Lithium South Development Corporation (TSXV: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) produced positive results from its independent Preliminary Economic Assessment (PEA) for its Hombre Muerto North Lithium Project (HMN Lithium Project) near Salta, Argentina.
Released on Monday, the study assumed a lithium price of USD$20,000/tonne (t) for a production start-up in 2029. This was based on current published market analysis and benchmarking against price assumptions in multiple technical reports from similar brine lithium projects.
More specifically, the benchmarking exercise yielded a long-term price range of between USD$20,000 and US$25,000/t. This included an average of US$22,400/t over seven projects. The company’s qualified person figured that USD$20,000/t would be reasonable, despite the recent volatility of lithium prices. Prices declined from approximately USD$85,000/t in November 2022 to approximately USD$13,000/t in 2024.
Lithium South updated its capital expenditure (CAPEX) numbers by getting quotes from suppliers in the Puna region of Argentina. CAPEX estimates incorporate an indirect cost equivalent to 16.6 per cent of direct costs, along with a contingency of 30 per cent of total costs.
“We are very pleased that Lithium South has advanced the HMN Lithium Project to a PEA based on 15,600 tonnes per year lithium carbonate technical grade production,” Adrian F.C. Hobkirk, company president and CEO, said.
“The PEA results highlight attractive economics associated with the project, including a short payback and exceptional internal rate of return. We look forward to taking the HMN Lithium Project to the next stage of development as quickly as possible.”
Operating cost chart from Lithium South.
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Lithium South HMN Lithium Project is six properties
The company’s Argentine subsidiary holds a collection of properties acquired under purchase options from the existing owner for the HMN Lithium Project.
These properties, held as “minas”, or full mining licenses not subject to further area reduction requirements, are located at the northern portion of the Salar del Hombre Muerto, at the boundary zone of the Catamarca and Salta provinces, situated 170 km southeast of the city of Salta.
The HMN Lithium Project comprises six properties distributed over the Salar, totalling 3,237 hectares. All properties are subject to a mining license for borates, and the area is free from any known environmental liabilities.
Similar brine chemistry to other brines in the region allows for processing using existing technology employed by producers. The design features a nominal extraction rate of 179 liters per second. Initially, lime is added to the brine after preconcentration, effectively removing a significant portion of magnesium as magnesium hydroxide and sulfate as gypsum.
Lithium South sends the product to the lithium carbonate plant after the brine reaches 0.75 per cent concentration. Remaining noxious impurities are eliminated through selective precipitation by adding a solution of soda ash and slaked lime. The company then follows this with a final ion exchange polishing step. The purified brine then proceeds to specially designed carbonation precipitators.
To produce technical-grade lithium carbonate, the company introduces a soda ash solution at high temperatures, causing the precipitation of solid lithium carbonate. The company then filters the product before washing, repulping, centrifuging again, and washing it again. After which, it’s dried and packaged in maxi bags before being sent to the client.
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