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Monday, Apr 15, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Lithium

Wealth Minerals releases positive preliminary economic assessment for Chilean lithium property

Plant concept incorporates water recycling and waste treatment facilities to minimize environmental impact

Wealth Minerals releases positive preliminary economic assessment for Chilean lithium property
The setup for a drill hole is finalized during the summer at the Kusko property. Image via Wealth Minerals.

Wealth Minerals Ltd (TSXV: WML) (USOTC: WMLLF) newly released preliminary economic assessment (PEA) for the Kuska lithium salar project in northern Chile outlines a production target of 20,000 metric tons per year for a duration of 20 years.

According to the resource report released Thursday, there are estimated 741,000 tons of lithium carbonate equivalent (LCE) in indicated resources with a grade of 175 milligrams per litre, along with 701,000 tons of LCE in inferred resources with a grade of 185 mg/L. Wealth Minerals based the Kuska project on their maiden resource report.

The company also acquired an additional 2,500 hectares of mineral concessions adjacent to the concessions covered in the resource report. To date, the company has not conducted any investigations for lithium in these new concessions.

“The PEA is a quality study that has thoroughly incorporated all the technical investigation, field data and best industry practices necessary to make Kuska into a world-class lithium production operation,” said Hendrik van Alphen, chief executive officer for Wealth Minerals

“Given Wealth’s long experience with direct lithium extraction technology (DLE), we paid particular attention to this aspect of the PEA, incorporating an extensive selection process for the most suitable DLE equipment and technology providers.”

The company has selected a mature DLE technology to convert lithium-bearing brine into battery-grade lithium carbonate (LC).

Read more: Livent and Allkem combine to form Arcadium Lithium

Read more: Lithium South Development expands production goals, updates PEA on Hombre Muerto lithium project

Wealth Minerals spent 1.5 years selecting lithium extraction tech

Wealth Minerals spent nearly 1.5 years analyzing and selecting market-ready DLE technologies for the PEA. The final chosen technology converts lithium-bearing brine into highly pure lithium chloride concentrate. Additionally, it includes a refinement step to transform the lithium-rich eluate into high-purity lithium carbonate. This is defined as greater than 99.5 per cent LC.

The operations will undergo scaling in two phases. The initial phase involves mining operation and plant construction with a capacity of 10,000 tons per year (tpa) LCE. The company intends to follow this by doubling that capacity within two years by adding a second production module. Overall, the goal is a total of 20,000 tpa LCE at the Kuska project.

Furthermore, the preliminary plant concept incorporates process water recycling and waste treatment facilities to minimize the impact on the production area’s environment. It is assumed to maximize the use of renewable energy resource options.

The mining operation includes a well field with the necessary capacity for pumping lithium-rich brine and a reinjection feed system to return Li-depleted brine back into the salar. The combination of wells and depleted brine operations, along with DLE methods, ensures a near-zero environmental impact on the salar, preserving salar integrity and water equilibrium to the maximum extent possible.

Wealth is actively working to decarbonize its lithium production operations and has initiated investigations into utilizing renewable energy supplies to power the production plant and associated infrastructure. The company’s engineering team and consultants are targeting both solar and geothermal energy sources.

Read more: Lithium South Development updates leadership roster, appoints new director

Read more: Lithium South Development Increases Lithium Resource by 175% and begins well-drilling program at Argentina’s Hombre Muerto North

Project economics show strong return rate

The PEA estimates a pretax net present value (NPV) set at a 10 per cent discount rate of USD$1.65 billion.  This also includes an internal rate of return (IRR) of 33 per cent for the project, and an after-tax NPV10 of USD$1.15 billion with a project IRR of 28 per cent.

Wealth Minerals estimates capital expenditures for project operations at USD$749 million.  These include total administrative, direct, indirect, and contingency cost positions expected for equipment and construction. The company has also incorporated an extra USD$44 million for additional exploration works and permitting.

The company estimates operating expenses at USD$5,849 per ton LC.  These include reagents and consumables, maintenance, labour, energy, general and administrative, and transportation costs.

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