International Lithium: PEA for the Raleigh Lake Lithium Project Outlines Highly Favourable After-Tax NPV (Discounted at 8%) of CAD$342.9 million and After-Tax IRR of 44.3% P.A.
International Lithium: PEA for the Raleigh
Lake Lithium Project Outlines Highly
Favourable After-Tax NPV (Discounted at 8%)
of CAD$342.9 million and After-Tax IRR of
44.3% P.A.
Vancouver, British Columbia--(Newsfile Corp. - December 4, 2023) - International Lithium Corp. (TSXV:
ILC) (OTCQB: ILHMF) (FSE: IAH) (the "
Company
" or "
ILC
") is pleased to announce a positive
Preliminary Economic Assessment ("PEA") for a proposed lithium mining operation to produce
spodumene concentrate at Raleigh Lake, 25 kilometres west of Ignace, Ontario. The PEA relies on
recent metallurgical test work (Phase 1) which indicates that a spodumene concentrate containing 6%
Li
2
O ("SC6") can be produced using a simple crushing circuit and heavy liquid separation techniques. In
the Phase 1 tests lithium recoveries were above 81% while iron oxide content remained within
acceptable limits. As originally foreshadowed, the very near proximity of Raleigh Lake to existing service
infrastructure along the Trans-Canada Highway corridor affords significant logistical and economic
advantages to the project.
This PEA only considers spodumene concentrate, i.e. lithium, as a revenue source. The Company
continues to investigate the potential value associated with the extraction of rubidium from the microcline
zone within the spodumene deposit.
PEA Highlights
Economics (discounted at 8% p.a., CAD$)
Pre-tax Cashflow = CAD$709.4 million, NPV = CAD$385.1 million, IRR = 46.5% p.a.
After-tax Cashflow = CAD$634.0 million, NPV = CAD$342.9 million, IRR = 44.3% p.a.
Price assumptions: CAD$3,139/tonne for 6% Li
2
O concentrate (USD$2,325/tonne)
CAPEX/OPEX
Total pre-production capital costs: CAD$111.9 million
Total sustaining capital: CAD$17.5 million
Total life of mine ("LoM") operating costs: CAD$381 million (including concentrate transport)
Average operating costs: CAD$94.38/tonne milled, CAD$993/tonne SC6
Mining Method
Traditional open pit drilling and blasting followed by load and haul
The plant feed production rate is proposed to be 540,000 tonnes per year ("tpy")
This LoM mine plan is proposed to mine 57 million tonnes ("Mt") of material over the mine life,
which will be comprised of 4Mt of mill feed and 53Mt of waste with an average strip ratio of 13.2:1
Life of mine is forecast at nine years; project duration is 11 years
Process Plant
The base case process plant is designed to crush 1,500 tonnes per day ("tpd") and process 1,500
tpd in a dense media separation ("DMS") plant to produce a nominal 56,000 tpy of 6% Li
2
O at
81% recovery
Process engineering and design were developed to a scoping level based on the results of the
SGS laboratory testing. The SGS lab tests obtained 22.9 weight percentages of 6% Lithium
Concentrate and estimated 81% lithium recovery
A design factor of 10% is applied on nominal requirements to ensure that the process equipment
has enough capacity to take care of the expected feed variation
Total production for LoM is 414,904 tonnes of 6% Li
2
O spodumene concentrate ("SC6")
Raleigh Lake is 100% owned by ILC and there are no overriding royalties. The Company's vision for
Raleigh Lake is a low-risk, low-impact, small-scale mining operation that can begin to provide critical
minerals necessary to fulfil Canada's Critical Mineral Strategy in a shorter time frame than would be
required for a much larger scale, longer duration and more remotely located project. Revenues from the
mine production would continue to feed back into exploration work to expand ILC's drive to become a
significant Critical Minerals supplier in North America.
Executive Comment
John Wisbey, Chairman and CEO of ILC
commented:
"It is very pleasing for ILC to have delivered its first PEA at Raleigh Lake, Ontario with highly respectable
numbers of CAD$385.1 million pre-tax NPV and 46.5% IRR (post-tax CAD$342.9 million and 44.3%
IRR) despite the significant fall in the lithium price this year. This reflects, to a considerable extent, our
good access to infrastructure at Raleigh Lake, which has a very beneficial effect on our projected costs.
