Highlights
The Lithium Universe Technique
– Optimistic, sturdy Becancour Refinery PFS even in low pricing atmosphere
– LU7 has a counter cyclical technique – develop venture, prepared for worth restoration
– Closing the Lithium Conversion Hole – development in useful resource and finish market initiatives
The Monetary Modelling
– Economically viable with glorious pre-tax NPV8% of roughly US$779M
– IRR (pre-tax) of roughly 23.5% and payback of three.5 years primarily based on;
– Value forecast of US$1,170/t SC6 and US$20,970/t for battery grade Li2CO3
– Present spot worth is approx. US$775/t SC6 and US$10,680/t for battery grade LC
– Working prices at round US$3,976/tonne; capital value estimate of US$494 million
– Anticipated annual income of approx US$383 million and EBITDA of round US$147 million
– Venture break even at round US$780 /t (SC6) and round US$14,000 per tonne LC
The Design
– LU7 gives an answer to worldwide lithium conversion failures and startup issues
– Utilizing confirmed Jiangsu Refinery working know-how and lithium trade expertise
– Producing as much as 18,270 tonnes/12 months of inexperienced battery-grade lithium carbonate
– Smaller off-the-shelf model plant somewhat than giant difficult-to-operate amenities
– Preliminary concentrate on lithium carbonate manufacturing – feed for LFP batteries
– Assumptions primarily based on actual working information and expertise – not new aspirant
The Location
– Quebec supreme trans-Atlantic lithium conversion centre, akin to China
– Feedstock from Canada, Brazil and Africa – finish market North America
– Essential value advantages – low-cost inexperienced energy, transport mine/finish market financial savings, US/Canada tariffs
– 95% GHG emission discount with Hydro Quebec’s inexperienced vitality
Subsequent Steps
– Offtake discussions with OEMs underway
– LU7 continues to progress full Definitive Feasibility Research
The Firm plans to construct a dependable, low-risk lithium conversion refinery with an annual capability of as much as 18,270 tonnes, using confirmed experience from the Jiangsu processing mannequin. The power will produce environmentally pleasant, battery-grade lithium carbonate. The Firm goals to ascertain a Canadianbased lithium chemical compounds enterprise, buying spodumene feedstock from each home suppliers and worldwide markets, together with Brazil and Africa and producing a battery grade lithium carbonate product. This aligns with the Firm’s broader imaginative and prescient of contributing to the North Atlantic lithium provide chain and shutting the Lithium Conversion Hole.
The venture’s economics are extremely beneficial, even with conservative worth assumptions. The refinery is economically viable with a pre-tax Internet Current Worth (NPV) of roughly US$779 million, utilizing an 8% low cost price, and a pre-tax Inside Price of Return (IRR) of round 23.5%. The payback interval is estimated at 3.5 years. The monetary mannequin is constructed on cautious worth forecasts of US$1,170 per tonne for spodumene focus (SC6) and US$20,970 per tonne for battery-grade lithium carbonate equal (LCE). LU7’s administrators imagine they’ve an inexpensive foundation for utilizing the assumed worth within the examine of US$20,970 per tonne for battery grade lithium carbonate. Key operational assumptions embrace 86% plant availability and 88% lithium restoration. At full manufacturing capability, the venture is anticipated to generate roughly US$383 million in annual income, with prices totalling round US$236 million, resulting in an annual EBITDA of roughly US$147 million and a gross margin of within the area of 38%. Submit-tax, the NPV at an 8% low cost price is estimated at roughly US$501 million. The capital value for the venture is estimated at US$494 million, which features a contingency of US$68 million. The capital value estimate relies on superior design specs from the Jiangsu Lithium Refinery mannequin, making certain sturdy monetary planning and projection. These elements spotlight the venture’s robust monetary viability, even below conservative pricing situations.
MANAGEMENT COMMENT
Lithium Universe Chairman, Iggy Tan stated “The profitable completion of our Preliminary Feasibility Research is a big milestone for the corporate, particularly on condition that we solely launched in August of final 12 months. Early on, we acknowledged that bridging the lithium conversion hole in North America, leveraging our collected lithium experience and the confirmed know-how from Jiangsu, was a transparent and strategic path ahead.”
“Our counter-cyclical technique is centered on advancing initiatives throughout market downturns, permitting us to strategically place ourselves for development because the market rebounds. We’re devoted to funding and establishing a confirmed, low-risk lithium conversion refinery in Quebec, marking step one towards establishing Quebec because the lithium conversion hub for the Transatlantic area.”
