International Lithium Announces Positive Preliminary Economic Assessment Results for the Mariana Lithium Brine Project, Salta, Argentina
NEWS RELEASE
International Lithium Announces Positive Preliminary
Economic Assessment Results for the Mariana Lithium Brine
Project, Salta, Argentina
Vancouver, B.C. December 6, 2018 : International Lithium Corp. (the “ Company” or “ ILC”)
(TSXV: ILC) is pleased to announce the results of a Preliminary Economic Assessment (“PEA”)
for the Mariana Lithium Brine Project located in the province of Salta, Argentina.
PEA Highlights:
• 25-year mine life producing 10,000 tonnes per year ( “TPY”) Lithium Carbonate
Equivalent (“LCE”) plus 84,000 TPY Sulphate of Potash (“SOP”).
• The estimated CAPEX and OPEX are for a conventional brine extraction facility, solar
evaporation ponds and SOP processing with a level of accuracy of -30/+50%.
• CAPEX estimated at US $243 million for 25-year mine life.
• NPV = US $192 million after-tax at 10% discount rate, IRR = 20% post-tax.
• Project results remain positive, even with important negative variations on the driver
variables, indicating project strength and resilience; thus, the PEA study indicates
Mariana’s proposed 10,000 TPY LCE concentrated brine and 84,000 TPY SOP fertilizer
operation has the potential to generate strong economic returns.
The PEA was prepared by Advisian (“Advisian”), a division of the WorleyParsons Group , for
Mariana Lithium Corp. to provide a PEA of its Mariana Lithium Brine Project in accordance with
National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). The
PEA technical report assesses the potential economic viability of developing the 14 exploration
licenses (Minas), that cover the Salar de Llullaillaco (the Salar) and surrounding area (23,560
hectares), for the purpose of extraction of lithium brine resources and processing of two
products - Lithium Carbonate Equivalent and Sulphate of Potash. All figures are quoted in US
dollars. It should be noted that the Company did not play any significant part in the production of
the PEA report, and that the conclusions are therefore those of the consultants.
Cautionary Note:
The preliminary economic assessment (PEA) is preliminary in nature, and it includes inferred
mineral resources that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized as mineral reserves,
and there is no certainty that the preliminary economic assessment will be realized . The PEA
includes the results of an economic analysis of mineral resources, and mineral resources that
are not mineral reserves do not have demonstrated economic viability.
1030 West Georgia Street, Suite 1910
Vancouver, British Columbia
V6E 2Y3, Canada
T: +1-604-449-6520
www.internationallithium.com
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Current ownership of the Mariana Project is through a joint venture company, Litio Minera
Argentina S. A., a private company registered in Argentina, owned 82.754% by Ganfeng Lithium
through its wholly-owned subsidiary, Mariana Litihium Corp. and 17.246% by ILC . In addition,
ILC has an option to acquire another 10% in the Mariana Project through a back-in right.
John Wisbey, Chairman and CEO of the Company said, “It is good finally to have received this
Preliminary Economic Assessment (PEA) showing a post-tax NPV for Mariana of over US $190
million (over CAD $250 million at current exchange rates) with net annual cashflows of US $96
million after production starts . It is significant how much the high concentration of Sulphate of
Potash is worth to the project, which is a large credit on top of the lithium revenues. Our present
share in Mariana is 17.246% and it would rise to 27.246% if we exercised our back -in right
which would currently cost us about CAD $7 million. It should be noted that the conclusions of
the PEA were prepared by Advisian based on work carried out by the project managers . The
cutoff for data supporting the PEA is March 31, 2018. The process methodology is based on the
assumption that conventional brine extraction and evaporation methods will be the only method
used for the production of lithium and potassium compounds at Mariana. It is our belief that
additional value can be created for the project by use of appropriate membrane technology
onsite in Argentina, and we will be supportive of initiatives to use this method to complement the
current plans for evaporation. Additionally we are hopeful that the estimate of 10,000 tonnes per
annum of production and a 25 -year mine life are on the conservative side, given the 1,248,000
tonnes of indicated resource and the 6 18,000 tonnes of inferred resource reported in 201 6.
Nevertheless, these solid numbers in the PEA give us great encouragement that Mariana has
been worth investing in and that, provided that Ganfeng and we can together finance the project
appropriately, it is capable of delivering a significant return to our shareholders.”
Preliminary Economic Analysis
The economic analysis of the Mariana Lithium Project (the “Project”) is based on an operating
capacity of 40,150 TPY of 4.7% lithium concentration brine and production of 84,000 TPY of
SOP fertilizer product.
