E3 Lithium study pegs Alberta project cost at $2.5B

E3 Lithium (TSXV: ETL; US-OTC: EEMMF) says its Clearwater project with Canada’s largest resource of the battery metal will cost US$2.5 billion to build in the same oilfields where Alberta’s petroleum industry boomed.

The project between Calgary and Edmonton aims to produce 32,250 tonnes a year of lithium hydroxide monohydrate (LHM) over half a century, according to a prefeasibility study issued on Wednesday.

Clearwater has an after-tax net present value of US$3.7 billion at an 8% discount rate with a 24.6% internal rate of return, the study shows. It estimates operating costs of US$6,200 per tonne of LHM and uses a price of US$31,344 per tonne.

“This report signifies a fundamental shift for E3 Lithium,” CEO and president Chris Doornbos said in a release. It sets “us on a clear pathway to commercial development and positions the Clearwater project and Bashaw district as a strategic lithium asset in Canada and North America,” he said.

Calgary-based E3 will tap some 38 wellheads in the Leduc oil reservoir to access the lithium brine. Imperial Oil (TSX: IMO) invested $6.4 million in E3 in 2022. The process, based on a pilot project, is to use recycled water and sequester carbon to lower emissions. A natural gas plant would power the project.

Direct extraction

Lithium chloride is to be extracted from degassed brine through a direct lithium extraction process using an aluminate-based sorbent in a continuous separation process, the company said.

Clearwater has 1.3 million proven and probable tonnes of LHM in the brine grading at 75 mg per litre. It’s part of the Bashaw district’s 18.4 million measured and indicated tonnes of LHM, the country’s largest lithium resource, according to the report.

The new study compares with a 2020 preliminary economic assessment that showed an after-tax net present value of US$820 million at an 8% discount rate with an internal rate of return of 27%. It estimated a construction cost of US$602 million.

Waste calcium carbonate generated during the production of LHM could be sold for use in cement, although the study doesn’t include the potential windfall.  

Shares in E3 Lithium closed less than 1% higher in Toronto at $1.43 apiece, valuing the company at $111.4 million. They’ve traded in a 52-week range of $1.36 to $5.72.