“The robust NPV and returns for the venture point out an economically viable venture. We will probably be trying to safe strategic companions on the venture stage to assist fund the venture. There may be important curiosity from OEMs with spodumene offtake provide looking for conversion exterior of China, and discussions are already underway. We’re assured that the Becancour lithium refinery, with an annual capability of 18,270 tonnes, will emerge as a frontrunner in producing inexperienced, battery-grade lithium carbonate.”
“The Firm will advance rapidly to finish a Definitive Feasibility Research and finalise offtake partnerships”.
COUNTER CYCLICAL STRATEGY
Leveraging expertise with cyclical actions within the lithium market, Lithium Universe makes use of a counter-cyclical technique targeted on creating initiatives throughout market downturns to strategically place itself because the market recovers. Though the latest oversupply of lithium has resulted in worth declines, the Firm stays assured within the robust long-term demand for lithium, pushed by the rising electrical car (EV) and vitality storage sectors. This ongoing demand underscores the necessity for continued funding in lithium mining and refining initiatives. LU7 believes that the present market situations present an optimum window for venture improvement. With falling and depressed costs, much less viable initiatives and weaker gamers have been cleared out of the market, leaving area for extra sturdy and well-prepared corporations. By advancing its Becancour Lithium Carbonate Refinery throughout this downturn, LU7 goals to be prepared for a worth restoration and capitalize on future development, making certain its plac within the evolving lithium market.
Over the previous 4 years, lithium costs have skilled important fluctuations because of the increasing electrical car (EV) market and elevated demand for vitality storage. From 2020 to early 2022, costs surged as provide struggled to maintain tempo with demand pushed by the worldwide shift in the direction of cleaner vitality. By 2022, lithium carbonate and hydroxide costs had risen over 400%, influenced by COVID-19-related provide disruptions. As of late 2023, costs have begun to stabilize on account of new mining and refining initiatives. Though latest oversupply has led to cost declines, long-term demand for lithium stays robust, necessitating continued funding in mining and refining.
The lithium market is at present present process a rebalancing section on account of oversupply and strategic manufacturing shutdowns by main producers. Corporations and operations comparable to Core Lithium, Greenbushes JV, Mineral Sources, Albemarle’s Kemerton and extra not too long ago, CATL’s Yichun mine and Arcadium’s Mt Cattlin have both slowed manufacturing or halted operations in response to latest worth drops. Regardless of these provide changes, demand for lithium stays sturdy, notably from rising EV gross sales in China. LU7 believes that costs are anticipated to recuperate to extra sustainable ranges over the subsequent 12-18 months, though not reaching the unsustainable peaks of 2021-2022. This market rebalancing is important for the sustainability of future lithium initiatives and the general market. LU7’s counter-cyclical technique means creating a venture throughout market downturns to learn when the market recovers.
CLOSING THE LITHIUM CONVERSION GAP
At the moment, over 90% of world LFP battery manufacturing is concentrated in China, however North America is quickly increasing its capability. Ford plans to construct a $3.5 billion manufacturing facility in Michigan with an annual capability of 35 gigawatt-hours (GWh) by 2026, whereas Tesla is creating a facility in Nevada with a ten GWh capability targeted on bettering charging pace and vitality density. LG Power Options is investing $5.6 billion in Arizona to supply LFPs for vitality storage techniques and EVs.
By 2028, North America is anticipated so as to add almost 1,000 GWh of battery manufacturing capability, supporting the manufacturing of 10 to 13 million electrical automobiles yearly. Key states like Georgia, Kentucky, and Michigan will lead this development. Canada can also be investing within the sector, with partnerships from Volkswagen, Stellantis, and others, serving to to safe its place within the international automotive market and meet the rising demand for EVs.
The Firm estimates that 850,000t of LCE each year will probably be required to fulfill demand in North America by 2028.
*To view the complete particulars of the announcement, please go to:
https://abnnewswire.web/lnk/WY641GJW
About Lithium Universe Ltd:
Lithium Universe Ltd (ASX:LU7) (FRA:KU00) (OTCMKTS:LUVSF), headed by trade path blazer, Iggy Tan, and the Lithium Universe crew has a confirmed observe report of fast-tracking lithium initiatives, demonstrated by the profitable improvement of the Mt Cattlin spodumene venture for Galaxy Sources Restricted.
As an alternative of exploring for the sake of exploration, Lithium Universe’s mission is to rapidly acquire a useful resource and assemble a spodumene-producing mine in Quebec, Canada. In contrast to many different Lithium exploration corporations, Lithium Universe possesses the important experience and abilities to develop and assemble worthwhile initiatives.
Supply:
Lithium Universe Ltd
