RE:Resource estimate technical reportY93H1979 wrote: anyone else have a read of the report on SEDAR?
I read it yesterday but didn't have the time to post about it. Considering The Mineral Corporation (TMC) has revised and validated everything form sampling methods to laboratory procedures I'd say this document is the most reliable source of information regarding costs we have at the moment:
https://www.sedar.com/GetFile.do?lang=EN&docClass=24&issuerNo=00023396&issuerType=03&projectNo=02797864&docId=4385773
Y93H1979 wrote: I like this part...
"A high-level estimate of the cost of processing has been made, to inform the assessment of Reasonable Prospects for Economic Extraction. This estimated cost is US$35/t treated, which includes the cost of crushing and milling, acid leach at or around 90°C, and the precipitation of lithium carbonate."
When you do the math, that comes out as around $2300 per tonne LiCO3 (!!!) And this is not technical grade, this is close to battery grade product.
This is indeed HUGE news, which contrast (I'd say correct) Haywood's analysis. This figure of around $2300 per tone of LCE is in line with that mentioned in a journalistic note I read in july:
https://www.energiminas.com/macusani-yellowcake-falchani-es-un-lago-de-litio-que-no-sabemos-donde-empieza-y-donde-termina/
As they say (original in Spanish),
"The ton of lithium carbonate, essential for energy storage devices used by both cell phones and electric car batteries, is priced at US $ 12,000, cents more, cents less, and the cost of production only at Falchani would be positioned at US$ 2,000 or US$ 2,500 per ton" Y93H1979 wrote: Looks like the PEA will be a fairly simple process. (...) A lot of the infrastructure, environmental and mining data can probably be cut and pasted from the Uranium PEA, which leaves the processing optimisation. The current acid consumption is based on 150 kg/ tonne, which has the potential to be substantially reduced if the pregnant leach solution is reused and "topped up" with a smaller amount of acid to adjust pH. Once they have optimised this step and determined (potentially) how many times this solution can be reused for leaching separate batches of ore, costs could be redued even further.
Glad to know that this options exists to reduce the already low cost of the project. I hope this kind of optimization is included in the PEA to be released in 2019 H1.
Regarding the economics of the project here I'm pasting what IMO is the most relevant part of the document. In particular, I found very encouraging the recovery TMC expectsfor the whole process (85%-90%), from crushing and milling to precipitation of lithium carbonate.
14.6 Reasonable Prospect for Economic Extraction
The QP (Qualified Person) considers that there are reasonable prospects for the economic extraction of the lithium Mineral Resources provided in this estimate. This view is based on an assessment of reasonable geological, mining, processing, marketing, environmental, legal, social and economic parameters, which are discussed below. The assessment of some of these factors has been assisted by the PEA of the uranium Mineral Resources within Plateau Energy Metals mining concessions.
14.6.1 Mining considerations
No mining studies have been undertaken at the Falchani Project, however, given the fact that the Mineral Resources outcrop at surface, are relatively thick, and have a shallow dip, it is likely that mining would be initiated in an open pit.
Both surface and underground mining were considered in GBM's PEA, and the PEA utilised an open pit mining cost of US$2.40/t for mineralised material and US$2.40/t of waste mined for its open pit optimisation.
The Mineral Corporation has reviewed a set of geological cross-sections of the Mineral Resource model, and on the basis of an overall slope angle of 55°, it would appear that the stripping ratio in an open pit could vary from as little as 1:1 (Mineral Resource tonne / waste tonne) to a maximum of 5:1.
The above broad assumptions are considered sufficient for the purpose of assessing Reasonable Prospects for Economic Extraction of the Mineral Resource.
14.6.2 Recovery methods
The test work undertaken by ANSTO and described in Section 13, utilised a preliminary acid leach flowsheet to produce lithium carbonate has as shown in Figure 17.
