 | 4,588 | -34% | | Site Operating Cost | US$M/year | 214 | 155.2 | -27% | | Project Life | years | 20 | 20 | 0% | | Initial Capital Cost | US$M | 2,092 | 2,160 | 3% | | Sustaining Capital Cost | US$M | 129 | 131 | 2% | | USD/CAD Exchange Rate | US$/C$ | 0.74 | 0.73 | -1% | | Pre-tax NPV @ 8% | US$M | 2,722 | 3,679 | 35% | | After-tax NPV @ 8% | US$M | 1,657 | 2,305 | 39% | | Pre-tax IRR | % | 21.6 | 25.0 | 16% | | After-tax IRR | % | 17.8 | 20.6 | 16% | | Pre-tax Payback | operating years | 4.1 | 3.5 | -15% | | After-tax Payback | operating years | 4.5 | 3.9 | -13% |
The preliminary economic assessment is inherently preliminary in nature. It includes inferred mineral resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the results indicated in this preliminary economic assessment will be realized.
Capital and Operating Cost Estimates
The Capital Expenditure ("CAPEX") Estimate was prepared in accordance with the Association for the Advancement of Cost Engineering (AACE) Class 5 Study standards, and has an approximate accuracy of +50%, -30%.
The total estimated CAPEX for the project is presented in table 2 below, inclusive of contingency.
Table 2 - Capital Cost Estimate Summary
| Capital Item | Estimated Cost (M USD) | | Plant Wide - General | $26.70 | | Onsite Infrastructure | $265.20 | | Offsite Infrastructure | $19.50 | | Brine Wellfield Services | $273.00 | | Surface Brine Infrastructure | $207.60 | | Lithium Processing Plant | $610.70 | | Direct Cost - Subtotal | $1,402.70 | | Indirect Cost | $327.30 | | Contingency | $373.50 | | Owner's Cost | $56.10 | | Total Project Capital Cost | $2,159.70 |
The Operating Expenditure ("OPEX") Estimate for the project was also prepared in accordance with the AACE Class 5 Study standard. The total OPEX is presented below in Table 3.
Table 3 - Operating Cost Summary
| Cost Component | Lithium Plant Annual Operating Cost (M USD) | Original PEA Operating Cost (USD/t LHM) | Updated PEA Operating Cost (USD/t LHM) | Percent Change Operating Cost | | | | | | | | Reagents | 37.3 | 3,689 | 1,089 | -70% | | Utilities | 51.9 | 1,480 | 1,515 | 2% | | Consumables | 16.5 | 154 | 482 | 213% | | Labour | 17.6 | 513 | 513 | 0% | | Maintenance Materials and Services | 18.7 | 646 | 546 | -15% | | Transport and Logistics | 6.6 | 114 | 192 | 68% | | General and Administrative (G&A) | 6.7 | 210 | 196 | -7% | | Total Operating Cost | 155.2 | 6,941 | 4,588 | -34% |
Sensitivity Analysis
Returns are highly sensitive to input assumptions and should be viewed in the context of the sensitivity analysis provided in Figures 1 through 4. The product price (US $26,000/t LHM), exchange rate (0.73), capital cost, and operating cost were each varied independently on an annual basis and the resulting variations in, before and after tax, NPV @ 8% and IRR are shown in as well as the stated accuracies for items such as capital costs.
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Figure 1: NPV @ 8% Discount Rate Pre-Tax
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Figure 2 - NPV @ 8% Discount Rate After-Tax Sensitivity
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Figure 3: IRR Pre-Tax Sensitivity
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Figure 4 - IRR After-Tax Sensitivity
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"We are excited to announce this updated Boardwalk PEA that enhances an already impressive DLE project in the tier 1 jurisdiction of Alberta, Canada. Over the last 8 months, we have rigorously tested the G2L cDLE technology and begun to quantify its very positive impact on the project economics," commented Paul Matysek, Executive Chairman LithiumBank. "These improved economics, combined with its scale, potential speed to production, availability of existing infrastructure, and large inferred LCE resource, makes Boardwalk a very attractive project right here in North America. Furthermore, there is potential for substantial upside from the Canadian Investment Tax Credit, along with other numerous optimization opportunities."