It should be noted that this PEA only relates to the 600 hectare Zone 1 out of our 48,500 hectares of
claims at Raleigh Lake. It is also important to note that at this stage these numbers only relate to the
lithium at Raleigh Lake and not to the separately declared rubidium resource. Given the high market
price of rubidium, this leaves appreciable upside.
This year's fall in the lithium price has of course depressed these numbers versus what they would have
been only a few months ago. For example, a major Canadian lithium company produced a feasibility
report in August 2023, using a price assumption of USD$ 4,699 (CAD$6,109) per tonne for 6%
spodumene concentrate. Had we applied this same number to the spreadsheet that ERM have used for
ILC's PEA, our own NPV would have been CAD$1,137 million pre-tax and CAD$906 million post-tax.
These numbers are more than 2.6 times the NPV numbers that we are now reporting. Of course, what
this means is that, as for every mining company, there is a high level of operational gearing in our
business. It is also very important that, when comparing different companies in the sector, investors and
analysts compare like price assumptions with like.
The omission of rubidium from this initial PEA reflects the fact that we and our consultants need to do
more work on the real size of the rubidium market. Our measured and indicated contained tonnes of
rubidium at Raleigh Lake are 822 tonnes and the inferred 521 tonnes. The market price for >99%
rubidium carbonate as at end November 2023 was USD$ 1,159.38 per kg, meaning USD$ 1.16 million
per tonne. However, if world annual demand for rubidium is and remains much smaller than our resource
there, our ability in future to sell at the rate we can produce would be affected, as could the market price."
PEA Summary
Environmental Resource Management ("ERM") was retained by International Lithium Corp. ("ILC" or the
"Company") to prepare a Preliminary Economic Assessment ("PEA") in accordance with National
Instrument 43-101 (NI 43-101) for the Raleigh Lake Project (the "Project") located near Ignace, Ontario,
Canada.
The Raleigh Lake Project is roughly 25 kilometres west of Ignace and 235 kilometres west of Thunder
Bay in the northwestern part of Ontario within the Kenora Mining District. It is adjacent to the Trans-
Canada Highway (Hwy 17) with CN Rail, TC Energy natural gas pipeline and Hydro One 235kV power
lines transcending the Property. It is owned 100% by International Lithium Canada Ltd., a 100% owned
subsidiary of ILC. There are no royalties or other encumbrances on the Property.
ILC identified the opportunity at Raleigh Lake in 2016 but did not begin actively pursuing work on the
project until 2021 when an initial test drilling campaign was conducted along with regional
lithogeochemical sampling. In 2022 the Company completed sufficient drilling to define a maiden
Mineral Resource Estimate ("MRE") with resources reported in the measured, indicated, and inferred
categories (see below and Company press releases dated March 1 and April 13, 2023). Upon analyzing
the MRE the Company embarked upon some initial metallurgical and economic studies that culminated
in the results presented here. It is the Company's opinion that the results to date provide a good basis to
pursue a mining operation at Raleigh Lake and such an operation can be considered low impact due to
the existence of well-developed and utilized infrastructure and the path to environmental permitting and
eventual production would be shorter than if the project were to be more remotely located. The entire
operation could be significantly more sustainable than remote operations and have direct economic
benefits for the nearby and surrounding communities.
The proposed open pit mining operation would extract 57Mt of material over the mine life, which will be
comprised of 4Mt of mill feed and 53Mt of waste with an average strip ratio of 13.2:1. The proposed
PEA level mine plan is based around work at a proposed plant feed production rate of 540,000 tpy
producing a total of 414,904 tonnes of SC6 concentrate over the mine life. The average mill feed grade
is 0.70% Li
2
O (Table 1).
Table 1: Summary of Base Case Cash Flow Modelling and Project Financial Analysis.
Parameter
Value
Unit
Project Schedule
Overall project life
11
years
Mine life
9
years
Mining, Processing and Economic Parameters
Total mill feed
4.4
Mt
Average mill feed grade
0.70
% Li
2
O
Open pit mining rate
1,500
tpd
Process recovery
81.0
%
Total concentrate produced - 6% TG Li
2
O
414,904
T
Commodity price - 6% TG Li
2
O
$2,325
USD/t
Exchange Rate
1.35
CAD/USD
A summary of the base case capital and operating costs calculated and used in the economic analysis
exercise is shown in Table 2 below. Total costs are based on unit cost rates per tonne mill feed
multiplied by the total tonnes of mill feed (4.37Mt).
