Critical Elements Announces a Positive Feasibility Study for the Rose Lithium Project Generating an After-Tax NPV at 8% of US$1.9 B and an After-Tax IRR of 82.4%
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PRESS RELEASE
Critical Elements Announces a Positive Feasibility Study for the Rose Lithium
Project Generating an After-Tax NPV at 8% of US$1.9 B and an After-Tax IRR of
82.4%
June 13th, 2022 - MONTRÉAL, QUÉBEC – Critical Elements Lithium Corporation (TSX-V: CRE) (US OTCQX:
CRECF) (FSE: F12) ("Critical Elements" or the "Corporation") is pleased to announce results of a new
Feasibility Study on the Rose Lithium-Tantalum project (“Rose” or the “Project”) in Eeyou-Istchee - James
Bay, Québec. Unless otherwise stated, all figures are quoted in American dollars (“US$”) and are reported
on a 100% equity project basis.
Highlights
Average production, Year 2 to Year 16 of 173,317 tonnes of chemical grade 5.5% spodumene
concentrate
Average production, Year 2 to Year 16 of 51,369 tonnes of technical grade 6.0% spodumene
concentrate
Average production, Year 2 to Year 16 of 441 tonnes of tantalum concentrate
Expected life of mine of 17 years
Average operating costs of US $74.48 per tonne milled, US$540 per tonne of concentrate (all
concentrate production combined)
Estimated initial capital cost $US$357 million before working capital
100% equity basis for project
Average gross margin of 68.3%
After-tax NPV of US$1,915 million (at 8% discount rate), after-tax IRR of 82.4% and average price
assumptions of US$4,039 per tonne technical grade lithium concentrate, US$1,852 per tonne
chemical grade lithium concentrate, US$130 per kg tantalum pentoxide (Ta2O5)
Anticipated construction time to start of production of 21 months
The Rose Lithium-Tantalum Project is 100% owned by Critical Elements. The Corporation’s market strategy
is to enter the lithium market with a low-risk approach. The completion of the feasibility on the spodumene
plant is the first step to enter the market and establ ish the Corporation as a reliable high quality lithium
supplier. The low-risk approach is characterized by simple open-pit mining and conventional lithium
processing technologies.
Critical Elements has consistently sought to advance the wholly owned Rose Lithium-Tantalum Project in
a low-risk manner. To this end, the Corporation has completed a new Feasibility Study with a conservative
spodumene concentrate price deck, as well as capita l and operating cost estimates reflective of current
market conditions. The new Feasibilit y Study incorporates a standard truck and shovel open-pit mining
operation and conventional lithium processing technol ogies. The Project will produce technical grade
spodumene concentrate for the glass and ceramics industry and chemical grade spodumene concentrate
for conversion for use in batteries for e-mobility, as well as a tantalite concentrate.
The mine will excavate a total of 26.3M tonnes ore grading an average of 0.87% Li2O and 138 ppm Ta2O5
after dilution. The mill will process 1.61M tonnes of ore per year to produce an annual average of 224,686
tonnes of technical and chemical grade spodumene concentrates and 441 tonnes of tantalite concentrate.
The ore is contained in several parallel and continuous shallow dipping pegmatite dykes outcropping on
surface. The ore zones are open at depth and a future underground operation is possible.
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Over the life of mine, the open pit will excavate a tota l of 182.4M tonnes of waste rock and 10.9 M tonnes
of overburden. The average strip ratio is 7.3 tonnes of waste per tonne of ore.