Updated Lithium Recovery Methods - DLE Technology
LithiumBank commissioned a bench-scale testing campaign to establish the selective lithium extraction performance of G2L's cDLE® technology. The test work also assessed optimal process conditions that produce lithium concentrates that can be upgraded to battery grade products. The first stage of the work was completed at G2L's lab facility in Melbourne, Australia. It included the bench scale of tests of the thermodynamic and kinetic properties of the IX media during loading and elution. The testing successfully demonstrated that the IX media can selectively extract 98% lithium from LithiumBank's feed brine and produce a lithium sulphate concentrate suitable for downstream production of lithium chemicals.
The lithium processing facility is designed to a nameplate production capacity of approximately 34,005 tonnes per annum of battery grade lithium hydroxide monohydrate (29,951 tonnes per annum LCE) at a feed brine throughput of 250,000 m3/d at an average concentration of 70.1 mg/L. This assumes a 98.7% operating factor and a 98%[3]overall lithium recovery. Once the dissolved H2S, residual suspended solids and hydrocarbons are removed from the brine, lithium is preferentially extracted through the cDLE® IX technology. After removal of the precipitated impurities from the eluate, the lithium concentrate is polished prior to the lithium sulfate electrochemical process to produce lithium hydroxide. Battery grade lithium hydroxide monohydrates are produced through two stages of crystallization, followed by drying and packaging. The processing stages that follow the DLE extraction are similar to what is used in the processing of other lithium-rich bines around the world and are well understood and commonly used.
Additional PEA Enhancement Opportunities
Leveraging of existing wells and surface infrastructure including roads, well pads, pipelines, and utilities Reduction of well and power requirements through enhanced 3-D reservoir modelling and new drilling information Utilise ZS2 Technologies Inc. to capture and sequester CO2emissions to produce carbon credits, lowering brine reinjection volume amounts by at least 10% Additional trade-off studies aimed at streamlining pipeline infrastructure The Government of Canada announced an Investment Tax Credit ("ITC") for Clean Technology Manufacturing in its Budget 2023. A potential Refundable tax credit may be applied on capital expenditures for the extraction and processing of critical minerals
Updated Mineral Resource Estimates
The Mineral Resource Estimates were updated to reflect a minor change in the Boardwalk Property boundary associated with the conversion of Mineral Permits to Brine-Hosed Mineral Licences as per new Alberta Mineral Tenure Regulation. The updated mineral resource estimations predict indicated LCE resources of 395,000 tonnes LCE at 71.6 mg/L lithium and a slight decrease of inferred LCE resources to 5.734 million tonnes LCE at 68.0% mg/L Li (decrease of 1.3% from the previous resource estimate effectively dated June 16, 2023). Reconciliation of the updated mineral resources is entirely related to the change, and slight reduction, in the Boardwalk Property land position.
The Boardwalk Leduc Formation Li-brine resource estimates are classified as indicated and inferred mineral resources in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum definition standards and best practice guidelines (2014, 2019) and the Canadian Securities Administration's Standards for Disclosure of Mineral Projects, National Instrument 43-101.
The indicated and inferred Boardwalk Leduc Formation lithium-brine resource estimations are presented as a total (or global value), and were estimated using the following relation in consideration of the Leduc Formation aquifer brine:
Lithium Resource = Total Brine Aquifer Volume X Average Porosity X Percentage of Brine in the Pore Space X Average Concentration of Lithium in the Brine.
The indicated mineral resource area is defined by the outline of the Sturgeon Lake South Oilfield. The resource classification within the Sturgeon Lake South Oilfield is elevated to an indicated mineral resource due to 1) the correlation of historical Li-brine data in conjunction with 2021-2022 brine analytical work conducted by LithiumBank; 2) reinterpretation of 2-D seismic data and understanding of the dimensions of the Leduc Formation reef buildups; and 3) mineral processing test work - all of which have advanced the confidence level of the Li-brine concentration, geological model and potential for recovery of lithium from the brine. The inferred mineral resource area is defined by the remaining area of the Sturgeon Lake Reef Complex that is situated outside of the indicated mineral resource area.
Three-dimensional wireframes of the Leduc Formation aquifer were created using the grid surfaces of the top and base of the Leduc Formation within the 3-D geological model. The 2-D strings were connected to create a solid 3-D wireframe of the Leduc Formation aquifer within the resource areas. Only those parts of the Sturgeon Lake Reef Complex that occur within the permitted LithiumBank Boardwalk Property were used in the resource estimate process. The 3-D closed solid polygon wireframe of the Leduc Formation aquifer domain was used to calculate the volumes of rock, or the aquifer volumes. The aquifer volumes underlying the Boardwalk Property, summarized as the total Leduc Formation domain aquifer volumes, are 19.9 km3and 305.0 km3in the indicated and inferred resource areas, respectively.
