PEA Highlights Shaakichiuwaanaan Project as a Potential North American Lithium Raw Materials Supply Base PEA outlines the potential for a competitive and globally significant high-grade lithium project targeting up to ~800 ktpa spodumene concentrate
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August 21, 2024 – Vancouver, BC, Canada August 22, 2024 – Sydney, Australia
PEA Highlights Shaakichiuwaanaan Project as a Potential North
American Lithium Raw Materials Supply Base
PEA outlines the potential for a competitive and globally significant high-grade lithium project
targeting up to ~800 ktpa spodumene concentrate
CAUTIONARY STATEMENTS REGARDING THE PEA
The Preliminary Economic Assessment (PEA) referred to in this announcement is a preliminary
technical, conceptual and economic study of the potential viability of developing the
Shaakichiuwaanaan Project by constructing a concentrate processing facility on site. The PEA
referred to in this announcement is conceptual , at scoping study level only , which is based on a
lower level of technical assessment that is not sufficient to support the estimation of mineral
reserves and is inherently uncertain. The PEA ha s an accuracy of ± 25 -30% only to determine
potential viability. It does not have the same level of detail, precision and confidence to determine
technical and economic viability as a pre -feasibility study (PFS) or definitive feasibility study (FS).
Further exploration and evaluation work and appropriate studies are required before the Company
will be in a position to estimate any mineral reserves or to provide any assurance of an economic
development case.
Approximately 75% of the Life of Mine production is in the Indicated Mineral Resource category
and 25% is in the Inferred Mineral Resource Category. The use of Inferred Mineral Resources in
the PEA is not the determining factor in the viability of the Shaakichiuwaanaan Project. The Inferred
Mineral Resource is considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorised as mineral reserves and is not the
determining factor in the viabil ity of the Shaakichiuwaanaan Project. Inferred Mineral Resources
are that part of the mineral resource for which quantity and grade, or quality are estimated on the
basis of limited geologic evidence and sampling, which is sufficient to imply but not verify grade or
quality continuity. Inferred Mineral Resources may therefore not be converted to mineral reserves.
Whilst both the CIM Co de and JORC Code provide that it is reasonably expected, though not
guaranteed, that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral
Resources with continued exploration, in accordance with ASX Listing Rule 5.16.4, there is a low
level of geological confidence associated with Inferred Mineral Resources and there is no certainty
that further exploration work will result in the determination of Indicated Mineral Resources or
that the production target in the PEA will be realized. Accordingly, there is no certainty that the
PEA or its conclusions will be realised.
The PEA is based on the material assumptions outlined elsewhere in this announcement. These
include pricing assumptions and assumptions about the availability of funding including the
availability of tax credits under CTM -ITC and cash flow from Stage 1 operations which are not
guaranteed. While the Company considers all the material assumptions to be based on reasonable
grounds, there is no certainty that they will prove to be correct o r that the range of outcomes
indicated by the PEA will be achieved.
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In accordance with ASX ’s guidance on scoping studies, the Company makes the following
statements.
To achieve the range of outcomes indicated in the PEA, funding in the order of $869.7 million is
required for Stage 1 and $503.8 million for Stage 2, representing a total of $ 1,373.5 million
(including contingency, pre-operating expenditure and assuming no CTM-ITC nor Stage 1 cashflow
becomes available). Despite the Company having a track record of raising funds, investors should
note that there is no certainty that the Company will be able to raise funding when needed.
However, the Company has concluded it has a reasonable basis for providing the forward-looking
statements included in this news release and believes that it has a “reasonable basis” to expect it
will be able to fund the development of the Project based on the assumed long-term pricing and
on a staged development approach (and therefore staged funding strategy ), which involves a
combination of potential strategic partnering, strategic debt, equity financing, potential operating
cashflows, tax credits and funding from available government infrastructure funds. It is possible that
such funding may only be available on terms that may be dilutive to or otherwise affect the value
of the Company’s existing shares. It is also possible that the Company could pursue other strategies
to provide alternative funding options. Given the uncertainties involved, investors should not make
any investment decisions based solely on the results of the PEA.
Please refer to the “Disclaimer for Forward Looking Information” section at the end of this
document for more information regarding assumptions and risks surrounding forward looking
statements contained herein.
HIGHLIGHTS
• Preliminary Economic Assessment (PEA) completed by independent consultants, BBA and
Primero, outlining a preliminary base case scenario for a staged development of the cornerstone
CV5 Spodumene Pegmatite, via both open pit and underground mining methods.
