NAL Asset Discussion

Not a big fan of non-specific threads as they invite so many random off the topic (but perhaps on a generally relevant topic). So only because I'm sick of having the thread topic focused on the value of EBITDA descend into the usual chaos from visitors. I'll try starting a few threads on some specifics.

This one is meant to focus on the NAL project only.

For the benefit of those new to this asset ascquisition was acquired via the bankruptcy of 2 (or 3 depending on how you count them) former operators. The asset was built by Canada Lithium (Quebec Lithium Project) over a decade ago. They set out to build the following: (and its all on the pubilc record for either Canda Lithium or RB Energy)







Pretty uncomplicated description. Even a blind man would get the picture if it were read to him. As we know, the refinery was never completed as attested to by many qualified (i.e. non HC Posters) individuals, not the least of which is Brett Lynch (MD). But I do want to draw your attention to some key figures from the PFS that was used to build the NAL complex.


"Based on the outcome of the Updated Feasibility Study, the Quebec Lithium Project has the potential to commence construction in the third quarter of 2011 and commissioning in late 2012. The Project has the potential to achieve an annual production rate of approximately 165,000 tonnes of 5.7% - 6.5% Li2O spodumene concentrate, which is upgraded to greater than 20,000tpa of 99.5% lithium carbonate, once commissioning is completed around the end of 2013."


1. Ore Capacity of concentrator = 3,800 t/d
2. 90% of concentrator capacity = 3,420 t/d
3. Lithium Recovery Rate at 67.6%. This is made up from
3a. Recovery in flotation concentrate = 80%
3b. Recovery in Li2CO3 precipitation = 84%
3c. Overall recovery then = 84% x 80% = 67% (these sourced from the PFD of 2011)
4. 165,000t/y of concentrate ... SC5.7 - SC6.5
4. Expected end product 20,000t/y of Lithium Carbonate <<< NOT 30,000t >>>


There are many ways to slice and dice this information, but for me, given our interest is in spodumene concentrate, what amount of concentrate is required to produce 20,000t/y of Li2CO3. Well that is actually a science question and there should not be much ot an argument from anyone (although I'm pretty sure we'll get a few)

So just using the standard conversion ratios of Li content we know the following are true
a) Spodumene (aka the chemcial compound LiAl(Si2O6) has the theoretical Li content of 8.03% LiO2 (Lithia) and you need 5.04 tonnes of SC8 to convert to Li2CO3 at 100% recovery rate.

b) From that SC6.0% (i.e 6.0% Lithia) which simply means 74.72% of your rocks are spodumene means you need 6.74 tonnes of SC6 to convert into one 1 tonne orf Li2CO3 at 100% recovery.

I'll stick with SC6.0 from now as that is what is in the SYQ PFS (163,266 tonnes annual Spodumene concentrate production (@ 6% Li2O))

Now this is where it gets a little interesting (as SYQ did not address the carbonate plant in the PFS released in May'22 and we'll get the good oil on that in the carbonate plant PFS in Mar'23).

If all the concentrate was exactly SC6.0 then you would need 20,000 x 6.74t of SC6 = 134,824 t/y of SC6.0 to produce 20Kt/y of Li2CO3

BUT BUT BUT the recovery factor of this (half built by CLQ but well maintained by IQ) plant is 84%. This means you need 160,504t/y of SC6.0 to produce the desired outcome of 20,000t/y of Li2CO3

So far so good right. If not, please highlight the errors in calculation or assumption so it can be corrected.

SYQ noted in their PFS that they would be feeding 1.5MT of ore (blended from NAL & Authier) to the plant with a blended LiO2 recovery factor equal to 67.7%, producing a total of 163,266 t/y of SC6. I take that to mean its all inclusive of mine dilultion and concentrate recovery, (this is on page 3 of the May'22 PFS annoucement release). Since CQ/RBE in their PFS noted the concentrate recovery at 80% that would mean mining is ~15% (as 80% of 85% = 68%).

If I only just 1 week per year for downtime then 1.5MT per year becomes ~4,200t/d ... right on the increased throughput number on SYQ PFS

Taking the RF of 67.7% into account that becomes 1,015,500 (net) tonnes of ore or 2,845 t/d (using 357 operating days)
At an avg grade 0.96% LiO2 this yields 27.312t/d of Lithia
Converting that Lithia to Spodumene becomes 341.4 t/d of Spodumene
Converting Spodument to SC6.0 lands us at 456.9 t/d SC6
Converting to annualized SC6 (at 357 days) = 163,113 t/y SC6 ... which is really really close to the SYQ PFS total of 163,266 t/y SC6

Are there any concerns here (that hopefully the NAL Mine/Concentrator DFS & Carbonate PFS address)? Well here are some things to think about:

* We spent a "Modest capex for NAL restart of approx. A$100M, with upgrades to improve operational efficiency grade, quality and recovery"

* "The NAL project will consist of a 4,200 tpd spodumene concentrator, extension of the current open pit, ore stockpiling and blending area, waste and overburden stockpiles, existing conventional tailings as well as new dry‐stack tailings facilities, mine garage, administrative buildings and other infrastructure."

* "The NAL PFS is based on an annual ore feed of circa 1.4 Mtpa to the process plant to deliver average annual output (steady state) of 168,000 tonnes annually of spodumene concentrate containing 6% Li2O. The current LOM plan is based on a multi‐stockpiles strategy (low grade, high grade and Authier) to enable optimal blending of ore."

* The PFS has assessed strategic options for development, determined an economic open pit mine operation, production schedule and site layout for the preferred option. All works completed to date form the basis for progressing to a Definitive Feasibility Study (DFS), with a further refined overall accuracy of +/‐ 15%. Sayona plans to further tighten the overall accuracy via completion of the DFS, expected later in 2022"

* "Significant capital upgrades are planned for the restart of the NAL mine and concentrator. At the concentrator, Sayona plans to replace the crusher feed, adding an ore sorter, two classification screens, 1 LIMS, 1 WHIMS, a conditioning tank and refurbish the belt filter to enhance the operation increasing the tonnage and quality of the concentrate."

So there is some inconsistency in the concentrate production (is it 163,266 t/y ot 168,000 t/y). Matters not to PLL as we have our 113,000 t/y OTA and if SYA is true to its announcment then we are due for NAL (mine/concentrate only) DFS before the year ends. Could that be a reason explaining some of the softness in SYA share price.

More concerning is, on the surface, the numbers on SYA AGM preso wrt "Abitibi Hub of 220,000 t/y of SC6 or 30,000 t/y of LCE" seem to be a stretch given what the numbers say now. In other words reverse engineer that goal for Abitibi and see how much ore needs to be processed to get that amount ... and how much is that going to cost and would the JV want to do that (because 50% of 220,000 is 110,000 and that's less than 113,000 PLL gets now). Also 30,000 t/y LCE needs 240,756 t/y of NAL blend SC6 from the calcs above - but I guess that falls within +/- 15%.

Just some things to think about that hopefully get addressed in the soon to be delivered Mine/Concentrator DFS and Carbonate PFS.

Job #1 is to get the mine restarted, the concentrator commissioned and get orderly ramp up in production and start cashing in so to speak.