Surge Battery Metals PEA unveils $9.2B Nevada lithium project

[Redator]

Surge Battery Metals (TSXV: NILI) has issued a preliminary economic assessment (PEA) for its Nevada North Lithium Project (NNLP) that outlined what could be a low-cost, long-life producer of battery-grade materials for the US market.

The PEA, completed jointly by M3 Engineering & Technology and Independent Mining Consultants, was based on a two-phased build-out of the lithium plant to support an estimated 42-year conventional open-pit operation.

During that time, about 205 million tonnes of mineralized material will be mined at an average lithium grade of 4,016 parts per million, the report showed. Mining will start with the shallow, high-grade portions of the resource, currently estimated at 8.65 million tonnes in lithium carbonate equivalent (LCE).

The lithium plant will initially process mined material at an annual rate of 2.58 million tonnes during Phase 1, then doubling 5.15 million tonnes in year 4, when Phase 2 comes online, taking the average throughput over the life of mine to 4.88 million tonnes.

Over the 42 years, NNLP is projected to produce 86,300 tonnes of LCE annually at an average recovery rate of 82.8%. Peak production is expected in the sixth year at 109,100 tonnes.

According to the PEA, Phase 1 construction will cost around $2.97 billion, including $23 million in mine capex, while Phase 2 is expected to cost another $2.35 billion. Together with a sustaining capital of $1.51 billion, the entire project would cost $6.86 billion.

Using an LCE price of $24,000/t as the base case, the study gave the project an after-tax net present value (at 8% discount) of $9.21 billion and an internal rate of return of 22.8%. Its operating cost is pegged at $5,097/t LCE, owing to the near-surface, high-grade mineralization at NNLP. The report projected a 4.7-year payback.

Following the PEA release, shares of Surge Battery Metals jumped 15.8% to C$0.33 apiece by midday in Toronto, for a market capitalization of C$59 million ($43 million).

“NNLP could potentially be a major low-cost producer of battery-grade lithium carbonate for the United States battery industry, and we have taken a major step in achieving that with today’s results,” Surge Battery Metals CEO Greg Reimer stated in a press release.

“The combination of low OPEX, great ROI and the ability to produce large quantities of battery-grade lithium carbonate including a peak of 109,100 tonnes in one year showcases the Tier 1 status of NNLP,” he added.