Table 2: Summary of Base Case Capital and Operating Costs.
Parameter
Value
Unit
Unit Operating Costs -Production Phase
Mining
CAD$3.55
/t mined
Mining
CAD$40.98
/t mill feed
Milling
CAD$28.53
/t mill feed
G & A
CAD$17.74
/t mill feed
Concentrate transportation
CAD$7.13
/t mill feed
Total
CAD$94.38
/t mill feed
Project Operating and Sustaining Capital Costs
Total operating costs
CAD$381.0 million
Total sustaining capital costs
CAD$17.5 million
All operating and capital costs
CAD$398.6 million
A summary of the base case revenues used in the economic analysis exercise is shown in Table 3 and a
summary of the pre- and post-tax economic analysis results is shown in Table 4.
Table 3: Summary of Base Case Revenues.
Parameter
Value
Project Revenue, Profit and Pre/Post Tax Cash Flows
Concentrate sales revenue
CAD$1,302.3 million
Concentrate transportation costs
CAD$31.1 million
Net operating revenue
CAD$1,271.2 million
Operating and sustaining capital costs
CAD$398.6 million
EBITDA
CAD$872.6 million
Payable taxes
CAD$75.5 million
Net profit after taxes (NPAT)
CAD$797.1 million
Total pre-production capital costs
CAD$163.1 million
Table 4: Summary of Pre- and Post-tax Economic Analysis Results.
Parameter
Value
Unit
Economic Analysis Results
Discount Rate
8.0
% p.a.
Pre-Tax Cashflow
$709.5
CAD$ million
Pre-Tax NPV
$385.1
CAD$ million
Pre-Tax IRR
46.5
% p.a.
Post-Tax Cashflow
$634.0
CAD$ million
Post-Tax NPV
$342.9
CAD$ million
Post-Tax IRR
44.3
% p.a
Resource Estimate
The MRE for the Raleigh Lake project that the current PEA study was based on was produced by
Nordmin Engineering Ltd. ("Nordmin"), based in Thunder Bay, Ontario, who prepared an independent
lithium (spodumene-hosted) and rubidium (microcline-hosted) MRE for the Project and Technical Report,
"NI 43-101 TECHNICAL REPORT AND MINERAL RESOURCE ESTIMATE FOR THE RALEIGH LAKE
LITHIUM PROJECT, IGNACE, ONTARIO" (the " MRE Report") consistent with the standards and
guidelines set out by the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") and in
accordance with National Instrument 43-101 -
Standards of Disclosure for Mineral Projects
.
In preparation of the MRE and MRE Report, Nordmin applied processes that were appropriate for
lithium pegmatite-style deposits. The Report is available on SEDAR. The effective date for the Report
was April 13, 2023.
Detailed summaries of the MRE Report can be found in Company news releases dated March 1 and
April 13, 2023. A tabulated listing of the MRE for both lithium in spodumene and rubidium in microcline is
given in Table 5 and Table 6 respectively.
Table 5: Lithium Open Pit and Underground MRE.
Area
Resource Category
Mass (kt)
Grade
Contained
Li (t)
Li (ppm)
Li
2
O (%)
Li (t)
Open Pit
650ppm
Li Cut-off
Measured
80
3,887
0.84%
313
Indicated
2,021
2,919
0.63%
5,897
Measured + Indicated
2,101
2,956
0.64%
6,210
Inferred
3,247
2,595
0.56%
8,427
Underground
2,000ppm
Li Cut-off
Measured
3
2,560
0.55%
8
Indicated
189
3,203
0.69%
606
Measured + Indicated
192
3,192
0.69%
614
Inferred
655
3,162
0.68%
2,073
Total
Measured + Indicated
2,293
2,976
0.64%
6,824
Inferred
3,902
2,691
0.58%
10,499
Refer to notes on Mineral Resources below.
Table 6: Rubidium Open Pit and Underground MRE.
