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LITHIUM | Critical Elements
CRITICAL ELEMENTS Developing a project in Québec – the premier lithium district of the Western world
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LITHIUM | Critical Elements
During the last 18 months Critical Elements has been ticking off major items on its list of deliverables in routine fashion. The TSX-V listed company is progressing the Rose Lithium-Tantalum project located in James Bay, QuÊbec – a premier mining jurisdiction and a major global lithium hub. Last year, Critical Elements completed pilot plant work for its spodumene production facility before announcing results from its lithium carbonate conversion plant pilot study in May. By mid-2017 the company had submitted an environmental impact study (EIS) for the Rose project, but perhaps the biggest development thus far was the publishing of a feasibility study. The feasibility outlined a string of attractive metrics which is imbuing the company with an additional layer of confidence as it approaches the business end of the project. The study indicated that the Rose project will produce an average annual production of 186,327 tonnes of chemical grade lithium concentrate and 50,205 tonnes of technical grade lithium concentrate, along with 429 tonnes of tantalum concentrate on an average annual basis over a 17-year mine life.
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LITHIUM | Critical Elements
At the time, president Dr Steffen Haber
with sustaining capital valued at C$126.8
said the feasibility was a ‘major milestone’
million over the life of mine.
for Critical Elements and when RGN caught up with him, he reiterated the company’s
Finally, the project’s NPV was calculated at
satisfaction with the results.
C$726 million (after-tax) with a superior IRR of 34.9% on price assumptions of
“In combination with the piloting results
US$1,500 per tonne technical grade lithium
preceding the feasibility, the superior
concentrate, US$750 per tonne chemical
quality of the ore has been confirmed and
grade lithium concentrate and US$130 per kg
demonstrated by the results,” he declares.
tantalum pentoxide.
The detailed study also included an economic Overall the figures outlined in the feasibility analysis which estimated an initial capital cost are highly encouraging for Critical Elements of C$341 million including all infrastructures,
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and provide the company with a degree of
be converted into lithium carbonate.
clarity as it seeks project financing for the first phase of the Rose project.
Two-phased approach
In terms of the timeline for Phase 1 of the project, Critical Elements is moving substantially towards detailed engineering,
The company is following a two-phased
and expects to complete this process and
approach, whereby Phase 1 will produce
finalise permitting by year end before
technical grade spodumene for customers
commencing construction at the start of
in the glass and ceramics industries across
2019.
several global markets including Europe, the US and China. Chemical grade spodumene
“That means by the end of 2019 or the
will also be produced in the first phase,
beginning of 2020, we will start the
before being shipped to China where it will
commissioning of the plant and then the idea
LITHIUM | Critical Elements
is to commence selling the product in mid-
process, Critical Elements was able to easily
2020,” Haber outlines.
convert spodumene material into lithium carbonate of battery quality and at a purity
Phase 1 of the Rose project is set to push
reading of 99.9%, while the impurity profile
Critical Elements into a cash flow generative
of the lithium chemicals was labelled
position ahead of Phase 2, which will mark
‘outstanding’ by the company in the news
the company’s entrance into the lithium
release.
chemical producing space. “We are very encouraged by the results of the Critical Elements will construct a lithium
piloting work because again it demonstrates
carbonate processing plant during Phase 2
the superior quality of our ore, given that the
of the project in preparation to supply the
process delivered such high yields and high
major growth sector that is the lithium-ion
recovery rates.”
battery market, and has been buoyed by the results of the lithium carbonate pilot study it
Over the coming months, Critical Elements
conducted last year.
will begin working on a feasibility study for Phase 2 which is scheduled to take roughly
Using the well-known thermal leaching
nine months, After this is completed, the
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company will move into detailed engineering
will arrive into the market with impeccable
on that stage of the project.
timing during this transformative period in the global lithium industry.
“The carbonate plant presents a much bigger challenge to us compared to the spodumene
In recent years a supply deficit has emerged
plant, therefore we foresee the start up of
in the lithium space, but with new hard rock
the carbonate plant in 2023,� reveals Haber.
producers slowly coming online Critical
Timing the market
Elements sees the market balancing in the early 2020s, after which it will be close to
In fact, multiple projections from leading
offering its own supply of lithium carbonate
research bodies and firms within the lithium
to a global market which could have a depth
sector have flagged the early to mid-2020s
of demand in the region of 450,000 tonnes in
as a critical period during which demand
2023.
for battery grade lithium chemicals will skyrocket, based on predictions about EV
Beyond 2023, some estimations are putting
take-up around the world.
lithium carbonate demand at close to 1 million tonnes per year, therefore any lithium
With these projections in mind, Haber is adamant that the company’s Phase 2 plant
sources of a similar scale to the Rose project
LITHIUM | Critical Elements
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are going to be vital for the industry to keep
in Québec offers a multitude of advantages
up with spiralling demand.
for Critical Elements. Québec has been widely hailed as the hub for lithium production in
“With the quality [outlined in the feasibility],
the Western hemisphere and with a deeply
we will have a very good position in supplying
ingrained mining community going back
material into that market and that’s what we
several generations, the company has access
are also seeing in terms of potential strategic
to a specialised labour force and all the
partners.
necessary infrastructure for a mining project.
“The overall supply chain of the battery
“A hydroelectric power line runs directly
industry is already very interested to learn
across our deposit and we are very close to a
more about new supply coming onstream in
main road which is very well maintained and
that time frame, and they are getting more
highly accessible for trucks.
and more nervous about the potential supply of the existing players.”
“In terms of the population, you have the Cree nations in the vicinity who provide a
Returning to the Rose project, being located
lot of services to the mining industry and
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LITHIUM | Critical Elements
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“THE OVERALL SUPPLY CHAIN OF THE BATTERY INDUSTRY IS ALREADY VERY INTERESTED TO LEARN MORE ABOUT NEW SUPPLY COMING ONSTREAM AND THEY ARE GETTING NERVOUS ABOUT THE POTENTIAL SUPPLY OF THE EXISTING PLAYERS” - DR STEFFEN HABER – PRESIDENT
today there is a substantial amount of people
Elements has appointed former CFO of
available to us that have been educated in
Rockwood Lithium Marcus Brune to the
the ways of working in a mine.”
board.
The company recently announced it had
“I am very pleased that Marcus has joined the
reached an agreement with the Cree Nation
team,” says Haber, who worked closely with
of Eastmain and Niskamoon Corporation for
him at Rockwood. “He is an expert in strategy
a spawning ground enhancement project at
and corporate finance and he is helping us a
Lake Sturgeon near the James Bay highway.
lot in structuring the next financial steps to
It is this sort of positive engagement with the
be taken.”
local communities that Haber views as vital in terms of leaving a positive legacy in the
The next key deliverable for Critical Elements
region that has been so generous to them.
is to secure C$20-30 million in equity to help execute its plans for Phase 1 of the Rose
Beyond the advantages of working in the
project, which will be followed by Phase 2
province of Québec, Critical Elements is
when the company will enter the lithium
also pleased to be working in a country
carbonate production business in 2023.
with such an accommodating attitude to mining as Canada, which has clear rules
With several potential strategic partners
and procedures and was recently voted the
interested in working with the company,
world’s top mining destination by the Fraser
Critical Elements appears extremely well
Institute.
placed to start its ascent into the heart of the global lithium sector.
Now as it looks to secure funding for its upcoming move into detailed engineering on the first phase of the Rose project, Critical
abj
Published by Anderson Murray Media Ltd
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