A prefeasibility study (PFS) into the Kathleen Valley lithium project, in Western Australia, has estimated that the project would require a capital allocation of A$240.5-million to develop a two-million-tonne-a-year mining and processing operation.
ASX-listed Liontown Resources on Mondays said that based on the current ore reserves, the Kathleen Valley operation would have a mine life of 26 years producing at an average rate of 295 000 t/y of more than 6% spodumene concentrate.
First production is expected in 2024, with the PFS estimating cash cost of A$564/t, while life-of-mine free cash flow after tax has been estimated at A$1.94-billion.
“This high-quality PFS builds on the scoping study completed earlier this year. It provides investors with a snapshot of what we are confident will be the first of a new generation of Australian hard rock lithium projects timed to benefit from the next wave of lithium demand,” said Liontown MD David Richards.
“The PFS outlines a robust two-million-tonne-a-year project capable of delivering strong financial returns from an initial openpit mining operation. It will allow us to move into a definitive feasibility study (DFS) that will be based on an updated mineral resource and ore reserve that reflects the results of our ongoing drilling success and will also include other important project optimisations and enhancements.”
The PFS estimated a post-tax net present value of A$507-million and an internal rate of return of 25%, with the pay-back period estimated at four years post production.
Liontown on Monday said that opportunities existed to improve the financials of the project, including generating additional revenue from the recovery of tantalum, which will be determined as part of the DFS and the future integration of a potential underground operation to expand annual production and bring forward higher-grade material from an expanded mineral resource.