Table 1 Rose Key FS Results
Item Units Value
Production
Project life (from start of construction to closure) years 19
Mine life years 17
Total mill feed tonnage M t 26.3
Average mill feed grade
Li2O % Li2O 0.87
Ta2O5 ppm Ta2O5 138
Lithium Concentrate Production
% of Production, Chemical Grade % 75
% of Production, Technical Grade % 25
Mill recoveries
Li2O, Chemical Grade % 90
Li2O, Technical Grade % 87
Ta2O5 % 40
Payable
5.5% Li2O Concentrate, Chemical Grade t 2,798,000
6% Li2O Concentrate, Technical Grade t 829,000
Ta2O5 contained in concentrate kg 1,453,000
Average Commodity Prices
5.5% Li2O Concentrate, Chemical Grade US$/t conc. 1,852
6% Li2O Concentrate, Technical Grade US$/t conc. 4,039
Ta2O5 contained in concentrate
US$/kg
contained
130
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Exchange rate 1 US$ : 1.30 CAN$
0.77 US$ : 1 CAN$
Item Units Value
Project Costs CA$ US$
Average Mining Cost $/t milled 37.89 29.17
Average Milling Cost $/t milled 19.88 15.31
Average General & Administrative Cost $/t milled 20.30 15.63
Average Concentrate Transport Costs $/t milled 18.66 14.37
Project Economics CA$ US$
Gross Revenue $M 10,855 8,358
Total Selling Cost Estimate $M 236 182
Total Operating Cost Estimate $M 2,543 1,958
Total Sustaining Capital Cost
Estimate $M 160 123
Total Capital Cost Estimate $M 464 357
Duties and Taxes $M 3,098 2,386
Average Annual EBITDA $M 493 379
Pre-Tax Cash Flow $M 7,452 5,738
After-Tax Cash Flow $M 4,354 3,352
Effective Tax Rate 42%
Discount Rate* 8%
Pre-Tax Net Present Value @ 8% $M 4,368 3,363
Pre-Tax Internal Rate of Return 125.0%
Pre-Tax Payback Period years 1.0
After-Tax Net Present Value @ 8% $M 2,487 1,915
After-Tax Internal Rate of Return 82.4%
After-Tax payback period years 1.4
*Discounting starts with commercial production.
Property
The Rose property is located in northern Québec’s administrative region, on the territory of Eeyou Istchee
James Bay. It is located on Category III land, on the Traditional Lands of the Eastmain Community,
approximately 40 kilometers north of the Cree villa ge of Nemaska. The latter is located approximately
300km north-west of Chibougamau.
The Rose property is accessible by road via the Route du Nord, usable all year round from Chibougamau.
The mine site can also be reached by Matagami, via Route 109 and Route du Nord. Figure 1 shows the
regional location of the project. The project is lo cated 80 km south of Goldcorp’s Éléonore gold mine and
45 km north-west of Nemaska’s Whabouchi lithium project and 20 km south of Hydro Québec’s Eastmain
1 hydroelectricity generating plant. The Nemiscau airport services the region’s air travel needs. The Rose
property site is located 50 km by road from the Nemiscau airport.
The Rose property comprises 473 claims spread over a 24,654-ha area. Geologically, the Rose property is
located at the north-east end of the Archean Lake Superior Province of the Canadian Shield.
Over the life of mine, the open pit will excavate a tota l of 182.4M tonnes of waste rock and 10.9 M tonnes
of overburden. The average strip ratio is 7.3 tonnes of waste per tonne of ore.
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Figure 1 Rose Property Location
Reserve Estimate
A Mineral Reserve Estimate for 17 mineralized zone s was prepared during this study. The estimation
assumed the production of a chemical grade spodumene concentrate with a price of 20 US$ per kg Li 2O
and a tantalite concentrate with a price of 130 US$ per Kg of Ta2O5. The recoveries were fixed at 85% and
64% for Li and Ta respectively. The grade-recovery curve used for resource estimate, which became
available after the mineral reserves were evaluated, was verified and found to have little influence on the
reserve estimate. The production of a higher value technical grade spodumene concentrate was not
assumed in the reserve estimate.
Based on compilation status, metal price parameters, and metallurgical recovery inputs, the effective date
of the estimate is May 27, 2022.
The estimate was prepared in accordance with CI M’s standards and guidelines for reporting mineral
resources and reserves.
Table 2 displays the results of the Mineral Reserve Estimate for the Rose Project at the $36.92 NSR per
tonne cut-off for the open-pit scenario.
Table 2 Mineral Reserve Estimate
Tonnage NSR Li2O_eq Li2O Li2O Ta2O5 Ta2O5
Category (Mt) ($) (%) (%) (000 t) (ppm) (000 t)
Probable 26.3 204 0.92 0.87 193.8 138 2.3
Total 26.3 204 0.92 0.87 193.8 138 2.3
The Independent and Qualified Person for the Mineral Reserve Estimate, as defined by NI 43 -101,
is Simon Boudreau, P.Eng, of InnovExplo Inc. The effective date of the estimate is May 27, 2022.
The model includes 17 mineralized zones.
Calculations used metric units (metres, tonnes and ppm).
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The number of metric tons was rounded to the nearest thousand. Any discrepancies in the totals
are due to rounding effects. Rounding followed the recommendations in NI 43-101.
InnovExplo is not aware of any k nown environmental, permitting, legal, title-related, taxation, socio-
political, marketing or other relevant issue that could materially affect the Mineral Reserve Estimate.
