Sunday, April 10, 2016

Nemaska Lithium Inc. - NMX.V

Nemaska Lithium Inc. - NMX.V is focused on the flagship Whabouchi mine in Quebec.

The Whabouchi property is located about 300 km from Chibougamau. The Feasibility Study encompasses a combined open pit and underground lithium mine plan at Whabouchi that contemplates a mine life of 26 years.



On April 4, 2016 the company released News
"Nemaska Lithium Inc. («Nemaska» or the «Corporation») (TSX VENTURE:NMX)(OTCQX:NMKEF) announces the results of an update to its May 2014 Feasibility Study (2016 updated Feasibility Study) on the Whabouchi Mine and Concentrator to be located in the Eeyou Istchee James Bay territory in Quebec and the Hydromet Plant to be located in Shawinigan, Quebec. A conference call on the 2016 updated Feasibility Study will be held on Monday, April 4th, 2016 at 2pm Eastern Time. Conference call details are found at the end of this press release."It was necessary to update our Feasibility Study to reflect the change of location of the hydromet plant from Salaberry-de-Valleyfield to Shawinigan, both in the Province of Quebec; and to reflect the optimization of our processes. These improvements will enable Nemaska Lithium to be a low costs producer of lithium hydroxide with a cost per tonne of CDN$2,693 (US$2,154/t); while lithium carbonate will have a cost per tonne of CDN$3,441/t (US$2,753/t). Our new costs of production for lithium hydroxide and lithium carbonate are respectively 22% and 18% lower than our production cost in the 2014 Feasibility Study. We also took into consideration the current trends in the US to Canadian dollar exchange rate, as well as the forecasted prices of lithium compounds to reflect the reality of price increases in the lithium compounds market. The end result is a 106% improvement in the pre-tax NPV (8% discount) base case, going from $924 M in 2014 to $1.9 B and a 49% improvement in the pre-tax IRR increasing to 37.7% from 25.2% in 2014," commented Guy Bourassa, President and CEO of Nemaska Lithium.
The 2016 updated Feasibility Study encompasses a combined open pit and underground mine plan and was prepared by Met-Chem, a division of DRA Americas Inc. (Met-Chem) and Seneca Inc. with contribution from Michel L. Bilodeau, Eng., M. Sc. (App.), Ph.D. for the cash flow model. The previous Mineral Reserve declared as part of the 2014 Feasibility Study with an effective date of May 13th, 2014 has not changed.
The 2016 updated Feasibility Study positively compares to the 2014 Feasibility Study filed on Sedar on June 27, 2014 on a number of fronts:
2016 Updated Feasibility Study Highlights
(All calculations assume a 6% Li
2O spodumene concentrate)
(All figures are quoted in Canadian Dollars (C$), unless otherwise specified)
2016 Updated
Feasibility Study
2014 Feasibility Study% Difference (Based on $CDN Figures)
Expected Mine Life26 years26 yearsNA
Life of Mine Revenue$9.2 Billion (US$7.4 B)
(average of $354 M/yr
$6.9 Billion (US$6.2 B)
(average of $267 M/yr
33% increase
Pre-Tax Net Undiscounted Cash Flow$6.2 Billion (US$4.9 B)
(average of $260 M/yr before initial CAPEX)
$3.4 Billion (US$3.1 B)
(average of $151 M/yr before initial CAPEX)
82% increase
After-Tax Undiscounted Cash Flow$3.9 Billion (US$3.1 B)$2.3 Billion (US$2.1 B)70% increase
Pre-Tax NPV 8% Discount (base case)$1.9 Billion (US$1.5 B)$924 Million (US$831 M)106% increase
After-Tax NPV 8%Discount (base case)$1.16 Billion (US$928 M)$581 Million ($523 M)100% increase
Pre-Tax Internal Rate of Return (IRR)37.7%25.2%49% increase
After-Tax InternalRate of Return (IRR)30.3%21%44% increase
Total Initial Capital Costs$549 Million (US$439M) in CAPEX including contingency$500 Million (US$450M) in CAPEX including contingency10% increase
Pay Back of Capital Costs2.4 years3.7 years35% decrease
Selling Price Lithium HydroxideUS $9,500/t FOB ShawiniganUS $8,000/t FOB Valleyfield19% increase
Selling Price Lithium CarbonateUS $7,000/t FOB ShawiniganUS $5,000/t FOB Valleyfield40% increase
Average Cost Per Tonne Spodumene Concentrate$181/t (US$145/t) FOB Whabouchi Mine$189/t (US$170/t) FOB Whabouchi Mine4% decrease
Average Cost Per Tonne Lithium Hydroxide$2,693/t (US$2,154/t)
FOB Shawinigan
$3,450/t (US$3,105/t)
FOB Valleyfield
22% decrease
Average Cost Per Tonne Lithium Carbonate$3,441/t (US$2,753/t)
FOB Shawinigan
$4,190/t (US$3,771/t)
FOB Valleyfield
18% decrease
Life of Mine Production5.5 million tonnes spodumene concentrate converted into approx. 714,000 tonnes battery grade lithium hydroxide and approx. 84,000 tonnes of battery grade lithium carbonate.
(average per year of approx. 213,000 tonnes of concentrate to produce approx. 27,500 tonnes of lithium hydroxide and approx. 3,245 tonnes of lithium carbonate)
5.5 million tonnes spodumene concentrate converted into approx. 728,000 tonnes battery grade lithium hydroxide and approx. 85,000 tonnes of battery grade lithium carbonate.
(average per year of approx. 213,000 tonnes of concentrate to produce approx. 28,000 tonnes of lithium hydroxide and approx. 3,250 tonnes of lithium carbonate)
NA
Exchange Rate $C to $US1 : 0.81 : 0.9NA
Mine and Hydromet Plant Plan
The Feasibility Study outlines a combined open pit and underground mine. The open pit mine Proven and Probable Reserves are 20 million tonnes at 1.53% Li2O. The underground mine Proven and Probable Reserves are 7.3 million tonnes at 1.28% Li2O.
During the first 20 years, production will be derived from an open-pit developed to a maximum depth of 190 meters and with an average strip ratio of 2.2 to 1. The open pit will be mined using a standard fleet of off-road mining trucks and hydraulic excavators at a rate of 2,740 tonnes of ore per day.
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