Vancouver, British Columbia – Bearing Lithium Corp. (“Bearing” or the “Company“) (TSX Venture: BRZ) (OTCQB:BLILF) (FRANKFURT: B6K2) is pleased to announce the results from a Definitive Feasibility Study (“DFS”) for the Maricunga Lithium Project (the “Maricunga Project”) prepared in accordance with National Instrument 43-101 (“NI 43-101”). The report was prepared by WorleyParsons for the Maricunga joint-venture company, Minera Salar Blanco (“MSB”), and will be filed on SEDAR (www.sedar.com) within the coming days. The Maricunga Project is wholly owned and operated by the joint-venture company, Minera Salar Blanco (“MSB”) and Bearing holds an 18% interest in MSB along with Minera Salar Blanco SpA at 31% and Lithium Power International at 51%.
NI 43-101 Definitive Feasibility Study (DFS) Highlights
- The Maricunga Lithium Brine project’s Definitive Feasibility Study (DFS) supports 20,000 tonnes per annum (t/a) production of lithium carbonate (LCE) over 20 years.
- Project NPV1 (levered basis) of US$1.302B before tax at 8% discount rate, providing an IRR of 29.8% and a 3.4-year payback.
- Operating cost places Maricunga among the most efficient producers with an OPEX of US$3,772 per tonne (/t) without any credits from the potassium chloride (KCl) by-product, as KCI production was not considered in the DFS.
- Project Direct Development Cost estimated at US$456M, with Indirect Costs of US$45M and Contingency Costs of US$63M, providing a total CAPEX for the project of US$563M.
- Maiden reserve estimate prepared in accordance with NI 43-101 guidelines, account for a total of 742,000 tonnes of LCE2 , exceeding the project mine life production estimate.
- Project infrastructure including water rights have been secured through long term contracts for project construction and operation. Access to the National Power Grid has been granted by the corresponding authorities, thus assuring future power supply.
- DFS completed by Tier-1 engineering consultancy WorleyParsons (excluding the Reserve and Resource Estimate prepared by FloSolutions). Accuracy of Operating and Capital Cost estimates expected within a +/- 15% range.
- Discussions with major Chilean and international financial institutions to secure project development finance for the project have commenced and expected to be finalized during 2019. Approaches from international companies have been received regarding off-take agreements and future participations.
- Continuing to work with the Chilean Government and other corporate bodies to finalize all remaining licenses, agreements and operational relationships.
1 Assumes a 50% leverage. On an unlevered basis, the pre-tax NPV is US$1.286B, providing an IRR of 23.8% and a 4.1-year payback.
2 Adjusted for 58% lithium process recovery efficiency, total LCE reserves are 430,000 tonnes.
Minera Salar Blanco’s Chief Executive Officer, Cristobal Garcia-Huidobro, commented:
“The Company is very pleased to advise of the successful completion of the Definitive Feasibility Study to international standards, on its Maricunga lithium brine project, with highly experienced engineering company Worley Parsons. The strong economics detailed in the DFS confirms the overall attractiveness of the project, as previously identified in the PEA study. The project, through its Joint Venture partner company, Minera Salar Blanco, is now poised to take the project to the next stages of development. Priorities will now shift to secure financing for the project and off-take agreements for the high purity lithium carbonate output.”
Bearing Lithium’s Chief Executive Officer, Jeremy Poirier, commented:
“We are excited with the results of the DFS study that not only highlight the Maricunga project’s economic viability but also its low-cost competitiveness relative to other lithium projects globally. This DFS marks a transformational step for the company as it firmly places the Maricunga as one of the most advanced, pre-production lithium brine projects globally.
Definitive Feasibility Study Summary and Key Highlights
The Definitive Feasibility Study (DFS) reserve estimates of 742,000 tonnes of LCE (203,000 Proven – 539,000 Probable), supports the 20,000 tonnes per annum (t/a) projected for Maricunga throughout its 20 years mine life (c.f. Figure 1). Resources were updated to a total of 2,070,000 tonnes of LCE and reclassified as Measured or Indicated Resources in conformance to NI 43-101 definitions. (c.f. Figure 2).
Figure 1: Maricunga Lithium Reserve Estimate
Figure 2: Updated Maricunga Mineral Resource Estimate
The strong economics of the project, with a levered NPV on a pre-tax basis (8% discount) of US$1,302B, providing an IRR of 29.7% and a payback of 3.5 years, confirms the attractiveness of the project. On a pure equity basis, the pre-tax NPV is US$1,286 with an IRR of 23.8% (c.f. Figure 3).
Figure 3: Financial Model Summary (NPV, IRR, Payback)
The project has a potential to generate total life of operations revenues of US$6.93B and EBITDA (earnings before interest, taxes, and depreciation) of US$5.07B. After-tax cash flow over the life of the project is presented in Figure 4.
Figure 4: Annual Cash Flow
Operating Cost (OPEX) of US$3,772, places Maricunga among the most efficient producers (c.f. Figure 5 and Figure 6). Production process design, as well as future supply contract for the equipment and production plant, was awarded to Tier-1 German company GEA Messo, one of the leading suppliers in the lithium industry.
Figure 5: Lithium carbonate cash cost curve, including royalties, 2027 (US$/t)
Figure 6: Lithium carbonate cash cost curve, excluding royalties, 2027 (US$/t)
DFS price estimates were delivered by Roskill Consulting Group ltd (“Roskill”). Roskill forecasts that the average annual price (in real terms) during the life of the project for battery grade lithium carbonate will be US$ 14,400 /t.
With all the necessary project infrastructure including water and power supply, as well as road and port access now secured, priorities now will shift to secure construction financing for the project. Discussions with major Chilean and international financial institutions to secure project finance for the project have commenced and expected to be finalized during 2019. Also, a number of international companies have approached the joint-venture company for off-take agreements and potential equity participations.
Don Hains, P.Geo., who is a technical consultant to the Company and is a qualified person within the context of National Instrument 43-101, has read and takes responsibility for this news release.