• High-grade Nova Zone1 (including 21.8 million tonnes at 2.1% Li2O of which 93% is Indicated,
7% is Inferred Resource category respectively) to be targeted and prioritised via underground
mining methods , allowing direct access to higher grade material and minimizing the
environmental footprint.
• At the targeted Stage 2 production rate of ~800 ktpa2 spodumene concentrate , this would
potentially position Patriot as the 4th largest spodumene concentrate producer globally3.
• Potential pre-tax net present value (“NPV”)8% of $4.7 billion (US$3.6 billion) and after-tax NPV8%
of $2.9 billion (US$2.2 billion) with a pre-tax internal rate of return (“IRR”) of 38% (after-tax
IRR of 34%) at US$1,375 per tonne (SC5.5, FOB Bécancour basis).
• Payback period of 3.6 years at an assumed average lithium price of US$1,375 per tonne (SC5.5,
FOB Bécancour basis) or US$1,500 per tonne (SC6 , FOB Bécancour basis), with life of mine
(“LOM”) of up to 24 years.
• Targeting to become a North American top-tier, lower cost producer with a n estimated
average LOM cash operating cost4 at site of $510 per tonne (US$387) and total cash operating
1 The Nova Zone is a subset of the CV5 Resource, proposed to be accessed via the same underground mining method targeting the
overall PEA underground Resource of 39.8 Mt @ 1.54% Li2O (70% is Indicated, 30% is Inferred Resource category respectively).
2 The annual production rate of ~800 ktpa is calculated considering the period of full production, i.e. Years 4 to 18 – see Figure 34.
3 See Figure 2.
4 Cash operating cost at site includes mining, processing and site administration expenses calculated on an SC5.5 basis. They are non-
IFRS financial measures, and when expressed per tonne, non-IFRS ratios. Refer to “Non-IFRS and other financial measures” for further
information on these measures.
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cost free-on-board (“FOB” Bécancour)1 of $736 per tonne (US$560)2.
• An estimated break-even SC6 price (on a fully ramped 800 ktpa, EBITDA, FOB Bécancour basis)
of US$587/t highlights the potentially viable nature of the Shaakichiuwaanaan Project
throughout the lithium price cycle.
• Estimated to indicatively generate approximately $8.3 billion in Project Cash Flow (unlevered)
over LOM.
• Average annual EBITDA3 anticipated to be in the order of $850M and annual FCF4 of $515M at
an assumed spodumene price of US$1,375 per tonne (SC5.5, FOB Bécancour basis).
• Phased development strategy with anticipated Stage 1 capital expenditure estimate of $761M
(US$579M) for the first 400 ktpa capacity including contingency and Net Capex of $640M
(US$487M) leveraging the proposed 30% Canadian Clean Technology Manufacturing –
Investment Tax Credit (“CTM-ITC”)5.
• Estimated Stage 2 expansion Capex of $504M (US$383M) including contingency and Net Capex
of $408M (US$310M) leveraging the proposed CTM -ITC, to reach a production capacity of
~800 ktpa of spodumene concentrate per year.
• The combined net cost6 to reach nameplate production for both Stage 1 and Stage 2 is estimated
to be approximately $608M (US$462M) taking into account funding that could come from both
cash flows from Stage 1 and proposed CMT-ITC tax credits.
• Process plant feed rate following Stage 2 expansion at an average of ~4.5 Mtpa7 via simple DMS-
only process; average LOM lithia recovery of 69.5%; spodumene concentrate grade at 5. 5%
Li2O.
• Access to existing, high quality transportation infrastructure with potential future
improvements in the region combined with a low-carbon footprint, low cost and mainly
renewable electricity source.
• Tier 1, stable mining jurisdiction of Eeyou Istchee James Bay region of Québec (under modern
land claims agreement – James Bay Northern Quebec Agreement “JBNQA”) combined with a
strong relationship with the Cree Nation of Chisasibi, Cree Nation Government and all
stakeholders.
• The Eeyou Istchee James Bay region ’s unique Examination Committee “COMEX” permitting
process, with its well -defined guidelines, ensures a structured and clear path to project
approval, fostering strong community and stakeholder engagement.
• Significant opportunities to enhance returns through further resource expansion, optimized
1 Total cash operating cost (FOB Bécancour) includes mining, processing, site administration, and product transportation to Bécancour
calculated on an SC5.5 basis. They are non-IFRS financial measures, and when expressed per tonne, non-IFRS ratios. Refer to “Non-
IFRS and other financial measures” for further information on these measures.
