Lithium Ionic announces FS results for Bandeira lithium project in Brazil

Lithium Ionic study gives Bandeira project US$1.3B NPV

Canadian mining company Lithium Ionic has announced the results of a Feasibility Study (FS) for its fully owned Bandeira lithium project in Minas Gerais, Brazil.

The FS for the Bandeira project was completed by Atkins Réalis (previously known as SNC Lavalin), involving cumulative work for over 12 months. It builds on the results from a Preliminary Economic Assessment (PEA) completed in October last year.

The FS includes detailed planning for the mine, process design, plant layout, infrastructure, and product logistics. It supports a large-scale project with strong economic viability, featuring an underground mine with a minimal footprint.

Also, the study supports a straightforward processing circuit and a safe, sustainable dry stack tailings facility at the project.

Lithium Ionic CEO Blake Hylands said: “This study marks an important developmental milestone, confirming the strong results from our PEA in late 2023 and solidifying our path to becoming a near-term lithium producer.

“Furthermore, it outlines the significant positive impacts Bandeira will have through employment, tax contributions, and local procurement.

“While we are very pleased with the results of the study, the Company intends to move project engineering forward to the basic engineering phase where a value-add process will take place to further optimize and streamline capital and operating costs.”

The Bandeira project comprises claims spanning 157ha, which represents only about 1% of Lithium Ionic’s 14,182ha land package in Brazil’s Lithium Valley.

According to FS results, Bandeira will be developed as an underground mining operation, with a life of mine (LOM) of 14 years, producing 178,000t of quality spodumene concentrate (SC5.5).

The study suggests strong project economics, with an after-tax net present value (NPV8%) of $1.3bn and after-tax internal rate of return (IRR) of 40% at an average SC5.5 price of $2,277/t.

It projects operating costs of $444/t of SC5.5 and total capital expenditure (CAPEX) of $266m with after-tax payback of 3.4 years, and LOM sustaining costs of $ 81m.

The project is expected to contribute $915m in taxes, provide around 870 direct jobs to locals, and an estimated $677m in procuring goods and services within Brazil.

Lithium Ionic submitted the LAC license application in November last year, which is currently under review by the state agency, and its approval is anticipated in early Q3 2024.

Hylands added: “Several opportunities identified in the feasibility stage will be subjected to trade-off studies, prior to entering the detailed engineering phase to ensure the project value and operational efficiencies are maximized.

“We look forward to continuing to rapidly advance Bandeira towards production, recognizing that this will deliver the most value to our shareholders.

“However, we are very excited by the growth opportunities and development potential at our other regional properties which could present significant future scale opportunities for the Company.”