To perform the Project’s economic evaluation, Advisian used a discounted cash flow (DCF)
financial model with a 10% discount rate. Capital and operating costs estimates are as shown in
the following sections. Other main inputs for this model are an assumed ramp up and production
program, and a market and pricing forecast included below.
Results of the model comprise the Project’s NPV and IRR. Table 1 presents the Project’s base
case economic analysis results.
Table 1: Economic Evaluation – Base Case Summary.
Description Units LCE SOP Total
Production tpy 10,000 84,000
Mine Life years
25
Capital Cost (CAPEX) US$
243,425,000
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Description Units LCE SOP Total
Operating Cost (OPEX) US$
46,666,000
Lithium Carbonate Refining Cost US$/t 2,900 N/A
Average Selling Price US$/t 9,683 550
Annual Revenue US$ 96,830,000 46,200,000 143,030,000
Discount Rate %
10%
Net Present Value (NPV) Pre-Tax US$
288,017,000
Internal Rate of Return (IRR) Pre-Tax %
23.7
Net Present Value (NPV) Post-Tax US$
191,670,000
Internal Rate of Return (IRR) Post-Tax %
20.0
Capital and Operating Costs
Capital expenditures are based on an operating capacity of 40,150 TPY of 4.7% lithium
concentrated brine and production of 84,000 TPY of SOP fertilizer product. Capital equipment
costs were obtained from in-house data and solicited budget price information. The estimate is
compliant to AACE Class 5 standard. Accuracy of this estimate is expected to be within a -30% /
+50% range.
Table 2: CAPEX Summary.
Area Code & Name Cost US$
1000 Brine Field 24,428,000
2000 Evaporation Ponds 87,547,000
3000 SOP Process Plant 41,742,000
4000 On Site Infrastructure & Auxiliaries 6,888,000
5000 Tailings Management Area (TMA) 4,617,000
6000 Lithium Carbonate Plant N/A
7000 Off-Site Infrastructure 22,316,000
Direct Cost Sub-Total 187,538,000
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Area Code & Name Cost US$
8000 Owner’s & Misc. Indirect Costs 18,754,000
9000 EPCM Services 15,003,000
Indirect Cost Sub-Total 33,757,000
Total Cost (Direct +Indirect) 221,295,000
Contingency (10%) 22,130,500
TOTAL 243,425,000
Table 3: Annual Operating Cost Summary.
Item № Description Cost (US$)
1 Manpower 2,052,000
2 Electrical Power 12,023,000
3 Reagents, Fuel & Consumables 14,715,000
4 Ponds Harvesting & TMA Operation 5,954,000
5 Water 531,000
6 Camp Operations & Personnel Transport 1,084,000
7 Sustaining Capital Cost 3,808,000
8 Product Transportation 3,966,000
9 Miscellaneous Direct Expenditures 662,000
10 Sub-Total 44,134,000
11 Indirect Operational Expenditures 1,870,000
TOTAL 46,666,000
Summary and Conclusions
• The technical solutions included in the PEA technical report are standard, time
proven designs for main operating facilities. This approach provides a solid,
workable base case to which other design alternatives can be related and
compared.
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• Advisian has estimated CAPEX and OPEX for a conventional brine extraction
facility, solar evaporation ponds and SOP processing with a level of accuracy of -
30/+50%, including equipment, materials, indirect costs and contingencies during
the construction period, is estimated to be US $243.4 million.
• The Project economic analysis indicates that, for the base case, the After Tax (AT)
NPV (10%) is US $191.7 million and IRR is 20.0%.
• Project results remain positive, even with important negative variations on the
driver variables, indicating project strength and resilience; thus, the PEA study
completed by Advisian indicates the Project’s proposed 10,000 TPY LCE
concentrated brine and 84,000 TPY SOP fertilizer operation has the potential to
generate strong economic returns.
An NI 43 -101 technical report is required to be filed, in conjunction with the disclosure of the
PEA in this news release, within 45 days.
Afzaal Pirzada, P. Geo., a Qualified Person as defined by NI 43-101 and a consultant to the
Company, has reviewed and approved the all disclosure of scientific or technical information in
this news release.
About International Lithium Corp.
International Lithium Corp. has a significant portfolio of projects, strong management, and a
strategic partner and key investor, Jiangxi Ganfeng Lithium Co. Ltd., (“ Ganfeng Lithium ”) a
leading China-based lithium product manufacturer.
The Company’s primary strategic focus is now on the Mariana project in Argentina and on the
Raleigh Lake project in Canada.
