Lithium Ionic Announces Feasibility Study Results for the Bandeira Lithium Project, Minas Gerais, Brazil
Lithium Ionic Announces Feasibility Study Results for the Bandeira Lithium
Project, Minas Gerais, Brazil
▪ 178,000tpa of spodumene concentrate production (5.5% Li2O)
▪ 14-year mine life
▪ After-tax NPV8 of US$1.3B; IRR of 40%
▪ All-in operating costs of $444/t SC5.5
*All amounts expressed in U.S. dollars unless otherwise noted
TORONTO, ON, May 29, 2024 – Lithium Ionic Corp. (TSXV: LTH; OTCQX: LTHCF; FSE: H3N)
(“Lithium Ionic” or the “Company”) is pleased to announce the results of a Feasibility Study (“FS”
or “Study”) for its 100% -owned Bandeira Lithium Project (“Bandeira” or the “Project”) located in
Minas Gerais, Brazil. The Bandeira claims span 157 hectares, which represents only about 1%
of Lithium Ionic’s extensive 14,182 -hectare land package in Brazil’s 'Lithium Valley' , a region of
global significance for hard-rock lithium production.
Highlights of the Feasibility Study for the Bandeira Project:
▪ Mine Life & Production: 14-year underground mining operation producing an average of
178,000t of high-quality spodumene concentrate grading 5.5% Li2O (“SC5.5”).
▪ Strong Project Economics: After-tax net present value (“NPV8%”) of US$1.3 billion and
after-tax internal rate of return (“IRR”) of 40% at average SC5.5 price of $2,277/t.
▪ Industry-leading Operating Costs: All-in LOM OPEX of $444/t of SC5.5
▪ Low Capital Intensity: Total capital expenditure (“CAPEX”) of US$266 million (including
a 15% contingency) with after-tax payback of 3.4 years. LOM sustaining costs of US$ 81
million.
▪ Minimal Land-use Footprint: The development plan contemplates an underground
mining operation with a simple processing circuit to optimize recoveries while minimizing
the impact on the environment and local communities.
▪ Responsible Tailings Management: For safety and environmental reasons, the mine
will utilize dry stacking waste disposal, which among other benefits will reduce water
usage and facilitating site rehabilitation.
▪ Local Social & Economic Contributions: Total estimated taxes payable of $915
million, a peak local workforce of ~870 direct employees, and an estimated $677 million
procuring goods and services within Brazil over the life of mine.
▪ Construction Permits on Track for mid-2024: The LAC license application submitted
in November is currently under review by the state agency. Approval is expected in early
Q3 2024.
Blake Hylands, P.Geo., Chief Executive Officer of Lithium Ionic, commented, “This study marks
an important developmental milestone, confirming the strong results from our PEA in late 2023
and solidifying our path to becoming a near -term lithium producer. Furthermore, it outlines the
significant positive impacts Bandeira will have through employment, tax contributions, and local
procurement. While we are very pleased with the results of the study, the Company intends to
move project engineering forward to the basic engineering phase where a value-add process will
take place to further optimize and streamline capital and operating costs. Several opportunities
identified in the feasibility stage will be subjected to trade-off studies, prior to entering the detailed
engineering phase to ensure the project value and operational efficiencies are maximized. We
look forward to continuing to rapidly advance Bandeira towards production, recognizing that this
will deliver the most value to our shareholder, however we are very excited by the growth
opportunities and development potential at our other regional properties which could present
significant future scale opportunities for the Company.”
Bandeira Definitive Feasibility Study Results
The Feasibility Study for the Bandeira Project, completed by Atkins Réalis (formerly SNC Lavalin),
is the culmination of over 12 months of comprehensive work involving the expertise of all
engineering disciplines as well as market studies . This includes detailed planning for the mine,
process design, plant layout, infrastructure, and product logistics. The study supports a robust
project with strong economic viability, featuring a minimal footprint underground mine, an efficient
and straightforward processing circuit, and a safe, sustainable dry stack tailings facility. The FS
builds on and confirms the strong results from the Preliminary Economic Assessment ( “PEA”)
completed in October 2023.