2 Refer to Table 4 – Cash Operating Costs.
3 EBITDA is a non-IFRS financial measure which is comprised of net income or loss from operations before income taxes, finance
expense – net, depreciation and amortization. This annual EBITDA is calculated considering the period of full production (i.e., Years
4 to 18). Refer to “Non-IFRS and other financial measures” for further information on these measures.
4 FCF is a non-IFRS financial measure defined as cash provided from operating activities, less cash outlays for sustaining capital, and less
taxes. The annual FCF is calculated considering the period of full production (i.e., Years 4 to 18). Refer to “Non-IFRS and other financial
measures” for further information on these measures.
5 The CTM-ITC (enacted on June 20, 2024) provides for up to 30% of the cost of the investment in eligible property used for eligible
activities through a refundable investment credit mechanism – see Table 3 for a full breakdown of the capital cost estimate.
6 The combined net cost includes Capex, Opex during pre -production of $108.3M, estimated CMT -ITC tax credits of $216.7M,
contingency of $242.8M and potential cash flow during expansion of $548.7M – see Table 3 for a full breakdown of the capital cost
estimate.
7 The average process plant feed rate of ~4.5 ktpa is calculated considering the period of full production, i.e. Years 4 to 18.
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mining to further prioritise access to the high-grade Nova Zone earlier and additional cost -
saving measures indicate transformative potential.
• The Company will consider progressing a Feasibility Study, which among other options may
include a trade-off study for a smaller high -grade focused development scenario , to optimise
the project in the event of a lower price environment.
• The Project remains on track with FID targeted in CY27, indicatively paving the way for the
construction to progress through CY28 and first production commencing in early CY29.
MANAGEMENT COMMENT
Ken Brinsden, President, CEO, & Managing Director for the Company, said: “Although studies are still
at an early stage the potential outcomes of the PEA for the Shaakichiuwaanaan Project highlights the
opportunity for Patriot Battery Metals to become a global lithium leader and a key supplier of lithium raw
materials to the emerging North American and European battery materials supply chain.
“The PEA outlines a staged development pathway for Shaakichiuwaanaan, commencing with an initial
400 ktpa production capacity which is intended to allow us to leverage the key competitive advantages of this
world-class deposit to provide lithium raw materials in emerging western markets.
“Importantly, the resources to be mined include a high-grade component in the Nova Zone that creates an
opportunity for a potentially resilient project, while also giving us considerable flexibility in terms of how we
progress Shaakichiuwaanaan. This flexibility and scalability could allow us to adapt nimbly to evolving market
conditions, while continuing to grow the resource base.
“As we consider moving to the Feasibility Study stage, the Project’s anticipated low operating costs and
expected IRA-compliant high-quality lithium product could make us an ideal partner for downstream players,
making this a highly strategic asset in the future lithium landscape. There is also strong inbound interest from
strategic partners to support Stage 1 funding, alongside potential access to Government funding mechanisms.
“The Shaakichiuwaanaan Project is potentially well positioned to anchor the North American lithium supply
chain, meeting demand for decades to come, in the process targeting significant returns for all our stakeholders
while maintaining a strong emphasis on sustainability and limited environmental impact,” Mr. Brinsden added.
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Patriot Battery Metals Inc. (“Patriot” or the “ Company”) (TSX: PMET) (ASX: PMT)
(OTCQX: PMETF) (FSE: R9GA), is pleased to announce the results of a Preliminary Economic
Assessment (“ PEA”) for the Shaakichiuwaanaan Project ( the “Project ” or the “ Property”)
(formerly known as Corvette), located in the Eeyou Istchee James Bay region of Québec, Canada.
The PEA outlines a scenario for the staged development of the cornerstone CV5 Spodumene
Pegmatite via both open pit and underground mining methods, thereby maximizing earlier access to
the high-grade Nova Zone. This scenario provides optionality and flexibility to unlock the potential
of the Shaakichiuwaanaan Project to become a leading lithium raw materials supplier in North
America.
This study is based on the CV5 Pegmatite component of the recently announced updated
Shaakichiuwaanaan Mineral Resource Estimate (“MRE”), which is the largest known lithium pegmatite
Mineral Resource in the Americas and the 8th largest globally (see news release dated August 5, 2024).
