The Rhyolite Ridge Definitive Feasibility Study (DFS) was completed in April 2020. The DFS places the Project as the single most attractive project for the economic production of lithium carbonate, lithium hydroxide and boric acid globally. In addition, the analysis confirms ioneer's position as the lowest cost lithium producer globally with an estimated all in sustaining cash cost to produce battery grade lithium hydroxide of $2,5101 per metric tonne net of boric acid revenue.
The DFS confirms that the Project has a stable overall operating cost structure for the production of lithium carbonate and battery-grade lithium hydroxide due to the scale and reliability of its boric acid credit. The extensive bench and pilot scale tests conducted by Fluor, Kemetco Research and Kappes Cassiday, with support from Veolia and FLSmidth, has proven highly successful with excellent recoveries, the innovative use of proven processing technologies, and the production of high purity lithium and boric acid products.
The Company's engineering partner, Fluor, has further developed and refined Project plans in the DFS to a 30% engineering complete level. The refinement of the DFS as compared to the PFS is substantial, and helps ensure predictable, sustainable, and low operating costs over the life of the Project. An important addition to the prior scope is the upfront inclusion of a steam turbine for power generation, which will provide the entire operation enough energy to be fully self-sufficient.
The DFS estimates that the total capital expenditure to complete the Project will be US$785 million including an 8% contingency. This represents an increase of US$186 million from the PFS, with nearly half of the increase in scope being driven by the inclusion of an on-site steam turbine, the purchase versus lease of the mining fleet, and the purchase of sulphur tankers to materially lower sulphur transportation costs. All of these decisions were made following detailed analysis of the options (trade-off studies) and have positive impacts to the overall Project economics.
The lithium and boron Mineral Resource is estimated at 146.5 million metric tonnes, including an Ore Reserve of 60.0 million metric tonnes, an increase in the Reserve from the previous estimate of 280% over the 26-year mine life. The mine plan is made up almost entirely of Reserve material and of that, nearly 50% is proven Ore Reserve. The resource remains open in three directions allowing for a potential extension to the life of the mine. Future exploration drilling will initially target the extensions of high-grade ore to the south, where it is expected to be increasingly shallow with positive impact on the mine plan.
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