The Company has a strategic stake in the Mariana lithium -potash brine project located within
the renowned South American “Lithium Belt” that is the host to the vast majority of global lithium
resources, reserves and production. The Mariana project strategically encompasses an entire
mineral rich evaporite basin, tota lling 160 square kilometres that ranks as one of the more
prospective salars or ‘salt lakes’ in the region. Current ownership of the project is through a joint
venture company, Litio Minera Argentina S. A., a pri vate company registered in Argentina,
owned 82.754% by Ganfeng Lithium and 17.246% by ILC . In addition, ILC has an option to
acquire 10% in the Mariana project through a back-in right.
The Raleigh Lake project, now consisting of 3,027 hectares of adjoinin g mineral claims in
Ontario, is now regarded by ILC management as ILC’s most significant project in Canada. It
is 100% owned by ILC, is not subject to any encumbrances, and is royalty free.
Complementing the Company’s lithium brine project at Mariana and rare metal pegmatite
property at Ra leigh Lake, are interests in two other rare metal pegmatite properties in Ontario,
Canada known as the Mavis Lake and Forgan Lake projects, and the Avalonia project in
Ireland, which encompasses an extensive 50-km-long pegmatite belt.
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The ownership of the Mavis Lake project is now 51% Pioneer Resources Limited (ASX:PIO,
“Pioneer”) and 49% ILC. In addition, ILC owns a 1.5% NSR on Mavis Lake. Pioneer has an
option to earn an additional 29% by sole -funding a further CAD $8.5 million expenditures of
exploration activities, at which time the ownership will be 80% Pioneer and 20% ILC.
The Forgan Lake project will, upon Ultra Lithium meeting its contractual requirements
pursuant to its agreement with ILC, become 100% owned by Ultra Lithium (TSXV: ULI), and
ILC will retain a 1.5% NSR on Forgan Lake.
The ownership of the Avalonia project is currently 55% Ganfeng Lithum and 45% ILC.
Ganfeng Lithium has an option to earn an additional 24% by either incurring CAD $10
million expenditures on exploration ac tivities or delivering a positive feasibility study on the
project, at which time the ownership will be 79% Ganfeng Lithum and 21% ILC.
With the increasing demand for high tech rechargeable batteries used in electric vehicles
and electrical storage as well as portable electronics, lithium has been designated “the new
oil”, and is a key part of a “green tech”, sustainable economy. By positioning itself with solid
strategic partners and projects with significant resource potential, ILC aims to be one of the
lithium and battery metals resource developers of choice for investors and to continue to
build value for its shareholders.
International Lithium Corp.’s mission is to find, explore and develop projects that have the
potential to become world class lithiu m, potash and rare metal deposits. A key goal is to
become a well funded company to turn that aspiration into reality.
On behalf of the Company,
John Wisbey
Chairman and CEO
www.internationallithium.com
For further information concerning this news release please contact +1 604-449-6520
Neither 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.
Cautionary Statement Regarding Forward-Looking Information
Except for statements of historical fact, this news release contains certain “forward -looking
information” within the meaning of applicable securities law. Forward -looking information or
forward-looking statements in this or other news releases may include: the effect of results of
the preliminary economic assessment of the Mariana Joint Venture Project, timing of publication
of the PEA technical report, anticipated production rates, the timing and/or anticipated results of
drilling on the Raleigh Lake or Mavis Lake projects, the expectation of feasibility studies, lithium
recoveries, modeling of capital and operating costs, results of studies utilizing membrane
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technology at the Mariana Project, budgeted expenditures and planned exploration work on the
Avalonia J oint Venture, satisfactory completion of the sale of mineral rights at Forgan Lake ,
satisfactory completion of the purchase of additional mineral rights at Raleigh Lake , increased
value of shareholder investments, and continued agreement between the Company and Jiangxi
Ganfeng Lithium Co. Ltd. regarding the Company’s percentage interest in the Mariana project.
Such forward-looking information is based on a number of assumptions and subject to a variety
of risks and uncertainties, including but not lim ited to those discussed in the sections entitled
“Risks” and “Forward-Looking Statements” in the interim and annual Management’s Discussion
and Analysis which are available at www.sedar.com. While management believes that the
assumptions made are reasonable, there can be no assurance that forward -looking statements
will prove to be accurate . Should one or more of the risks, uncertainties or other factors
materialize, or should underlying assumptions prove incorrect, actual results may vary materially
from those described in forward-looking information. Forward-looking information herein, and all
subsequent written and oral forward -looking information are based on expectations, estimates
and opinions of management on the dates they are made that, while considered reasonable by
the Company as of the time of such statements, are subject to significant business, economic
and competitive uncertainties and contingencies. These estimates and assumptions may prove
to be incorrect and are expressly qualified in their entirety by this cautionary statement. Except
as required by law, the Company assumes no obligation to update forward -looking information
should circumstances or management’s estimates or opinions change.