Canada-based Grounded Lithium said that the first phase of the Kindersley lithium project located in Saskatchewan, Canada will require an initial capital cost (capex) of $335m, based on the findings of a preliminary economic assessment (PEA).

The capex comprises a capital of $78m for the wellfield and $212.6m for the central processing facility along with a contingency of $44.8m.

According to the publicly-listed lithium resource company, the first phase of the Kindersley project will produce 11,000 tonnes of battery-grade lithium hydroxide monohydrate per year.

Grounded Lithium also expects to develop additional phases at the Kindersley lithium project based on the robust commercial merits of the economics of the PEA.

In the first phase of the Kindersley project, only 24 of the current 300 sections of lithium rights will be developed. The remaining sections will support the development of subsequent phases of the lithium project.

Grounded Lithium president and CEO Gregg Smith said: “The independent economic results of Phase 1 of the KLP compare favourably within the lithium mining industry from a CAPEX and OPEX perspective and we believe the results of the PEA bode well for critical future steps, including securing strategic partnerships, off-take agreements, and capital formulation for a commercial project.

“We now focus our corporate attention on the completion of a field pilot with Koch Technologies Solutions’ extraction process, while at the same time undertaking certain field activities to provide higher certainty on our resources leading to a pre-feasibility study.”

The PEA estimates a post-tax net present value (NPV) of $1bn for the Canadian lithium project.

It also projects a post-tax internal rate of return of 48.5% for the Kindersley project with a payback period of 3.7 years inclusive of lead time design and construction of 18 months.