Prefeasibility Study Clayton Valley Lithium Project Esmeralda County, Nevada - 2020

Mining & Minerals - Evaluations / Lithium, Potash, Halite, & P2O5 Mining Projects

Fayram, and 2 co-authors, reported in 2020 that the information within this report supports the presence of economic lithium mineralization and
further work on the project. The mineralization occurs within a large lithium-bearing clay deposit. The estimated Mineral Reserves for the project are large and capable of supporting a mine life of more than 40 years.

The project as outlined is based on a production rate of 15,000 tpd. This is identical to the PEA and is selected based on constraints in transportation and market considerations. The capital costs for the project are estimated at $493 million, of which the acid plant is a major component. A lower production rate could be considered as a means of capital cost reduction by deferring purchase of the acid plant and buying sulfuric acid instead; this alternative was not studied.

At the design rate of 15,000 tpd, the project has an estimated production rate of 27,400 tpy LCE. The operation is expected to produce lithium in the form of battery-grade lithium hydroxide. The estimated average operating cost of $16.90/t of material equates to $3,387/tonne LCE. The analysis in this report uses a base price of $9,500/tonne LCE on lithium sales.

The results are an after-tax NPV@8% of $1.030 billion and an after-tax IRR of 25.8%. The results are positive. The project is exposed to risks typical of a mining project at a prefeasibility level of study.

• Recovery of lithium from the project was not proven at a commercial scale. Further testing in a pilot plant is needed to confirm all parts of the process flowsheet.
• Production is potentially limited by the availability and cost of sulfur and its transportation.
• The project is most sensitive to lithium market prices which are currently dependent on the demand for lithium batteries in electric vehicles and energy storage.
• A source of makeup water has not been secured. Options to obtain water through rights acquisition, purchase or other agreements should be pursued.
• Environmental permitting is subject to presence of flora, fauna or other conditions which are yet to be determined.