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Lithium Universe Ltd (ASX:LU7) has published a definitive feasibility study (DFS) for its planned Bécancour refinery in the Canadian province of Québec, noting an NPV (net present value) of around US$718 million, an IRR (internal rate of return) of approximately 21%, with payback to occur within 3.9 years.
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This was based on a price prediction of US$1,170 per tonne of spodumene concentrate (SC6) to produce a battery-grade lithium carbonate (Li2 CO3, or LC).
Currently, the spot price for the former is set at around US$775 per tonne, while the price for battery-grade lithium carbonate is US$10,680 per tonne.
According to the DFS, the operating costs for Bécancour will be approximately US$3,931/t, while the capital cost estimate is US$549 million.
In terms of revenue, Lithium Universe is predicting approximately US$383 million, and an EBITDA (earnings before interest, taxes, depreciation and amortization) of around US$148 million, with the project to break even at around US$740 /t (SC6) and around US$14,000 per tonne LC.
The company’s board has now signed off on a push ahead to the final investment decision (FID) and seeking funding for Bécancour.
Chairman Iggy Tan said the decision was based on the strength of the DFS data.
“The strong NPV and returns for the project indicate an economically viable project
and the Board has made the Financial Investment Decision (FID), and the project is now proceeding to the funding stage,” he said.
“An equity and debt adviser will be engaged to lead the funding outreach program, aimed at securing strategic partners at the project level to support project financing.
“Initial discussions with various banks and debt providers have been encouraging.”
Shares in Lithium Universe rose after the news, and at 12:28 AEDT, they were trading at 0.9 cents – a rise of 12.5% since the market opened.
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