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On 23 October 2018, Global Geoscience Limited (ASX:GSC) announced the outcomes of the Pre-Feasibility Study for the 100 percent owned Rhyolite Ridge Lithium-Boron Project in Nevada, USA. Following this news, the share price of the company decreased by 4 percent as on 23 October 2018.
According to the Pre-Feasibility Study, it is expected that the project will have a long life with exceptional economic returns. The project is capable of taking full advantage of the current and future expected demand for lithium and boron raw materials over the coming decades. It is expected that the Project will be a globally significant producer of both lithium and boron and the largest lithium producer in the United States. The Pre-feasibility study is based on an open pit mining operation with the ore being processed by vat acid leaching, evaporation and crystallization to produce boric acid and lithium carbonate. The overall operation is aided by an on-site 3,500 tonne per day (tpd) sulfuric acid plant that will produce acid for leaching, steam for the evaporation and crystallization circuit, and will generate around 47 MW of power.Â
It is forecasted that the Project will produce 20,200 tpa of lithium carbonate and 173,000 tpa of boric acid. The project is capable of becoming the world lowest cost lithium producer with an estimated mine life of more than 30 years. The capital cost is estimated to be around US$599 million. The operating costs are forecast to average US$47.96/tonne processed over the life of mine and the Mining costs average US$2.07/tonne moved over the life of mine.
The PFS has forecasted strong project economies with After-tax NPV of US$1.8 billion and IRR of 27.7%. Annual steady state revenue is expected to be around US$450 million and EBITDA is expected to be around US$297 million. The initial capital expenditure is expected to be around US$426 million which includes indirect costs and contingency plus $173 million for a lump sum turnkey sulphuric acid plant. The payback period is expected to be 4.1 years from the start of the operations.
The Project is having the capacity to attract material debt financing and the company is also exploring other opportunities for the funding required to build the Project, including potential offtake partners or other strategic investors at Project level. The work program over the coming months includes the appointment of an engineering firm for the DFS, Pilot scale testing of the flowsheet aimed at confirming recovery and design parameters as well as producing samples for potential customers. As per the Companyâs Managing Director- Mr. Bernard Rowe, the boron co-product of the project will bring in sufficient revenue to cover nearly all operating costs, which will allow the project to be the lowest cost producer of lithium in the world.
In the past three months, the share price of the company decreased by 26.47 percent as on 19 October 2018. GSCâs shares traded at $0.240 with a market capitalization of circa $367.37 million as on 23 October 2018 (AEST 3:09 PM).
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