DFS shows that Paradox is looking hot to become a major lithium carbonate supplier to US EV market
Anson Resources has completed the Definitive Feasibility Study (DFS) for Phase 1 of its Paradox Lithium Project in the USA, and reckons it could become a major supplier of battery grade lithium carbonate in the country.
The project would initially produce 13,074 tonnes per annum for an initial 10 years of project life, and then continuing producing at lower commercial levels, if no further extraction wells were to come on-line, up to a production life of 23 years.
Phase 1 revenues are expected to be around US$5,080m mark, and the project has a compelling phase 1 pre-tax NPV of US$1,306 million, and post-commissioning payback period of 2 years and pre-tax IRR of 47%.
Direct lithium extraction a go-er
The estimated capital expenditure is US$495 million, with the lithium carbonate plant to use Sunresin patented, proven Direct Lithium Extraction (DLE) technology.
“The DFS confirms the technical and financial viability of a major new source of high purity Lithium Carbonate available for the rapidly growing US market,” Anson (ASX:ASN) executive chairman Bruce Richardson said.
“The Project delivers industry leading ESG credentials based on direct lithium extraction utilising Sunresin technology using lower energy and water consumption, and with spent brine being reinjected back into the Paradox.
Future resource upgrades could boost economics
The Phase 1 economics are based solely on the existing Indicated Mineral Resource of 239,000 tonnes, which would be updated based on future Mineral Resources upgrades.
“Significantly, there remains material upside beyond the DFS announced today based on future Mineral Resource upgrades associated with the recently completed drilling campaign at Cane Creek and the future Western Expansion drilling campaign, as well as incorporating Bromine production into stage 2,” Richardson said.
Bromide is a key component of the rapidly developing stationary energy storage battery market.
Pic: Current and Forecast EV manufacturing plants in the United States (2022).
Production targeted for 2025
Lithium is designated as a critical mineral by the United States Geological Survey (USGS) and Anson continues to receive interest from a wide range of international and US based offtake parties for lithium carbonate to be produced at the Paradox Lithium Project.
The company is targeting commencement of high-purity Lithium Carbonate production in 2025, with a Final Investment Decision expected in H1 2023.
Phase 2 development at Paradox would comprise a further substantial increase in lithium production capacity, together with Bromine production capacity, with the Phase 2 capital costs proposed to be fully funded, using free cash flow generated from Phase 1 operations.
ASN Price at posting:
39.3¢ Sentiment: Buy Disclosure: Held