Resource Estimate (“MRE”)
The current MRE is primarily based on changes m ade to the net smelter return (“NSR”) parameters,
supported by new assumptions concerning metal prices and the creation of potentially mineable shape to
constrain the MRE for the potential underground extraction scenario. No changes to the interpretation and
interpolation parameters were deem ed necessary. The mineral resource model for the current MRE is
based largely upon the model generated for the 2011 PEA.
The effective date of the estimate is May 27th, 2022, based on compilation status, metal price parameters,
metallurgical recovery inputs and creation of the constraining volume.
Given the density of the processed data, t he search ellipse criteria, the drill hole density and the specific
interpolation parameters, the QP is of the opinion that the current MRE can be classified as Indicated and
Inferred resources. The estimate was prepared in accordance with CIM’s standards and guidelines for
reporting mineral resources and reserves.
Table 3 displays the results of the MRE for the Rose Project using $31.4 NSR/t cut-off for the open-pit
potential extraction scenario and a nd $121.12 NSR cut-off for the underground potential extraction
scenario.
Table 3 Mineral Resource Estimate
The Independent and Qualified Person for the Mineral Resource Estimate, as defined by NI 43-101,
is Carl Pelletier, P.Geo., of InnovExplo Inc. The effective date of the estimate is May 27, 2022. The
MRE follow 2014 CIM Definition Standards and the 2019 CIM MRMR Best Practice Guidelines.
These Mineral Resources are not Mineral Reserves as they do not have demonstrated economic
viability.
The model includes 23 mineralized zones.
The reasonable prospect for eventual economic extraction is met by having constraining volumes
applied to any blocks (potential open -pit or underground extraction scenario) using Whittle and the
Deswik Stope Optimizer (DSO) and by the applicati on of cut-off grades. The mineral resource is
reported at a cut-off of $31.4 NSR for the op en-pit potential; and of $121.12 NSR for the
underground potential based on market conditions (metal price, exchange rate and production cost).
A range of densities was used on a per-zone basis based on statistical analysis of all available data.
A minimum true thickness of 2.0 metres was applied, using the grade of the adjacent material when
assayed or a value of zero when not assayed.
High grade capping was done on ra w assay data based on the statis tical analyses of individual
mineralized zones.
Compositing was don e on drill hole intercepts falling within mineralized zones (composite lengths
vary from 1.5 m to 3 m in order to distribute the tails adequately).
Resources were evaluated from drill holes using a 2-pass OK interpolation method in a block model
(block size = 5 m x 5 m x 5 m).
The inferred category is only defined within the ar eas where blocks were interpolated during pass 1
or pass 2 where continuity is sufficient to avoid isolated blocks being interpolated by only one drill
hole. The indicated category is onl y defined by blocks interpolated by a minimum of two drill holes
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in areas where the maximum distance to the closest drill hole composite is less than 40 metres for
blocks interpolated in pass 1.
Results are presented in-situ. The number of metr ic tons was rounded to the nearest thousand. Any
discrepancies in the totals are due to rounding effects. Rounding followed the recommendations in
NI 43-101.
The qualified persons are not aware of any know n environmental, permitting, legal, title-related,
taxation, socio-political or marketing issues, or any other relevant issue, that could materially affect
the potential development of mineral resources other than those discussed in the MRE.
Feasibility Study
The parameters used for the feasibility study are the following:
Open pit mining rate of 1,610,000 tpy
Spodumene process plant with a 4,600 tpd capacity
Mining Operation
The mineralization is hosted within outcropping pegmatite dykes subparalle l to surface. The ore body is
relatively flat, close to surface and comprised of north oriented stacked lenses. Mineralization recognized
to date on the Rose property includes rare element of Lithium-Cesium-Tantalum or LCT-type pegmatites
and molybdenum occurrences.
A conventional truck and shovel open-pit approach was considered to mine the Rose Lithium-Tantalum
Project’s Probable Mineral Reserves. The dimensions of the engineered pit design are approximately
1,620m long x 900m wide x 220m deep.
The life of mine plan (LOM) proposes to mine 26.3 Mt of ore, 182.4 Mt of waste, and 10.9 Mt of overburden
for a total of 219.6 Mt of material. The average strippi ng ratio is 7.3 tonnes of waste per tonne of ore. The
nominal production rate is estimated at 4,600 tonnes per day and 350 operating days per year.
The mining operation production rate is set to approximately 15 Mt of material per year. An open pit mining
schedule was planned and resulted in a mine life of 17 years.
Contract mining will be used for the removal of the ov erburden while Critical Elements will undertake the
mining of all hard rock material with its own equipment fleet and operators.
