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AMN - NAMIBIA: Desert Lion files positive lithium project PEA

Desert Lion Energy has filed an independent NI 43-101 technical report completed by Hatch Ltd and The MSA Group for its lithium project in Namibia. The report deals with the Preliminary Economic Assessment (PEA) for the project, which covers mining, concentrate and lithium carbonate production.

The PEA delivered positive outcomes for the project, including a cash cost of lithium carbonate of US$4080 per tonne and lepidolite (lithium) concentrate of US$141 per tonne, in each case including by-product credits.

Other outcomes include:

- Initial direct capital costs of US$275 million for mine, concentrator and lithium carbonate conversion plant, including by-product circuits (including a 15% contingency of US$43 million;

- Low capital intensity for lithium carbonate of $13,750 per annual tonne of production of battery-grade lithium carbonate;

- US$144 million pre-tax NPV (8% discount rate);

- 29% pre-tax Internal Rate of Return;

- Payback period of about 2.5 years;

- Life of Mine Revenues of US$852 million; and

- Average sales price of US$13,000 per tonne of lithium carbonate.

The PEA details the production of lepidolite (lithium) concentrate at the mine site with final processing of such concentrate into battery-grade lithium carbonate near the Port of Walvis Bay.

The vertically integrated plan encompasses the development of a mine, concentrator and lithium carbonate plant capable of producing 20,000 tonnes per year of battery-grade lithium carbonate. By-products include 35,250 tonnes of petalite concentrate per year and 290 tonnes of tantalum concentrate per year.

The development plan will continue to be assessed during the next stage of work to be completed by the company, which is planned to include further exploration results and an assessment of the lithium market conditions.

Desert Lion is focused on building Namibia’s first large-scale lithium mine about 210km from the nation’s capital of Windhoek and 220km from the Port of Walvis Bay.

The Rubicon and Helikon mines are within a 301sqkm prospective land package, with known lithium-bearing pegmatitic mineralisation.

The project site is accessible year-round by road and has access to power, water, rail, port, airport and communication infrastructure.

Desert Lion’s CEO Tim Johnston said: “Filing of the NI 43-101 technical report represents another significant milestone for Desert Lion Energy. The report culminates over 7,000 hours of exploration, engineering, test work and economic assessment as part of our plan to continue de-risking the project and develop a world-class lithium company.”

The company is in the final stages of closing a secured convertible note financing for gross proceeds of up to $10 million and a $2 million, both of which are expected to close this week.