Critical Elements and Primero Announce a Guaranteed Maximum Price for Engineering, Procurement and Construction of the Rose Phase I Spodumene Project
PRESS RELEASE
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED STATES
Critical Elements and Primero Announce a
Guaranteed Maximum Price for Engineering, Procurement and
Construction of the Rose Phase I Spodumene Project
October 23, 2019 – Montréal, Québec – Critical Elements Lithium Corporation (the
“Corporation” or “Critical Elements ”) (TSX-V: CRE) (US OTCQX: CRECF) (FSE: F12) is
pleased to announce Primero Group (“ Primero ”) has successfully completed the first phase of its
Early Contractor Involvement (“ ECI”) agreement with the Corporation, and that Primero has
provided a Guaranteed Maximum Price (“ GMP ”) for the engineering, procurement and construction
(“ EPC ”) of the Rose Lithium-Tantalum project (“ Rose ” or the “ Project ”) on a lump sum turnkey
basis that is in line with the Project’s feasibility study published November 29, 2017.
Critical Elements and Primero are in discussions to commence the second phase of the ECI
agreement (ECI Phase II – Front End Engineering Des ign) which will include initial detailed
engineering as well as determining fixed prices based on the GMP for Primero to perform all of the
work involved in completing the EPC lump sum turnke y proposal. Primero is also offering the
Corporation its EPC services as a fully integrated package if the final lump sum is within the GMP,
and if technical and commercial parameters are met during the second phase.
A summary of the ECI approach is included below:
ECI Phase I – Guaranteed Maximum Price (completed) :
o Review and assimilate all of the existing design a nd data
o Stress test and optimize the design through review s, specific value engineering
and trade-off studies
o Reconfirm quantities and pricing
o Initiate selected engineering deliverables to achi eve nominally 25% engineering
definition
o Formulate a GMP for the process plant and associat ed process supporting
infrastructure
o Submit a proposal and schedule to progress to the next phase
ECI Phase II – Front End Engineering Design (“ FEED ”):
o Progress and finalize a selected set of engineerin g deliverables to achieve
nominally 40% engineering definition
o Advance long lead and critical equipment packages to “Ready for Award” status
o Complete the contracting strategy and partnership for construction
o Optimize and reduce contingency applied to the GMP in order to formulate a
Lump Sum (the “ LS ”) cost estimate for the EPC of the process plant and
associated process infrastructure
o Submit a complete and firm proposal with schedule to Critical Elements for the
EPC-LS contract (the Corporation expects the lump sum cost estimated to be in
line with the feasibility study (Rose Lithium-Tantalum project feasibility study,
WSP, November 29, 2017))
o Execution of the EPC-LS
Operation and maintenance support throughout scope of services
“Primero is thrilled to have worked alongside the C ritical Elements team. The GMP conclusion
underscores the skills and talent the Americas team in Montréal has in cold weather and hard rock
lithium projects, coupled with the in-house expertise in Perth, giving us another great rollout. Rose
is the latest addition to Primero’s Québec lithium portfolio. We couldn’t be more pleased” , stated
Jacques Parent, General Manager of Primero Group Americas.
Jean-Sébastien Lavallée, Chairman & Chief Executive Officer of Critical Elements stated, “ We are
very pleased with Primero’s work and the team. We said it before and continue to believe they are
the industry-leader in engineering and construction of spodumene plants.”
Jean-Sebastien Lavallée (OGQ #773), geologist, shareholder, Chairman & CEO of the Corporation
and a Qualified Person under NI 43-101, has reviewed and approved the technical content of this
release.
About Critical Elements Lithium Corporation
The Corporation recently released a financial analy sis for Critical Elements’ wholly-owned Rose
Lithium Tantalum project (Rose Lithium-Tantalum pro ject feasibility study, WSP, November 29,
2017), which is based on price forecasts of US $750/tonne for chemical-grade lithium concentrate
(5% Li2O), US $1,500/tonne for technical-grade lithium concentrate (6% Li2O) and US $130/kg for
Ta2O5 in tantalite concentrate, and an exchange rate of US $0.75/CA $. The internal rate of return
(“IRR”) for the Rose Lithium-Tantalum project is estimated at 34.9% after tax, and net present value
(“NPV”) is estimated at CA $726 million at an 8% di scount rate. The estimated payback period is
2.8 years. The pre-tax IRR for the Rose Lithium-Tan talum Project is estimated at 48.2% and the
pre-tax NPV at CA $1,257 million at an 8% discount rate (see press release dated September 6,
2017). The financial analysis is based on the Indic ated mineral resource. An Indicated mineral
resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a le vel of confidence sufficient to allow the
appropriate application of technical and economic p arameters, to support mine planning and
evaluation of the economic viability of the deposit . The life-of-mine (LOM) plan provides for the
extraction of 26.8 million tonnes of ore, 182.4 mil lion tonnes of waste, and 11.0 million tonnes of
overburden for a total of 220.2 million tonnes of material. The average stripping ratio is 7.2 tonnes
per tonne of ore. The nominal production rate is es timated at 4,600 tonnes per day, with 350
operating days per year. The open pit mining schedule allows for a 17-year mine life. The mine will
produce a total of 26.8 million tonnes of ore grading an average of 0.85% Li2O and 133 ppm Ta2O5,
including dilution. The mill will process 1.61 mill ion tonnes of ore per year to produce an annual
average of 236,532 tonnes of technical and chemical grade spodumene concentrate and 429
tonnes of tantalite concentrate.
About Primero Group
Primero provides engineering design, construction and operational services to the minerals, energy
and infrastructure sectors. Primero has specialist expertise in project implementation and delivery
with a complementary service offering comprising ci vil, structural, mechanical and electrical
solutions. Primero provides these services to a div erse client base, ranging from mid-sized
companies through to international mining and energy houses.
FOR MORE INFORMATION:
Jean-Sébastien Lavallée, P.Geo.
Chief Executive Officer
819-354-5146
www.cecorp.ca
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.