Analysis - Lithium

Lithium


Lithium

Lithium (chemical symbol: Li) is the lightest of all metals. It does not occur as a pure element in nature, but is contained within stable minerals in a range of hard rock types or in solution in brine bodies within salt lakes, in sea water or geothermal brines. The contained concentration of lithium is generally low and there are only a limited number of known resources where lithium can be economically extracted.

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Summaries:

Dean Clayton Valley project; outcropping lithium-rich claystone

1. Introduction

It has been relatively quiet around Nemaska Lithium the last 6 months or so, after it started construction on the Phase I plant and completed several early stage parts of the Whabouchi Mine, besides looking for capex financing packages along the way. Although lithium product prices held up very well at relatively high levels and are even slowly rising again:

Executive summary

  • Nemaska Lithium secures a 8000t LCE per annum off-take with FMC
  • LCE prices seem to be bottoming for now, a deficit is still expected well into 2018
  • The upside for the Nemaska thesis is still intact

Executive summary

  • Nemaska Lithium has one of the best hard rock lithium deposit worldwide
  • The Whabouchi project, located in mining friendly Quebec, is fully permitted, and has the second highest grade of lithium oxide and second largest hard rock reserves globally behind the Greenbushes deposit in Australia
  • An updated Feasibility Study has been completed this year, generating solid results with an after tax NPV8 of US$928M (C$1.2B) and IRR of 30.3% based on a $439M capex and conservative $9500/t lithium hydroxide price, making it the most advanced lithium project around, and indicating lots of upside left after the recent run up
  • Nemaska just finalized the $12M Johnson Matthey Battery Materials off take agreement which was the last building block needed to complete the $38M funding needed for the important Phase 1 plant, and expects to start production from the Phase 1 Plant in Q1 2017
  • Through a series of catalysts, commercial production of the Whabouchi Mine and commercial Hydromet plant is planned to commence in H2 2018, which makes it the first new lithium producer in the Americas after Orocobre, and is in time to profit from the rapidly developing global EV/energy storage/fossil free trend

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