Rock Tech Lithium completes Pre -Feasibility Study for its Georgia Lake Project
PRESS RELEASE
Rock Tech Lithium completes Pre -Feasibility Study
for its Georgia Lake Project
Vancouver, B.C., November 1 5, 2022 - Rock Tech Lithium Inc. (TSX -V: RCK; OTCQX: RCKTF; FWB: RJIB; WKN:
A1XF0V) (the "Company" or "Rock Tech") is pleased to announce the results of a Pre -Feasibility Study (“PFS”)
completed for its 100%-owned Georgia Lake spodumene project located in the Thun der Bay Mining District of
Ontario, Canada (the "Georgia Lake Project"). The PFS strengthens and further substantiates previous
engineering studies and supports an open pit and underground mine operation and the construction of a
1,000,000 tonne-per-annum spodumene concentrator. The positive results indicate a pre -tax internal return
rate of 47.8% and a pre-tax net present value of US-Dollars 223 million for the Georgia Lake Project. They also
support Rock Tech's decision to further deepen and shape the vertically integrated strategy connecting its
mining, concentration, and conversion operations. The Company is also pleased to announce an initial Mineral
Reserve and updated Mineral Resource estimates for the Georgia Lake Project.
PRE-FEASIBILITY STUDY HIGHLIGHTS
• Estimated pre-tax net present value at an 8% discount rate (“NPV”) of USD 223 million at
an average life of mine (“LOM”) price of USD 1,500/t, 6% spodumene concentrate (“SC6”).
• Estimated pre-tax internal rate of return (“IRR”) of 47.8% at an average LOM price of USD 1,500/t, SC6.
• LOM of 9 years, with low-cost open pit mining for the first 4 years and underground mining
for the last 5 years.
• Pre-tax payback of 2.9 years.
• Update to Mineral Resource Estimate: Total indicated Mineral Resources of 10.6mt at
grading 0.88% Li2O and total inferred Mineral Resources of 4.2mt at grading of 1.00% Li2O.
• Declaration of Mineral Reserves: Total probable Mineral Reserves of 7.33mt at grading of 0.82% Li2O.
• Pre-production costs estimated at USD 192.2 million and sustaining capital costs of USD 98.5 million
(including closure costs).
• Average annual spodumene concentrate production of approximately 100,000 t of SC6.
• Total LOM average cash costs of USD 719/t concentrate.
The objective of the PFS wa s to assess the technical and economic viability of achieving spodumene
concentrate production at the Georgia Lake Project. The PFS evaluated the construction and operation of a
1,000,000 tonne-per-annum concentrator (the "Georgia Lake Concentrator") with open pit and underground
mining operations over a 9-year LOM. The Company is pleased that the positive results of the PFS support the
viability of lithium mining activities and the concentration of spodumene at the Georgia Lake Project.
The economics associated with the construction of a lithium hydroxide converter and refinery facility (a
“Converter”) at the Georgia Lake Project were not considered as part of the PFS. Accordingly, the results of the
PFS may not be directly comparable to the results of the 2021 PEA (as defined below), which contemplated the
construction and operation of an integrated 15,000 tonne -per-annum Converter for refining a portion of the
production from the Georgia Lake Project.
The Company continues to evaluate refining opportunities for future production from the Georgia Lake Project
in light of industry and global socio -economic factors and competencies developed in connection with the
ongoing development of the Company's proposed Converter in Guben, Germany. Su ch refining opportunities
include utilizing a vertically integrated strategy for the Georgia Lake Project, whereby future production from
the Georgia Lake Project is refined at the proposed Converter in Guben or a Company owned -and-operated
Converter in North America or selling such production to existing third-party refiners.
The metallurgical testwork completed on sample feedstock from the Georgia Lake Project positively
demonstrates the suitability of the spodumene concentrate for conversion into battery -grade lithium
hydroxide. Rock Tech’s CEO, Dirk Harbecke, commented on the encouraging developments , “These results
support the integration of Georgia Lake with the downstream conversion industry, where we have been
building strong partnerships and extensive know -how. The encouraging results also demonstrate that we are
well positioned to explore potent ial fields of collaboration in the North American and European EV supply
chain”.
