Galaxy Resources Ltd.'s updated definitive feasibility study for its Sal de Vida lithium project in northwest Argentina pegged a net present value of US$1.48 billion, discounted at 8%, a 26.9% internal rate of return and a payback period of three years.
The economics of the feasibility study were updated incorporating greater project definition, design and engineering work and taking into account the current economic conditions in Argentina.
The project will have an annual production capacity of 25,000 tonnes of lithium carbonate and 94,000 tonnes of potash, for a 40-year mine life, according to the May 15 release.
Capital cost is now estimated at US$474 million, while average operating costs to produce battery grade lithium carbonate are expected at US$3,144 per tonne after potash credits.
Average annual revenues are estimated at US$360 million and average annual operating cash flow of US$270 million.
The estimate is based on mineral reserves of 1.1 million tonnes of recoverable lithium carbonate equivalent and 4.2 million tonnes of potassium chloride.
An August 2016 definitive feasibility study for Sal de Vida indicated a posttax net present value of US$1.42 billion, at an 8% discount rate, and an internal rate of return of 34.6%.