Table 1. Bandeira FS – Summary of Key Results and Assumptions
Project Economics
Post - Tax NPV8 $1.31 B
Post - Tax IRR 40%
Pre - Tax NPV8 $1.57 B
Pre - Tax IRR 44%
Annual Revenue – LOM Average $417 M
Average Annual After-Tax Free Cash Flow
(after repayment of initial capital, years 4-14) $286 M
Payback 41 months
Production Profile
Total Project Life (LOM) 14 years
Total LOM production (ore mined) 17.2 Mt
Total SC5.5 production (LOM) 2,493 kt
(338.3 kt LCE)
Nominal Plant Capacity 1.30 Mtpa
Average plant throughput 1.23 Mtpa
Run-of-Mine grade, Li2O (mine diluted) 1.16%
Average Annual Production of Spodumene Concentrate @ 5.5% Li2O 178 ktpa
(24.2 ktpa LCE)
Metallurgical Recovery (SC5.5% Li2O) 68.9%
CAPEX & OPEX
Initial Capital Costs $266M
Sustaining CAPEX $81M
Operating costs (FOB / t SC5.5) $444/t
Economic Assumptions & Parameters
Spodumene Concentrate Price (5.5% Li2O; LOM Avg) $2,277/t
Exchange rate (USD:BRL) $1.00: $5.07
Discount Rate 8%
Project Location and Infrastructure
The Bandeira pro perty covers 157 hectares, representing only approximately 1% of the
Company’s large 14,182-hectare land package in the northern region of Minas Gerais State,
Brazil, within the renowned "Lithium Valley" (see Figure 1). This area is recognized for its
significant concentration of lithium -bearing pegmatites, making it one of the most promising
lithium-producing regions globally. The Project benefits from excellent local infrastructure, which
is critical for the efficient development and operation of the future mining activities.
The Bandeira site is well-connected via major highways, facilitating the transport of materials and
personnel. The project site is approximately 570 kilometers from the port of Ilhéus in Bahia, which
serves as a key logistical point for exporting lithium concentrate to international markets, including
Shanghai, China. The proximity to Araçuaí provides access to essential services and amenities,
enhancing operational efficiency.
A key infrastructure component for the Bandeira Project was secured in October 2023 through an
agreement with Cemig Distribuição S.A. (“Cemig”). This agreement facilitates the construction
and electrification of essential power infrastructure, including three kilometers of new transmission
lines and a new substation adjacent to the future Bandeira mine and will ensure that the Project
will be powered by low -cost, renewable hydroelectric power, aligning with the Company’s
commitment to operating sustainably.
Figure 1. Bandeira Project Location
Mining Operations
The Bandeira project is designed to incorporate dual underground mining operations, ensuring
efficient extraction of its deposits. The primary orebodies, representing approximately 83% of the
total deposit, will be mined using a bottom-up sublevel stoping method (Bandeira Sublevel Mine,
or “BSL Mine”). Concurrently, the secondary southeast orebody, which comprises approximately
0.98 million tonnes, will be mined using the room-and-pillar technique (Bandeira Room and Pillar
Mine, or “BRP Mine”). Figures 2 and 3 present the annual mine production plan and the annual
plant feed along with the Li2O grade, highlighting the project's robust production capabilities.
Figure 2. ROM to Plant Feed and Li2O grade, %
Figure 3. Annual Production of Spodumene Concentrate grading 5.5% Li2O
Mineral Processing
The mineral processing flowsheet for the Bandeira project is designed to maximize lithium
recovery and quality. It features a two-stage crushing circuit, which includes a Jaw crusher and a
Gyratory Cone crusher, followed by dry screening classification. The coarse and m id fractions
undergo ore sorting and Dense Media Separation (DMS) to produce a final S C5.5 Li2O
concentrate. See Figure 4 for a visual representation of the process flowsheet.
