Lithium Universe (ASX:LU7) Advances Bécancour Lithium Refinery to Funding Stage with Robust Financial Forecasts

3 min read | February 17, 2025 12:10 AM EST | By Team Kalkine Media

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Lithium Universe (ASX:LU7) Advances Bécancour Lithium Refinery to Funding Stage with Robust Financial Forecasts — Image source: shutterstock

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Highlights:

Lithium Universe (ASX:LU7) moves forward with the Bécancour Lithium Refinery project following positive DFS results.

Strong pre-tax NPV of US$718 million and 21% internal rate of return (IRR) forecasted.

The refinery, using proven technology, will contribute to North America's lithium supply and green energy goals.

Lithium Universe Ltd (ASX:LU7) has officially entered the funding stage for its Bécancour Lithium Refinery project, following the successful completion of a definitive feasibility study (DFS). The DFS, which assessed the project's economic viability, demonstrated strong financial returns and robust potential, even in a market with lower lithium prices. The company is taking a strategic approach by advancing the project during a downturn in lithium prices, positioning itself for growth when the market recovers.

The DFS revealed an impressive pre-tax net present value (NPV8) of US$718 million, with a projected internal rate of return (IRR) of 21%. The financial model also indicates that the project would break even with lithium prices as low as US$740 per tonne for spodumene concentrate (SC6) and US$14,000 per tonne for battery-grade lithium carbonate (LC). These figures are particularly significant, considering the current spot prices for SC6 and LC are below these levels, showing the project's potential to deliver strong returns under more favorable market conditions.

Lithium Universe is also confident in the project's scalability, expecting annual revenue of US$383 million and EBITDA of US$148 million. The expected operating costs stand at US$3,941 per tonne, while the estimated capital costs for the refinery are US$549 million. The company is now focusing on securing strategic funding through equity and debt advisers to support the next stage of development.

The Bécancour refinery, located in Québec, is expected to produce 18,270 tonnes of battery-grade lithium carbonate annually. This refinery will leverage the proven technology from the Jiangsu Refinery and benefit from the region’s access to green energy, potentially reducing greenhouse gas emissions by up to 95%. Lithium Universe aims to position itself as a leader in the North American lithium conversion market, bridging the lithium gap by converting spodumene into lithium carbonate for the growing electric vehicle (EV) market.

With its strong financial foundation and green energy focus, Lithium Universe is poised to make significant contributions to the lithium supply chain in North America and strengthen the region’s role as a key player in the global energy transition.

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