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Updated study for Piedmont's namesake lithium project raises value to US$1.45B

An updated scoping study for Piedmont Lithium Ltd.'s namesake lithium project in North Carolina bumped up the posttax net present value, discounted at 8%, to US$1.45 billion, with the internal rate of return lower at 34%, but with a longer 25-year mine life.

Under the previous study in 2018, NPV, discounted at 8%, stood at US$777 million, with a 56% internal rate of return and a 13-year mine life.

According to a Aug. 7 release, payback for the mine and chemical plant, based on posttax free cash flow, is pegged at approximately 2.4 years and 2.3 years, respectively.

The updated study took into account an updated resource of 27.9 million tonnes grading 1.11% lithium oxide for 309,000 tonnes of lithium oxide, a 47% increase against a maiden resource of 16.2 Mt grading 1.12% outlined in June 2018.

Piedmont will have 23 years of lithium chemical plant production life, starting in the third year of mining operations, plus two years of spodumene concentrate sales. Lithium hydroxide production from the chemical plant is pegged at 22,700 tonnes per year, with life-of-mine output at 489,000 tonnes.

Initial capital expenditure for the mine and concentrator is forecast at US$168 million, up from US$130 million in the prior study. Sustaining and deferred capital is projected at US$147.9 million.

For the chemical plant, total capex is targeted at US$344.1 million, with sustaining and deferred capital at US$86.5 million.

Steady state EBITDA for the operation is pegged at US$298 million per year, up from US$220 million per year, with steady-state after-tax cash flow ranging from US$195 million to US$260 million per year.

The Australia-listed explorer will continue phase-four drilling and expansion of its land position; secure permits and approvals for the mine/concentrator; conduct metallurgical testwork for lithium hydroxide production from spodumene concentrate and accelerate development of the proposed lithium hydroxide plant.

Further, it will enter formal talks with prospective strategic, technical and off-take partners for product from Piedmont.