The brine volumes are calculated for the Leduc Formation aquifer domain, or resource areas, by multiplying the aquifer volume (in km3) times the average porosity times the percentage of brine assumed within the pore space. Using an average effective porosity value of 5.3% and an average modal abundance of brine in the Leduc Formation pore space percentage of 98%, the indicated and inferred resource brine volumes are 1.036 km3and 15.842 km3, respectively.
Average Leduc Formation aquifer brine lithium concentrations of 71.6 milligrams per liter (mg/L) Li and 68.0 mg/L Li were selected for the calculation of the indicated and inferred resource estimations. These values were determined from a lithium assay database of 25 ICP-OES analyses conducted by LithiumBank's primary lab (indicated resource area) and 89 LithiumBank and historical ICP-OES analyses (inferred resource area). The quality of the average lithium concentrations was assessed and is considered to represent elevated levels of analytical precision.
The Li-brine resources were estimated using a cut-off grade of 50 mg/L lithium. With respect to units of measurement, 1 mg/L = 1 g/m3. If concentration is in mg/L and volume in m3, then the calculated resource has units of grams. (1 g/m3x 1 m3= 1 gram or 0.001 kg).
The Updated Boardwalk Leduc Formation Li-brine indicated resource estimate is globally estimated at 74,000 tonnes of elemental Li (Table 4). The global (total) lithium carbonate equivalent for the indicated resource is 395,000 tonnes.
The Updated Boardwalk Leduc Formation Li-brine inferred resource estimate is globally estimated at 1.077 million tonnes of elemental Li (Table 5). The global (total) lithium carbonate equivalent for the inferred resource is 5.734 million tonnes.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no guarantee that all or any part of the mineral resource will be converted into a mineral reserve. The estimate of mineral resources may be materially affected by geology, environment, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
Table 4 - Boardwalk Indicated Li-brine resource estimation presented as a global (total) resource contained within the Leduc Formation of the Sturgeon Lake South Oilfield.
| Indicated Resource Estimate | Reporting parameter | | Leduc Formation Reef Domain | | Aquifer volume (km3) | | 19.942 | | | Brine volume (km3) | | 1.036 | | | Average lithium concentration (mg/L) | | 71.6 | | | Average porosity (%) | | 5.3 | | | Average brine in pore space (%) | | 98.0 | | | Total elemental Li resource (tonnes) | | 74,000 | | | Total LCE (tonnes) | | 395,000 | |
Note 1: Mineral resources are not mineral reserves and do not have demonstrated economic viability. Note 2: The weights are reported in metric tonnes (1,000 kg or 2,204.6 lbs). Note 3: Tonnage numbers are rounded to the nearest 1,000 unit. Note 4: In a 'confined' aquifer (as reported herein), porosity is a proxy for specific yield. Note 5: The resource estimation was completed and reported using a cutoff of 50 mg/L Li. Note 6: To describe the resource in terms of industry standard, a conversion factor of 5.323 is used to convert elemental Li to Li2CO3, or Lithium Carbonate Equivalent (LCE).
Table 5 - Boardwalk Inferred Li-brine resource estimation presented as a global (total) resource that is contained within the Leduc Formation that encompasses the Sturgeon Lake Reef Complex outside of the Sturgeon Lake South Oilfield (or area of the Indicated mineral resource).
| Inferred Resource Estimate | Reporting parameter | | Leduc Formation Reef Domain | | Aquifer volume (km3) | | 304.999 | | | Brine volume (km3) | | 15.842 | | | Average lithium concentration (mg/L) | | 68.0 | | | Average porosity (%) | | 5.3 | | | Average brine in pore space (%) | | 98.0 | | | Total elemental Li resource (tonnes) | | 1,077,000 | | | Total LCE (tonnes) | | 5,734,000 | |
Note 1: Mineral resources are not mineral reserves and do not have demonstrated economic viability. Note 2: The weights are reported in metric tonnes (1,000 kg or 2,204.6 lbs). Note 3: Tonnage numbers are rounded to the nearest 1,000 unit. Note 4: In a 'confined' aquifer (as reported herein), porosity is a proxy for specific yield. Note 5: The resource estimation was completed and reported using a cutoff of 50 mg/L Li. Note 6: To describe the resource in terms of industry standard, a conversion factor of 5.323 is used to convert elemental Li to Li2CO3, or Lithium Carbonate Equivalent (LCE).