Shares in EMP Metals (CSE: EMPS; US-OTC: EMPPF) rose 11.5% Tuesday after the company released a preliminary economic assessment (PEA) that says its Viewfield brine project in Saskatchewan could produce 12,175 tonnes of lithium carbonate equivalent (LCE) annually over 23 years.
The report, prepared by Hub City Lithium says the weighted average lithium content of the LCE output would be 128 mg per litre from seven target zones. Viewfield has a pre-tax net present value (NPV) at an 8% discount of US$1.49 billion, and a pre-tax internal rate of return (IRR) of 55%.
Total capital cost are estimated at US$571 million, including a contingency of US$52 million. The capex would be repaid over 2.1 years.
“With payback in approximately two years, a 23-year project life and a pre-tax IRR of 55%, our Viewfield project is clearly a world class Lithium asset,” said EMP CEO Rob Gamley. “The PEA study underpins a significant property value and highlights the benefits of excellent brine concentrations, low operating costs and close proximity to local infrastructure in one of the best mining jurisdictions in the world.”
EMP’s preliminary report on Viewfield comes as lithium brine exploration continues to accelerate in Canada’s Prairie provinces. The Vancouver-based company’s PEA follows similarly positive assessments by E3 Lithium (TSXV: ETL; US-OTC: EEMMF) and Volt Lithium (TSXV: VLT), both advancing brine projects in neighbouring Alberta.
Development at Viewfield will be broken into three elements. First is drilling the production and disposal wells as well as laying the pipelines. Second is creation of the infrastructure related to pre-filtration requirements and the Koch direct lithium extraction solution. The third will include the infrastructure for concentration, refining, and conversion of lithium chloride eluent into battery-grade LCE using technology from Saltworks Technologies. A recovery factor of 50% total lithium in place was estimated for the PEA.
There are seven target zones at Viewfield, and they range in concentration from 84 mg per litre to 259 mg per litre. Production will begin on the Wymark C, D and E zones for the first seven years of operation. These are the shallowest and highest concentration zones. During these years, production will come to 18,850 tonnes of LCE annually.
When those zones are depleted, production will move to the Wymark A, B and Saskatoon A and B targets, beginning in year eight. These zones have lower concentrations of lithium chloride, and average annual output will be 10,200 tonnes LCE.
The base case used in the PEA assumes an after-tax NPV at 8% of about US$1 billion and an IRR of 45%. Anticipated operating costs are US$40.4 million or US$3,319 per tonne of LCE.
Viewfield is located in southeast Saskatchewan and its Tyvan and Mansur projects are in the province’s east. They sit on the Duperow formation that underlies the Prairies. It’s shallower than the Leduc formation underneath Alberta.
EMP shares traded at 58¢ apiece on Tuesday afternoon in Toronto, valuing the company at $53.1 million. Its shares traded in a 52-week range of 37¢ and 69¢.
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