Piedmont and Sayona confirmed the terms of the spodumene concentrate offtake agreement between SYQ and Piedmont
Piedmont Lithium (“Piedmont”) (Nasdaq: PLL; ASX: PLL), a leading, diversified developer of lithium resources critical to the U.S. electric vehicle supply chain, today announced that the board of directors of Sayona Quebec Inc. (“SYQ”), which is owned 75% by Sayona Mining (“Sayona”) and 25% by Piedmont, authorized the restart of spodumene concentrate production at its North American Lithium (“NAL”) project located near Val-d’Or, Quebec. The NAL restart will feature significant operational upgrades totaling approximately $80 million aimed at improving product quality and plant utilization. Long-lead equipment was ordered and detailed design engineering commenced in late 2021 based on our jointly planned timeline. Operations at NAL are expected to commence in the first half of 2023. The NAL restart project will be entirely funded from pro-rata cash contributions by Sayona and Piedmont, with each party having completed significant capital raises in the first half of 2022.
“We are excited to take this essential next step toward supplying much-needed North American lithium resources,” said Keith Phillips, President and Chief Executive Officer of Piedmont Lithium. “Authorizing the restart of the NAL project is consistent with our plan to become a revenue generating company in 2023 and contributes to our strategic goal of becoming a leading North American lithium producer through our integrated portfolio of lithium projects.”
Piedmont and Sayona confirmed the terms of the spodumene concentrate offtake agreement between SYQ and Piedmont. Under the offtake agreement, Piedmont is entitled to purchase the greater of 113,000 metric tons per year of spodumene concentrate or 50% of production from the NAL project. The agreement also covers concentrate produced from ore mined at SYQ’s Authier Project. Purchases are subject to market pricing with a price floor of $500 per metric ton and a price ceiling of $900 per metric ton.
Under the terms of the offtake agreement, if Sayona and Piedmont jointly construct and operate a lithium conversion plant in Quebec, then spodumene concentrate produced from the NAL project would be preferentially delivered to that chemical plant upon start of operations. Any remaining concentrate not delivered to a jointly owned conversion plant would first be delivered to Piedmont up to Piedmont’s offtake right and then to third parties. Sayona and Piedmont expect to begin a series of technical studies with respect to lithium conversion in Quebec and will update the market in the coming months.
“This is a fresh start for NAL. The planned capital upgrades will have a positive impact on both product quality as well as reduced operating costs achieved through improved plant utilization and higher spodumene recoveries,” said Phillips. “We also look forward to the commencement of technical studies for lithium chemical production in the province of Quebec, which is an ideal location for future lithium hydroxide production given the province’s abundant mineral resources, low-cost hydroelectricity, and supportive provincial government.”
Source: Company Press Release