Although no final investment d ecision has been reached for the Shaakichiuwaanaan Project, the
compelling economic potential presented in the PEA, coupled with the expected straightforward
nature of the Project in terms of geology, pegmatite geometry, mining methodology and processing,
supports the Company considering to progress a Feasibility Study (“FS”). If a FS is progressed, it
would be targeted for completion during the September quarter 2025, in parallel with the submission
of the Project Environmental and Social Impact Assessment “ESIA” documentation.
It is contemplated that a trade-off study would also be undertaken at the early stage of a FS to explore
the potential advantages of further prioritizing a potentially smaller scale underground development
to access the high-grade Nova Zone within CV5, during the Stage 1 development1. This study will aim
to further define and optimise the Project ’s potential economic returns and potentially create
flexibility to increase the plant feed grade during periods of possible lower pricing outcomes. Higher
plant feed grades could improve the yield -to-product, thereby directly correlating to lower unit
production costs. This strategy has the potential to deliver a more financially resilient project in a
low-price scenario, ensuring more sustainable returns and operations through the lithium price
cycles.
A technical report prepared in accordance with National Instrument 43 -101 Standards of Disclosure
for Mineral Projects (“NI 43 -101”) including the PEA and the MRE will be filed on SEDAR+ by
September 19, 2024.
Unless otherwise indicated, all references to “$” or “CA$” in this release are to Canadian dollars
and references to “US$” in this release are to US dollars. A foreign exchange conversation rate of
US$ of 0.76US$/CA$ has been used over the LOM.
1 The PEA contemplates Stage 1 as being open pit mining only, with the Stage 2 expansion phase focusing on underground mining to
access the Nova Zone in parallel to the open pit mining. The trade-off study included in the FS will explore the advantages of bringing
forward the underground mining operation as part of the Stage 1 development.
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Figure 1: Shaakichiuwaanaan Property and Regional Infrastructure
PRELIMINARY ECONOMIC ASSESSMENT (PEA) SUMMARY
Cautionary Statement: The PEA is preliminary in nature and includes inferred mineral resources that are
considered too speculative geologically to have the economic considerations applied to them. Inferred mineral
resources are that part of the mineral resource for which quantity and grade or quality are estimated on the
basis of limited geologic evidence and sampling, which is sufficient to imply but not verify grade or quality
continuity. Inferred mineral resources may not be converted to mineral reserves . It is reasonably expected,
though not guaranteed, that the majority of Inferred mineral resources could be upgraded to Indicated mineral
resources with continued exploration. Accordingly, there is no certainty that the preliminary economic
assessment will be realized.
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EXECUTIVE SUMMARY
The PEA for the Shaakichiuwaanaan Project highlights its economic potential and strategic advantages,
potentially positioning it among the largest producers1 and as a top-tier low-cost producer of lithium.
The PEA outlines a promising staged development scenario for the cornerstone CV5 Pegmatite
deposit, utilizing both open pit and underground mining methods, to ensure earl ier access to the
high-grade Nova Zone.
Using DMS only processing a 5.5% Li2O spodumene concentrate will be targeted in both the Stage 1
and Stage 2 expansion production scenarios. The concentrate will be transported by road and rail to
Bécancour, where the base case assumes it to be converted to lithium chemicals by the customer(s)
or otherwise loaded at the Bécancour port facilities for seaborne trade.
As announced on August 5, 2024, Shaakichiuwaanaan hosts the largest known lithium pegmatite
Mineral Resource in the Americas and the 8 th largest known globally. Based on the preliminary
economic results of the PEA for the proposed development of the CV5 Spodumene Pegmatite , the
Company will consider advancing the Project to the FS level, which if progressed is expected to be
completed in the September Quarter 2025. The Company’s strategy will emphasize resource growth
and a phased development approach, ensuring flexibility and scalability to adapt to market conditions.
The PEA incorporates a staged development strategy, with Stage 1 targeting production capacity of
~400 kpta of spodumene concentrate with an estimated Initial Net Capex of $640M (US$487M)2,
including contingency and proposed CTM-ITC tax credits.
This first stage lays a solid foundation for the Project to commence production, with a subsequent
Stage 2 expansion aimed at doubling the production capacity to ~800 ktpa. The Stage 2 expansion
has an estimated Net Capex of $408M (US$310M) including contingency and proposed CTM -ITC
tax credits3. The combined net cost requirement to reach nameplate production for both Stage 1 and
Stage 2 is estimated to be approximately $608M (US$462M) 4 taking into account cash flows from
Stage 1 and proposed CMT-ITC tax credits.