The main production fleet will consist of one (1) backhoe excavator, one (1) electric front shovel, one (1)
wheel loader, seven (7) haul trucks (65t), seven (7) haul trucks (135t), two (2) rotary drills, one (1) DTH drill,
two (2) bulldozers, one (1) wheel dozer, two (2) graders, one (1) auxiliary excavator, one (1) auxiliary wheel
loader, and two (2) water trucks.
The Rose project pit was designed with a 10m single benching arrangement. A 57° inter-ramp angle and
an overall pit slope angle of 55° were utilized for the ultimate pit design. A berm width of 7.0m corresponding
to the recommended overall slope angle was used. The pit slopes in overburden have a face ratio of 2.5:1
with a 10m berm width.
The main in-pit haulage ramp is designed at 30.9m wide to allow a double-lane traffic, except for the last
benches at the pit bottom that are designed at 20.4m wide for single lane traffic. A 2m drainage ditch is
included to allow for water drainage and pipe installation. The maximum gradient of the inner curvature of
all ramp segments is 10%.
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Figure 2 Rose Pit Plan View
Figure 3 Rose Pit Side View Looking West
Mineral Processing
A standard froth flotation process will be utilized to produce technica l grade and chemical grade lithium
concentrates and a tantalum concentrate. The mineral process plant will consist of crushing, beneficiation,
and dewatering areas. The technical grade lithium concentrate will grade 6.0% Li 2O while the chemical
grade lithium concentrate will grade 5.5% Li2O. The tantalum concentrate will grade 20% Ta2O5.
The beneficiation process includes crushing, grinding , magnetic separation and flotation. The crushing
circuit will consist of a jaw crus her and two (secondary and tertiary ) cone crushers, and screens. The
crushed ore will have a P80 of 13 mm and will be stockpiled in a 9,200-tonne capacity dome; this is sufficient
for approximately two days of mill operation. The grinding circuit will co nsist of a ball mill operating in a
closed circuit and a two-stage cyclone cluster. The tantalum will first be recovered at a grade of 2.0% Ta2O5
by high intensity magnetic separation then upgraded further to 20.0% Ta 2O5 by gravity separation. The
lithium flotation circuit will include removal of slimes after magnetic sepa ration followed by mica flotation,
scrubbing, and spodumene flotation to the required grade. The lithium fl otation circuit will remove slimes,
separate mica, and purify the lithium to the requir ed grade. The spodumene concentrate will then be
thickened, vacuum filtered, dried to 1% moisture, and stored in 1500-tonne silo from where it can be bulk
loaded into trucks. The tailings will be thickened, vacuum filtered to 15% moisture or less, and trucked to
the waste rock / tailings piles where it will be dry stacked.
The spodumene plant will operate 24 hours per day, 7 days per week, and 52 weeks per year. The process
plant was designed with an operating availability of 90%. The cr ushing circuit was designed using an
operating availability of 50%. The concentrator capacity has been established at a nominal throughput rate
of 4 900 dry tonnes per day. The plant has a capacity of 1,610,000 per year.
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The process plant flowsheet developed by Bumigeme Inc. is presented in Figure 4.
Figure 4 Rose Process Flowsheet
Metallurgy
Bench scale metallurgical testing was performed at ACME Metallurgical Limited in Vancouver in 2011. The
results from these tests were used for the PEA study. Three composites; the Rose (main structure), the
Rose Sud-Est (Southeast structure) and Tantalum (secondary structur e with higher tantalum and lower
lithium content) were subjected to various metallurgical tests.
SGS Canada Inc. in Lakefield conducted tests from 2013 to 2015 to improve lithium and tantalum
recoveries. In 2015 SGS Canada Inc. developed a conceptual flowsheet based on a series of bench scale
tests on various samples from the Rose deposit. The proposed flowsheet consists of conventional three-
stage crushing and single stage grinding followed by magnetic separation for the recovery of tantalum, mica
flotation, and spodumene flotation. This flowsheet was the basis of the process plant design.
SGS Canada also conducted a pilot plant program in early 2017 on two samples from the Rose project
(Rose and Rose South). The main objective of the pilot plant program was to generate spodumene
concentrate for testing in a lithium carbonate pilot plant which was conducted by Outotec in Germany and
Finland. Secondary objectives were to prove metallurgical performance on a continuous pilot scale and to
generate metallurgical and operating data for further studies. The spodumene pilot plant demonstrated the
robustness of the design process.
The Feasibility Study assumes 87.3% and 90% recovery for technical and chemical grade lithium
concentrates respectively and 40% minimum recovery for the tantalum concentrate.
Process water will be recycled releasing minima l amounts to the equalization pond and final effluent
treatment plant.