Frontier Lithium (TSXV: FL) has released the results of a definitive feasibility study for its PAK Lithium project. The study, which focuses on the mine and mill segment of the larger project, has outlined an after-tax net present value of $932 million and an IRR of 17.9% for the project, which is based on an 8% discount rate and a spodumene price of US$1,475 a tonne.
The figure is based on an operation with a life of mine of 31 years, which would produce 6.1 million tonnes of 6% lithium concentrate over its entire mine life, or about 200,000 tonnes annually.
A total of 31.1 million tonnes of ore is expected to be mined at a strip ratio of 3.7:1 under this scenario, with ore to come from both the PAK and Spark deposits. Average grades are expected to come in at 1.96% Li2O. for PAK and 1.44% Li2O for Spark. The proposed mill is expected to process 1.04 million tonnes annually with recoveries ranging from 77.5% to 77.9%.
In terms of costing, the PAK project requires initial capital of an estimated $943 million, while sustaining capital over the life of the mine is estimated at $137 million. On a per unit basis, operating expenditures are estimated at $87.0 per tonne of ore processed, while concentrate transport costs are pegged at $143 per tonne of concentrate sold.
This translates to an estimated C1 Cost of $602 per tonne of concentrate sold, with all in sustaining costs coming in at $624 per tonne, in Canadian dollars.
The study anticipates average annual earnings of $285 million under the scenario outlined. Project payback is estimated at 4.0 years.
“This DFS is a key milestone that builds the confidence to advance permitting, infrastructure, and strategic partnerships. With strong projected economics, low costs, and long-term earnings, the Project could drive self-funded future growth and support Canada’s Critical Minerals Strategy,” commented Frontier Lithium CEO Trevor Walker.
Project financing is currently being advanced, and the current permitting process is expected to be completed within the next two years. A final investment decision is expected within the next 24 months.
Frontier Lithium last traded at $0.53 on the TSX Venture.
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