The Company will only commit to development after considering the economic conditions that
prevail or are foreseeable at the time that an initial production decision, or when a subsequent
expansion decision is made . That said, through the publication of this preliminary economic
assessment, the Company believes the Shaakichiuwaanaan Project has the potential to be a long-life
lithium asset with unique competitive characteristics.
Staged development also opens the opportunity for the expansion capacity to be funded partly or
entirely through internal cash flows expected to be generated from Stage 1. This will be further
assessed in any future FS.
With the production scenario outlined in the PEA, the Shaakichiuwaanaan Project could become one
1 Refer to Figure 2.
2 The Net Capex excludes Opex during pre-production of $108.3M and assumes eligibility for a tax credit of $121.1M under the CTM-
ITC legislation. Stage 1 has Capex of $761 M which excludes CTM -ITC credits and pre-production opex – see Table 3 for a full
breakdown of the capital cost estimate.
3 The Net Capex estimate of $408M assumes eligibility for a tax credit of $95.6M under the CTM - ITC legislation. Stage 2 expansion
has Capex of $503.9M excluding CTM-ITC credits – see Table 3 for a full breakdown of the capital cost estimate.
4 The combined net cost includes Capex, Opex during pre -production of $108.3M, estimated CMT-ITC tax credits of $216.7M,
contingency of $242.9M and cash flow during expansion of $548.7M – see Table 3 for a full breakdown of the capital cost estimate.
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of the largest spodumene producers in the world1 at the completion of the Stage 2 expansion phase,
and potentially the largest spodumene producer in the Americas, offering production of SC5.5
spodumene concentrate in a stable jurisdiction.
Financial estimates in the PEA are based on a long-term weighted average spodumene concentrate
price of US$1,375/t (SC5.5 – FOB Bécancour basis), which currently sits above spot pricing, but is
derived from market price forecasts by independent reporting agencies, banking commodities analyst
reports and recently published technical reports.
The PEA demonstrates the potential for robust economics, highlighted by a combined after-tax NPV8%
of $2.9 billion (US$2.2 billion) and after -tax IRR of 3 4%. The Project ’s mine life is projected at 24
years, based on a total extracted Mineral Resource of 66% of total resources defined at CV5 ,
generating significant net cash flows with capital payback achieved in 3.6 years.
Further analysis of the preferred project mining methodology for CV5 will be a key component of
any proposed FS activities. The FS would seek to determine the most economic approach for mining
the resource, based on the PEA’s hybrid mining method (inclusive of both open pit and underground
mining methods) for the base scope.
The FS would also include an early trade-off study that will evaluate accelerated development of the
higher-grade Nova Zone, with the aim of bringing it into production as early as possible. Increasing
the feed grade to the processing facility from a higher-grade zone is expected to be directly correlated
to lower process plant production costs, and therefore earlier access to the Nova Zone potentially
creates greater resilience to lower product pricing outcomes.
The Company’s PEA mining strategy has adopted both open -pit and underground mining methods
and was designed to gain earlier underground access to the high-grade Nova Zone in the northeast
area of the CV5 Pegmatite than would be possible with just open pit mining. This approach has the
potential to reduce the Project’s operational footprint, potentially simplifying the approval process
by decreasing the open pits strip ratio and therefore minimi zing waste dep osition at surface . The
open pit strip ratio during the proposed PEA LOM scenario is estimated to be a low 3.7:1.
The mining strategy is further complemented by ramping up production in low -strip, higher-grade
areas of the open pit(s), which also serves to de-risk project execution, ensuring stable production
in the initial years. This phased and incremental expansion is designed to allow for managed growth
and adaptability, which the Company would expect could be further enhanced by accessing the Nova
Zone earlier in the mine’s development.
Additionally, t he strategy adopted in the PEA aligns with positioning the Company to support
downstream chemical conversion in Québec, reflecting its commitment to integrating the value chain
and enhancing local economic benefits.
Furthermore, this strategy has the potential to establish the Company as a key player in the
development of a global North America & Europe supply chain for lithium, helping to meet the rising
demand for locally sourced, high-quality lithium products which are compliant with the United States
Inflation Reduction Act (“IRA”). While focusing on Québec, the Project ’s attributes would potentially
make it attractive for downstream partners globally, potentially capable of producing significant
1 Refer to Figure 2.