Alpha Lithium said that its fully-owned Tolillar lithium brine project in the Salta Province of Argentina will require an initial capital cost (capex) of $777m, based on the findings of the preliminary economic assessment (PEA).
Engineering firm Ausenco Chile Limitada prepared the PEA for the Argentine lithium project.
The estimated initial capital cost, which includes a contingency of $179m, is for the first phase of 25,000 tonnes per annum (tpa) of lithium carbonate chemicals.
Alpha Lithium said that capital costs for the second phase are not included in the PEA analysis.
The management expects the capex for the second phase to be about 35% lower than that of the first phase by leveraging economies of scale.
The PEA has reported a 25,000tpa of commercial-scale operation to produce battery-grade lithium carbonate chemicals at the Tolillar lithium project.
Located within the Argentina portion of the Lithium Triangle, the Tolillar lithium project covers 27,500ha.
Alpha Lithium president and CEO Brad Nichol said: “The results of the PEA demonstrate that Alpha’s Tolillar project is an exceptionally robust lithium carbonate project, even with conservative assumptions.
“Tolillar represents one of the last, large, independent, wholly-owned lithium brine salars globally, and once the latest technical work is incorporated, Tolillar should become an even larger and longer-lived operation.”
The lithium developer said that the Tolillar project is estimated to bring cumulative free cash flow of $5.3bn over a 25-year production life.
In addition, the PEA estimates a post-tax net present value (NPV) of $1.5bn and an internal rate of return of 25.1% with a payback period of 3.8 years from the start of production.
