Wealth Minerals Reports After-Tax NPV(10%) Of US$1.15 Billion For Kuska Lithium Project
Wealth Minerals (TSXV: WML) is reporting this morning that its Kuska Project in Ollague, Chile, has a pre-tax and pre-royalty net present value (10%) of US$1.65 billion and an IRR of 33% following the completion of a preliminary economic assessment.
The estimate is based on an operation producing 10,000 metric tonnes of lithium carbonate per year for the first two years, after which production is doubled to 20,000 metric tonnes of LCE per year, with a total life of mine of 20 years. The PEA proposes the use of direct lithium extraction tech, which will be used to convert the lithium-bearing brine into lithium chloride concentrate which is then processed into battery grade lithium carbonate.
On an after-tax basis, the net present value of the project, using a 10% discount rate, is said to come out to US$1.15 billion, with a project IRR of 28%. Notably, the estimate does not include royalty payments as the “Chilean policy regarding these matters is evolving.”
In terms of lithium pricing that the estimate is based on, an average price used was not provided. Instead, the company is said to have used a price-line over the production period based on Benchmark Mineral Intelligence’s Q4-2023 conservative case scenario.
Total capital expenditures for Kuska are estimated at US$749 million, while operating expenses are estimated at US$5,849 per tonne of lithium carbonate.
“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. 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,” commented CEO Hendrik van Alphen on the release.
The Kuska project currently has an indicated resource estimate of 741,000 tonnes lithium carbonate equivalent at 175 mg/l, along with inferred resources of 701,000 tonnes lithium carbonate equivalent.
Wealth Minerals last traded at $0.255 on the TSX Venture.
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