Lithium Chile Delivers Positive Preliminary Economic Assessment FOR the Arizaro Project IN Argentina
LITHIUM CHILE DELIVERS POSITIVE PRELIMINARY ECONOMIC ASSESSMENT FOR
THE ARIZARO PROJECT IN ARGENTINA
TSX Venture Exchange: LITH For Immediate Release
OTC-QB: LTMCF
CALGARY, ALBERTA, August 8, 2023 – Lithium Chile Inc. (“Lithium Chile” or the “Company”) is pleased to
report the results of its Preliminary Economic Assessment (“PEA”) for the production of lithium carbonate
from its Salar de Arizaro lithium brine project in the Salta Province of Argentina (“ Arizaro”). The PEA
provides an independent econo mic assessment of the potential of Arizaro, based upon the lithium
resources outlined in the July 2023 Resource Estimate.
ARIZARO PEA HIGHLIGHTS:
• Pre-tax Net Present Value (“NPV”)8% US$1.8 billion
• LOM Average Li2CO3 price of $21.396 per tonne
• After-tax NPV8% $1.1 billion
• Pre-tax Internal Rate of Return (“IRR”) of 29.3%
• After-tax IRR of 24.1%
• PEA mine and processing plant produces 25,000 LCE LOM over 19.1 years.
• Pre-tax initial capital payback period 3.5 years; after-tax payback 3.6 years
• Average LOM annual pre-tax cash flow over operating period: $329 million; annual after-tax
cash flow: $229 million.
• Initial Capital Costs (“Capex”) estimated at $823 million.
• Operating cost (“Opex”) estimated at $5,197/t LCE.
The PEA was completed by Ausenco Chile Limitada (“ Ausenco”) in accordance with National Instrument
43-101 Standards of disclosure for Mineral Projects (NI 43 -101). The assessment includes and
demonstrates that the Arizaro project has the potential of a 25,000 tonnes per annum (“tpa”) commercial-
scale operation to produce battery-grade lithium carbonate (“LCE” or “Li2CO3”).
Under the leadership of President and CEO, Steve Cochrane and President of South America, Jose de
Castro Alem, Lithium Chile has achieved key milestones which has culminated in the successful completion
of the PEA. Mr. Cochrane remarked, " The filing of this technical report is another important milestone.
These results support our view that the Arizaro Project has the potential to be a wo rld class producer of
Lithium Carbonate. We are excited about continued advancement of this project - a continuing journey of
near-term enhancement opportunities that have already been identified.”
Lithium Chile’s President, South America, Jose de Castro says: “We are very proud of our entire Argentinian
team, whose previous unique experience in starting up other Lithium projects has worked in creating real
value for all stakeholders in the Arizaro project, including communities in which we work, as well a s all
shareholders of Lithium Chile. We have achieved in less than 2 years this important step and we are
confident in advancing quickly to eventual production”.
ECONOMIC ANALYSIS AND SUMMARY:
Initial Capital Costs
The cost estimates include the initial investment and sustaining capital for a lithium concentration plant
with an annual capacity of 25,000 tonne LCE.
Summary of Initial Capital Cost:
Description US$ millions
Direct Costs:
Brine Extraction Wells $45
DLE Plant $108
Reverse Osmosis $70
Mechanical Evaporation $33
Chemical Plant $31
Purification $24
Dry Product Handling $28
General Utilities $75
Infrastructure $39
Direct Costs Total $452
Project Indirect $152
Resin DLE (first fill) $28
Contingency $190
Total Initial Capital Costs $823
OPERATING COSTS
The most relevant cost under operating cost is reagents consumption (50.8%) followed by energy
(16.6%). Both costs add up to US$85.7 million, representing 67.5% of the operating direct costs.
Summary of Operating Costs:
Description US$ million per year US$/tonne Li2CO3
Direct Operating Costs:
Chemical Reactive and Reagents $64.56 $2,583
Resin & Membrane replacement $13.31 $533
Energy $21.14 $846
Manpower $8.88 $355
Catering and Camp Services $6.85 $274
Maintenance $5.61 $224
Site Vehicle Costs $0.29 $11
Bus – In/Bus – Out transportation $0.55 $22
Consumables $0.63 $25
Li2CO3Transportation $5.20 $208
Direct Cost Subtotal $127.02 $5,081
Indirect Cost Subtotal $2.92 $117
Total Operating Costs $129.94 $5,197
CASH FLOW ANALYSIS
The economic analysis was performed assuming an 8% discount rate. Cash flows have been discounted to
the beginning of the construction January 1, 2025, assuming that the project execution decision will be
made, and major project financing would be carried out at this time. The pre -tax net present value
discounted at 8% (NPV8%) is US$1.846 million with a pre -tax internal rate of return (IRR) of 29.3% and
payback period of 3.5 years. On an after-tax basis, the NPV 8% is US$1.1 billion with an IRR of 24.1% and
payback period of 3.6 years.
Cash Flow Chart:
SENSITIVITY
Sensitivity analysis that was conducted on the Arizaro project revealed that the project is most sensitive
to changes in lithium carbonate price, and to a lesser extent to initial capital costs, operating costs and
sustaining capital requirements.