Should the process flow provided be utilised, the overall processing route would need to include both crushing and milling. Notwithstanding that these were preliminary in nature, and that the process flow is likely to be investigated further in a future PEA, the test work indicates that battery grade lithium carbonate can be produced from material from the Falchani Project, utilising conventional lithium processing steps and provides the following assumptions:
• An indicative lithium recovery of range of 85-90%;
• Indicative acid consumption of 153kg/t of material processed;
• An indicative acid cost of US$15/t processed.
The services required for the processing plant would include power, water and reagents. The supply of power and water were assessed in the PEA are not considered to be material impediments. Sulphuric acid would be the main reagent required, and it is likely to be procured from within Peru. The cost of these services has been included in the processing cost assumption.
A high-level estimate of the cost of processing has been made, to inform the assessment of Reasonable Prospects for Economic Extraction. This estimated cost is US$35/t treated, which includes the cost of crushing and milling, acid leach at or around 90°C, and the precipitation of lithium carbonate.
14.6.3 Project infrastructure
The project infrastructure to support the Falchani Project is anticipated to be essentially the same as for the proposed uranium operation.
Water is likely to be pumped from a local water source in the valley up to a raw water dam. Water treatment facilities would be required on site. The raw water supply is assumed to be of good quality such that no expensive treatment will be required.
The 138kV San Gaban power line runs near the MPA and it has been assumed that the power line is at 138kV. An extension of the power line will be required to reach the project site and any connection will be subject to negotiation with the supply authority.
It is likely that most equipment and materials will arrive containerised at Callao (Peru’s main port, located near Lima) or a more southern port such as Ilo with suitable handling facilities (Figure 1). Containers would be driven to site. The route is likely to include access via the Interoceanico Highway, from the city of Juliaca to the town of Macusani.
The connecting roads between the highway and the MPA would require significant upgrade and even rerouting to handle the proposed project generated traffic. In addition, access roads to various facilities such as the tailings dam and sulphuric acid tanks would have been considered.
It is reasonable to assume that a workforce consisting of skilled and semi-skilled people could be sourced for the Project, locally.
14.6.5 Environmental
With respect to Environmental Studies, Permitting and Social Impact, The Mineral Corporation is not aware of any issues related to the extraction of lithium which would be materially different from those already considered for the proposed uranium operation.
14.6.6 Capital Costs
Capital costs have not been explicitly considered in the assessment of Reasonable Prospects for Economic Extraction. However, while the Macusani Plateau is at a high altitude, the regional and local infrastructure is welldeveloped and there are other significant mining operations at similar altitudes within Peru, including Minsur's San Rafael tin mine. The PEA on the uranium project had an initial direct capital of US$250m in 2016 terms.
Given the regional and local infrastructure, the QP is of the view that the Falchani Project should be able to support the capital required to access the necessary power and water, and construct the roads and processing plant.
14.6.7 Operating costs
The operating costs which have been considered in the assessment of Reasonable Prospects for Economic Extraction are those included in Table 9.
14.6.8. Indicative cost analysis
The analysis presented herein is provided in order to support The QP’s assessment of Reasonable Prospects for Economic Extraction, such that these estimates could be justifiably included as Mineral Resources. Caution should be used when interpreting the results presented in this section, as the results have not been the subject of a prefeasibility or feasibility study and thus should not be interpreted as having demonstrated economic viability.
The Mineral Corporation has estimated the cost per tonne of product for a range of lithium grades from the cut-off grade (1200ppm Li) to the anticipated average of the Lithium-rich Tuff (3400ppm Li), at the maximum anticipated stripping ratio (5:1) and at an average stripping ratio (1:1). The other assumptions utilised to estimate the cash cost for producing Li2CO3 are shown in Table 9, and the results of the analysis are shown in Figure 19.
This high-level analysis would indicate that all of the material above the Mineral Resource cut-off grade has Reasonable Prospects for Economic Extraction, under the long-term forecast price of US$12 000/t of lithium carbonate, and hence their inclusion in the Mineral Resource estimate is justified. The indicative cost at the lowest grade and highest stripping ratio (“A” in Figure 19), can be interpreted as a worst-case scenario. As can be expected, the indicative project economics improve at higher grades and lower stripping ratios.