Surge Battery Metals (TSXV: NILI) has released a prefeasibility study for its Nevada North lithium project, outlining an after-tax net present value of US$9.81 billion, alongside an IRR of 23.6%, using an 8% discount rate.
The economics assume a long term lithium carbonate price of US$24,000 per tonne, the same as the 2025 preliminary economic assessment. Payback is estimated at 4.2 years from the start of production.
The study outlines an open pit, free-digging claystone operation feeding an on site plant that would produce battery grade lithium carbonate over a 42 year mine life. Development is split into 2 phases. Phase 1 builds a plant with design capacity of 55,900 tonnes per year, while Phase 2 doubles processing capacity to 111,400 tonnes a year.
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Output averages roughly 92,250 tonnes of lithium carbonate annually over the life of mine. That rises to 105,000 tonnes between years 4 and 14, with production peaking near 111,400 tonnes in year 7. Total life-of-mine production is estimated at 3.87 million tonnes, with overall recovery of 84.9%.
The mine plan is based on proven and probable reserves of 218.3 million tonnes grading 3,928 ppm lithium, containing 4.56 million tonnes of lithium carbonate equivalent, with a strip ratio of 0.88:1.
Phase 1 initial capital comes to US$2.77 billion, including US$442 million in contingency, about 7% below the PEA estimate. Phase 2 expansion capital is set at US$2.35 billion, much of it scheduled to be funded from Phase 1 cash flow. Life of mine sustaining capital totals US$1.65 billion.
Cash operating costs average US$4,719 per tonne of lithium carbonate, down 10% from the PEA. Processing accounts for 83% of that figure, while reagent procurement and logistics make up about 64% of total operating costs.
The NPV holds up under a weaker price environment, falling to roughly US$4.6 billion with lithium carbonate 30% lower at US$16,800 per tonne.
“The PFS demonstrates that the NNLP can become a competitive source of domestic lithium production for America’s growing battery industry,” said Greg Reimer, president and CEO of Surge.
The joint venture, owned 67.5% by Surge and 32.5% by Evolution Mining, plans to move directly into FEL 3 engineering and a feasibility study beginning in the fourth quarter of 2026. First production is targeted for the second half of 2031, subject to permitting, financing and a final investment decision.
Surge Battery Metals last traded at $0.73 on the TSX Venture.