After-Tax IRR Sensitivity:
% -30.0% -15.0% Base Case 15.0% 30.0%
Li2CO3 Price 14.7% 19.7% 24.1% 28.2% 32.0%
Initial Capex 31.5% 27.4% 24.1% 21.6% 19.5%
Opex 26.2% 25.2% 24.1% 23.1% 22.0%
Sustaining Capex 24.8% 24.5% 24.1% 23.8% 23.5%
After-Tax NPV Sensitivity:
US$ million -30.0% -15.0% Base Case 15.0% 30.0%
Li2CO3 Price $415 $779 $1,138 $1,496 $1,852
Initial Capex $1,300 $1,220 $1,138 $1,055 $973
Opex $1,320 $1,229 $1,138 $1,046 $955
Sustaining Capex $1,166 $1,152 $1,138 $1,124 $1,109
After-Tax Payback Sensitivity:
Years -30.0% -15.0% Base Case 15.0% 30.0%
Li2CO3 Price 5.4 4.2 3.6 3.1 2.9
Initial Capex 2.9 3.2 3.6 3.9 4.2
Opex 3.4 3.5 3.6 3.7 3.8
Sustaining Capex 3.5 3.5 3.6 3.7 3.7
Cautionary Statement: The reader is advised that the PEA summarized in this news release is intended to
provide only an initial, high- level review of the Project potential and design options. The PEA mine plan
and economic model include numerous assumptions and the use of both indicated and inferred mineral
resources. Inferred mineral resources are too speculative to be used in an economic analysis except as
allowed for by NI 43 -101 in PEA studies. Mineral resources are not mineral reserves and do not have
demonstrated economic viability. There is no certainty that the Arizaro project envisioned by the PEA will
be realized.
UNIQUE PROJECT ADVANTAGES
The Arizaro Project enjoys certain unique advantages, which support a rapid development schedule, and
low capital and operating costs:
• The process selection considers the incorporation of a Direct Lithium Extraction (DL E) stage. DLE
processes have shorter start- up and ramp -up times, mainly due to their smaller infrastructure
requirements and the ability to be designed with a modular concept. This modularity allows for
incremental expansion, enabling a faster ramp -up to meet increasing demand. Additionally, the
crucial aspect of brine's chemical composition homogeneity further enhances the efficiency and
effectiveness of the process. With consistent brine composition, DLE operations achieve more
predictable and reliable lithium recovery rates, enabling better production capacity planning and
meeting demand requirements with confidence. Overall, integrating DLE into the process proves
to be a strategic choice, streamlining operations and ensuring a reliable supply of lithium.
• Multiple opportunities to enhance project economics through optimization and further
engineering have already been identified.
• More than 60 technologies combination were studied during PEA and trade off permits to
optimize main sustainability variables, water and energy usage, water basin balance, reagent
usage and Capex and Opex.
• Major discovery of lithium brines in the basin and major metallurgical testing including best
possibilities for water and energy usage.
• Unique Technical team with operation, projects and production experience.
• Initial production water aquifer identified and permitting underway.
QUALIFIED PERSON, QA/QC STATEMENTS:
Leandro Sastre is a geology professional with over 20 years of experience in the international mining
sector. He has worked extensively throughout Latin America with a focus on Argentina, Chile and Peru.
Mr. Sastre has reviewed and approved the scientific and technical content of this news release.
ABOUT AUSENCO:
Ausenco Chile Limitada (“Ausenco”) is a global engineering firm, experienced in the lithium industry.
Ausenco has prepared multiple economic assessments and feasibility studies, specifically for, but not
limited to, South American lithium brine extraction companies over the past several years. In addition to
being DLE and production process experts, Ausenco’s knowledge was invaluable for assessing current and
conservative operating and capital costs, which incorporated the latest global cost estimates. All values
are reported in US dollars, un less otherwise noted. References to CDN$ have been converted at 1.35 x
US$.
ABOUT LITHIUM CHILE:
Lithium Chile is a n exploration and lithium resource company with a property portfolio consisting of
111,978 hectares in Chile and 20,800 hectares in Argentina.
The Company will be filing an updated NI 43-101 report with an indicated resource of 1,737,000 metric
tonnes of LCE and inferred resource of 1,583,000 metric tonnes of LCE from its Salar de Arizaro, Argentina
project. The Phase 2 development program on the Salar de Arizaro is underway with results to be included
in an updated NI 43-101 report which will be filed on SEDAR when completed.
Lithium Chile also owns 4 properties, totaling 21,329 hectares , that are prospective for gold, silver and
copper. Exploration efforts are continuing on Lithium Chile’s Carmona gold/silver/copper property which
lies in the heart of the Chilean mega porphyry gold/ silver/copper belt.
Lithium Chile’s common shares are listed on the TSX-V under the symbol “LITH” and on the OTC-QB under
the symbol “LTMCF”.
To find out more about Lithium Chile Inc., please contact Steven Cochrane, President and CEO via email:
[email protected] or Michelle DeCecco, Vice President and COO, via email [email protected].
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.
FORWARD LOOKING STATEMENTS:
This news release may contain certain forward -looking information and forward -looking statements
within the meaning of applicable securities legislation (collectively "forward -looking statements").
Generally, forward -looking statements can be identified using forward -looking te rminology such as
"expected", "anticipated", "aims to", "plans to" or "intends to" or variations of such words and phrases or
statements that certain actions, events or results "will" occur. Such forward-looking statements are based
on various assumptions and factors that may prove to be incorrect, including, but not limited to, factors
and assumptions with respect to the general stability of the economic and political environment in which
the Company operates and the timely receipt of required regulatory a pprovals. You are cautioned that
the foregoing list of material factors and assumptions is not exhaustive. Although Lithium Chile believes
that the assumptions and factors on which such forward -looking statements are based upon reasonable
assumptions, undue reliance should not be placed on the forward -looking statements because Lithium
Chile can give no assurance that they will prove to be correct or that any of the events anticipated by such
forward-looking statements will transpire or occur, or if any of them do, what benefits Lithium Chile will
derive therefrom. Lithium Chile does not undertake to update any forward -looking statements herein,
except as required by applicable securities laws. All forward -looking statements contained in this news
release are expressly qualified by this cautionary statement.