The underground mine is expected to produce ore with an average Li2O grade of 1.16% over the
Life of Mine (LOM), considering a mined dilution rate of 17.0%. The ore sorting process will
enhance the ore quality by removing undesirable dilution materials, mainly schist, and non-lithium-
bearing minerals such as feldspar and muscovite. This process improves the lithium oxide grade
to approximately 1. 50%, providing a higher -quality feed for the DMS while rejecting barren
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Mine Diluted Li2O (%)
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SC5.5 (t)
uneconomical waste. Based on Heavy Liquid Separation (HLS) bench scale test work completed
by the Company, ore sorting and DMS pilot plant operations, the overall Li2O recovery is projected
to reach 68.9%.
This efficient mineral processing approach ensures that we can maximize lithium recovery while
maintaining the highest product quality. A higher quality chemical grade spodumene results in
lower conversion costs therefore could potentially be sold at premium prices.
Figure 4: Bandeira process flow diagram
Capital Costs
Initial capital costs for the Bandeira Project are estimated at $266 million, which includes a 15%
contingency of $33.7 million. The sustaining capital over the 14-year mine life is projected at
$81.4 million. A breakdown of the capital costs is presented in Table 2.
Table 2. Project Capital Costs (CAPEX) Breakdown
Initial CAPEX $266.1M
Mine $50.5M
Plant $102.7M
Engineering Service $26.6M
General Infrastructure & Others $41.9M
Pre-operation $10.8M
Contingency (15%) $33.7M
LOM Sustaining CAPEX $81.4M
SUDENE Federal Tax Incentive (%, reduction in Corporate Income Tax) 75%
*Discrepancies in the totals are due to rounding effects.
Operating Costs
The operating costs of the Bandeira Project are estimate d to be US$64.30 per tonne of ore
processed. Total operating costs are estimated at US$444 per tonne of 5.5% Li 2O spodumene
concentrate produced, placing it in the first quartile of the global lithium industry. A breakdown of
the operating costs is presented in Table 3.
Table 3. Project Operating Costs (OPEX)
Operating costs (per tonne of ore processed) $64.3/t
Mining $36.7/t
Processing $24.6/t
SG&A $3.0/t
Operating costs (per tonne of 5.5% Li2O spodumene concentrate produced) $444/t
Mining $253/t
Processing + Tailings handling $170/t
SG&A $21/t
Transportation costs to customer destination
(Project Mine Site to Shanghai Port, China) $112.50/t
*Discrepancies in the totals are due to rounding effects.
Project Economics and Sensitivities
The after-tax NPV 8 for the Bandeira Project is $1.3 billion and IRR is 40%, assuming a 5.5%
spodumene concentrate (“SC5.5”) price of $2,277/t. At an elevated price of $3,416/t, the NPV
increases to $2.4 billion with an IRR of 62%, underscoring the project’s strong potential to benefit
from rising lithium prices (see sensitivity analysis in Table 4).
Sensitivity analyses completed as part of the FS demonstrate that the Project's value is strongly
influenced by the selling price of spodumene concentrate. As demonstrated in Figure 5, while
capital (CAPEX) and operational (OPEX) costs impact the Net Present Value (NPV), their effects
are relatively minor compared to concentrate price fluctuations. Given the expected increase in
lithium demand, Bandeira is well -positioned to capitalize on favo urable market conditions and
benefit from rising spodumene prices.
Figure 5: Sensitivity Analysis for Spodumene 5.5% Li2O price, CAPEX and OPEX estimation
Table 4. After-Tax NPV and IRR Sensitivity to Spodumene Price
Low Case Base Case High Case
LOM Avg Spodumene Price
(SC5.5) $1,822/t $2,277/t $3,416/t
NPV $864 M $1.31B $2.41B
IRR 32.5% 40.3% 62.2%
Payback 4.3 years 3.4 years 2.2 years
Lithium Market Outlook & Spodumene Concentrate Price Forecast
A long-term spodumene concentrate price of US$2,277/tonne (5.5% Li2O grade) was used in
the Feasibility Study. This long-term price forecast was obtained by Fastmarkets, one of the
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NPV (M USD)
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