Canada-based Wealth Minerals has announced a positive Preliminary Economic Assessment (PEA) for the Kuska project at Salar de Ollagüe in the Antofagasta region, Chile.

Engineering services company DRA Global, together with resource experts from Montgomery & Associates and other third-party consultants, produced the PEA.

The Kuska project, previously known as the Ollagüe project, holds an estimated 741,000 tons of Lithium Carbonate Equivalent (LCE) indicated resources grading 175mg/l.

According to the PEA, the project will have a pre-tax, pre-royalty net present value at a 10% discount (NPV10) of $1.65bn and an internal rate of return of 33% for the project.

The assessment estimates baseline capital expenditures at $749m, and operating expenses at $5,849 per tonne of lithium carbonate produced.

Wealth Minerals CEO Hendrik van Alphen said: “We are extremely happy with the positive PEA results and this important milestone to develop the Kuska project at our Ollagüe salar concessions.

“The PEA is a quality study that has thoroughly incorporated all the technical investigation, field data and best industry practices necessary to make Kuska into a world-class lithium production operation.

“Given Wealth’s long experience with Direct Lithium Extraction technology (DLE), we paid particular attention to this aspect of the PEA, incorporating an extensive selection process for the most suitable DLE equipment and technology providers.”

The PEA recommends the Kuska project development in two phases, with an estimated 20,000mtpa LCE output and a Life of Mine (LOM) of 20 years.

The initial phase of development involves building a 10,000tpa mining operation and plant in the initial phase, with plans to double the capacity within two years.

Wealth Minerals intends to use a mature DLE technology converting lithium-bearing brine into battery-grade Lithium Carbonate (LC), which is a result of almost 1.5 years of research.

The mining operation will comprise a well-field with lithium-rich brine pumping capacity and a re-injection feed system to return Li-depleted brine into the salar.

The combination of wells and depleted brine operations, together with DLE methods, are expected to enable a near-zero environmental impact on the salar.

To de-carbonise its lithium production operations, the company is planning to use renewable energy supplies to power its production plant and associated infrastructure.

Wealth Minerals Chile operative CEO Francisco Lepeley said: “Our Kuska project is being developed consistently with the National Lithium Strategy defined earlier this year by the Chilean government.

“We are incorporating into our development plan the use of environmentally friendly DLE technology, the active involvement and collaboration of the Quechua indigenous community, and prospective industry partnerships that may facilitate downstream processing of lithium into value-added products.

“The positive economic figures that come with this PEA are very good news to our WML shareholders, the Chilean state, and all other stakeholders.”