Area
Resource Category
Mass (kt)
Grade
Contained
Rb (t)
Rb (ppm)
Rb
2
O (%)
Open Pit
4,000ppm
Rb Cut-off
Measured
5
5,412
0.59%
29
Indicated
90
6,073
0.66%
547
Measured + Indicated
95
6,036
0.66%
576
Inferred
18
3,005
0.33%
53
Underground
4,000ppm
Rb Cut-off
Measured
5
6,547
0.72%
35
Indicated
33
6,474
0.71%
211
Measured + Indicated
38
6,484
0.71%
246
Inferred
106
4,427
0.48%
468
Total
Measured + Indicated
133
6,163
0.67%
822
Inferred
123
4,224
0.46%
521
Refer to notes on Mineral Resources below.
Notes on Mineral Resources
1
.
The MRE was prepared by Christian Ballard, P.Geo., of Nordmin, who is the Qualified Person
("QP") as defined by NI 43-101 and is independent of ILC.
2
.
Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability.
The above Inferred Mineral Resources are subject to potential upgrade to Indicated and Measured
Mineral Resources with continued drilling. There is no guarantee that any part of the Mineral
Resources discussed herein will be converted to another category or to a Mineral Reserve in the
future. The estimate of Mineral Resources may be materially affected by environmental, permitting,
legal, marketing, or other relevant issues.
3
.
The Mineral Resources in this report were estimated using the Canadian Institute of Mining,
Metallurgy and Petroleum standards on Mineral Resources and reserves, definitions, and
guidelines prepared by the CIM standing committee on reserve definitions and adopted by the CIM
council (CIM 2014 and 2019).
4
.
The MRE is developed with data from diamond drill holes totaling 13,821 m.
5
.
The pit constrained mineral resources were defined using a parented block model, within an
optimized pit shell with average pit slope angles of 45° in rock and 30° in overburden, a 9.8 strip
ratio (waste material: mineralized material) and a revenue factor of 1.0. The pit optimization shells
were created using Deswik.AdvOPM software.
6
.
The lithium resource pit optimization parameters include: 5.5% Li
2
O spodumene concentrate;
US$1,800 Li
2
O spodumene concentrate price; exchange rate of CAD$1.30/USD$1; concentrate
transportation and offsite charges of CAD$175/t, mining cost of CAD$6/t, processing plus general
and administration cost of CAD$41/t; and a process recovery of 75%. Only lithium value was used
to generate the resource optimized pit shell.
7
.
Underground constrained mineral resources were defined within 5 x 5 x 5 m minable shape
optimization wireframes. The mineable shape optimization constraining wireframes were created
using Deswik.SO software.
8
.
The lithium resource underground minable shape optimization parameters include: 5.5% Li
2
O
spodumene concentrate; US$1,800 Li
2
O spodumene concentrate price; exchange rate of CAD
1.30/USD 1; concentrate transportation and offsite charges of CAD$175/t, mining cost of
CAD$80/t, processing plus general and administration cost of CAD$50/t; and a process recovery
of 75%.
9
.
The rubidium resource was constrained above market value due to the current limited world
market. A 4,000 ppm rubidium cut-off grade was selected. The rubidium resource was excluded
from (i.e. neither taken into account nor used as a credit for) the underground and open pit lithium
resource.
10
.
A default density of 2.668 g/cm3 was used for the mineralized zones.
11
.
All figures are rounded to reflect the relative accuracy of the estimates; totals may not add
correctly.
12
.
The effective date of the MRE was February 16, 2023. The effective date for the MRE Report was
April 13, 2023, and is available on SEDAR.
Preliminary Economic Assessment
The Project:
Is 100% owned by ILC and is not subject to any off-take agreements, partnerships, or royalties.
Consists of 48,500 hectares (485 square kilometres) of adjoining mineral claims.
Is located approximately 25 kilometres west of the Township of Ignace, Ontario.
Distinguishes itself from other lithium projects in Canada by being very well situated near to major
public infrastructure, including:
The Trans-Canada Highway, with direct access to Thunder Bay on Lake Superior, is less
than six kilometers north of the Project;
The Canadian Pacific Railway, natural gas pipelines, and Hydro One power transmission
lines (115 and 230 kV) are just a few kilometres from the Project.
Figure 1: Major public infrastructure relative to the Raleigh Lake project.
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/3232/189765_6cc313dab4895b6e_003full.jpg
Mining Methods
The mining method selected for this project will use traditional open pit drilling and blasting followed by
load and haul. The primary mining production will be executed using hydraulic excavators, front shovels,
and/or wheel loaders as appropriate to the terrain and depending on the major production equipment
available for the project. The material will be hauled from the bench to the crusher, ROM stockpiles or
waste dump depending on the material type. Furthermore, ancillary equipment, such as bulldozers,
graders, and a range of vehicles, is employed to perform functions related to maintenance, support,
services, and utilities.
The proposed PEA level mine plan is based around work at a proposed plant feed production rate of
540,000 tpy.
This LoM mine plan is proposed to mine 57Mt of material over the mine life, which will be comprised of
4Mt of mill feed and 53Mt of waste with an average strip ratio of 13.2:1 (Table 7).
The open pit created for the Raleigh Lake deposit covers about 800 metres in length and 450 metres in
width at the surface (Figure 2). The pit's lowest point extends to a depth of 330 metres above sea level,
while the entrance to the pit is positioned at 475 metres above sea level. The pit incorporates two
entrance ramps, with the first granting access to the southern section of the pit and the second facilitating
entry to the northern part.
The approach selected for the storage of tailings generated at the concentrator and the waste rock from
the mine will be co-disposal. This co-disposal method involves containing filtered tailings within
designated waste rock cells. This approach offers the benefit of enhancing overall stockpile stability and
the efficiency of water drainage. The primary goal is to guarantee long-term physical and geochemical
stability.
Figure 2: General arrangement of the mine site layout for Raleigh Lake showing the final open pit (right)
and co-disposal facility (left).
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/3232/189765_6cc313dab4895b6e_004full.jpg
Table 7: Proposed mine production schedule for Raleigh Lake.
Project Year
-1
1
2
3
4
5
6
7
8
9
Total
Mill Feed (tonnes)
54,037
324,183
539,881
540,107
539,899
539,895
540,305
539,713
540,312
208,721
4,367,053
Measured (tonnes)
0
0
5,566
0
6,338
27,854
0
8,927
23,584
2,725
74,994
Indicated (tonnes)
20,659
112,928
365,731
298,367
265,030
250,939
41,048
152,832
278,257
115,990
1,901,781
Inferred (tonnes)
33,378
211,254
168,584
241,741
268,531
261,103
499,257
377,954
238,471
90,005
2,390,278
Grade Li
2
O (%)
0.67
0.67
0.71
0.94
0.83
0.79
0.49
0.54
0.68
0.65
0.70
Measured (Li
2
O%)
0.00
0.00
0.30
0.00
0.63
1.19
0.00
1.13
0.78
0.66
0.92
Indicated (Li
2
O%)
0.47
0.51
0.70
0.93
0.67
0.75
0.47
0.63
0.67
0.58
0.70
Inferred (Li
2
O%)
0.79
0.75
0.75
0.94
0.99
0.79
0.49
0.48
0.68
0.75
0.70
Waste (tonnes)
7,572,425
8,641,731
8,930,422
9,147,177
8,855,024
4,651,476
2,979,449
1,530,607
864,285
509,626
53,682,222
Concentrate
(tonnes)
0
34,194
51,828
68,321
60,532
57,726
35,668
38,988
49,323
18,324
414,904
Mineral Processing
The Raleigh Lake Orebody contains two metallurgical domains, the lithium spodumene domain and the
rubidium microcline domain. These two separate domains represent zones in the Raleigh Lake orebody
that require customized process flowsheets to be developed for each zone. For the lithium domain, the
objective is the recovery of spodumene to 6% Li
2
O concentrate grade, while the rubidium bearing
microcline domain objective is to develop a flowsheet for extraction of the rubidium from the microcline.
The current focus was to perform mineralogy and mineral processing testing to develop the flowsheet for
the lithium zone (Li-Head) and do a literature review to begin to investigate the flowsheet development of
the rubidium zone (Rb Head). Samples of the lithium and rubidium domains were sent to SGS Canada
in August of 2023, to perform phase one mineralogy tests with follow-up mineral processing testing and