The PFS and Mineral Reserve and Resource estimates have further increased the confidence level of bringing
the Georgia Lake Project towards feasibility level, which will provide the basis for a construction decision. The
Company intends to undertake a feasibility study for the Georgia Lake Project as part of its efforts to optimize
and advance the Georgia Lake Project.
These efforts are expected to include upgrading the Mineral Resource and Mineral Reserve estimates through
exploration drilling , optimizing mining operations with the opportunity to become owner- operated, and
enhancing infrastructure detail through support from the Company’s indigenous partners to reduce capital
costs and increase operational efficiency.
SUMMARY OF PFS RESULTS
The PFS and Mineral Reserve and M ineral Resource estimates have been prepared in accordance with the
National Instrument 43 -101 – Standards of Disclosure for Mineral Projects (“NI 43 -101”) by AMC Consulting
(Canada) Ltd. (“AMC”) with s pecialist contributions from Wave International Pty (“Wave”), Knight Piesold
Consulting (“KP”), Pinchin Ltd. (“Pinchin”), Environmental Resources Management (“ERM”), and Environmental
Applications Group (“EAG”).
The PFS evaluates the planned production of spodumene concentrate from an average of 2,800 tonne-per-day
(“tpd”) open pit and underground operation, with a process plant that will include crushing, grinding, density
media separation (DMS) and flotation, estimated to produce a combined 6% Li 2O grade spodumene
concentrate.
The PFS incorporates the recent results from the Company's drilling program at the Georgia Lake Project, as
well as recent metallurgical test work to determine key process criteria and operational recovery. Metallurgical
testing programs were undertaken at commercial laboratories SGS Canada Inc. (“SGS”) and Nagrom Mineral
Processors (“Nagrom”) simulating and improving the process flowsheet to maximize ore grade and recovery.
KEY METRICS
KEY METRICS AND ASSUMPTIONS (1) (2)
Pre-Tax NPV(3) USD 223m
After-Tax NPV(3) USD 146m
Pre-Tax IRR 47.8%
After-Tax IRR 35.6%
Pre-Tax Payback Period 2.9 years
After-Tax Payback Period 3.3 years
Pre-Production Capital Costs USD 192m
Life-of-Project Capital Costs(4) USD 291m
Life-of-Project Revenue USD 1,175m
Life-of-Project Total Operating Costs(5) USD 536m
Life-of-Project Total Cash Costs(5) USD 576m
AISC USD/t concentrate(5) USD 1,082
Average LOM 6% Spodumene Concentrate price USD/t(6) USD 1,500
Notes:
1. See "Key Assumptions and Sensitivity Analysis" section below for further details.
2. Key metrics are calculated on nameplate annual production of 1,000,000 tpa of spodumene pegmatite feed over 9-year life of project.
3. Discount rate of 8%.
4. Includes pre-production, sustaining capital, and closure costs.
5. Refer to “"Non-IFRS and other Financial Measures”.
6. Source: derived using Benchmark Mineral Intelligence and Wood Mackenzie.
The PFS estimated a pre -tax NPV of the Georgia Lake Project of USD 223 million compared to the USD 289
million pre-tax NPV estimated in the Company's technical report titled, “Preliminary Economic Assessment for
an Integrated Lithium Hydroxide Operation from the Georgia Lake Lithium Project, Northwest Ontario, Canada”
(the “2021 PEA”), while the PFS estimates an after tax NPV of USD 146 million compared to the USD 230 million
estimated in the 2021 PEA. Additionally, the PFS estimates an IRR of 48% and 36%, pre -tax and after- tax
respectively, compared to 22% and 20% estimated in the 2021 PEA.
Differences in key metrics between the 2022 PFS and the 2021 PEA are primarily attributable to the exclusion
of an integrated Converter in the PFS, an increased level of confidence in the engineering details, a change in
the Mineral Resource categories and updated cost estimates based on 2022 market conditions. Additional
differences include a more complex recovery flowsheet, which includes the process of DMS; the addition of an
on-site camp and subsequent accommodation service; and a closure plan that is m ore closely aligned with
similar operations.
CAPITAL COST ESTIMATES
The mine site project covered in the PFS is based on the planned construction of a green field facility having an
estimated nominal annual feed of 1 Mtpa for open pit and underground mining. The capital and operating cost
estimates were completed by the following parties:
COMPANY NAME AREA OF RESPONSIBILITY
AMC Consultants (Canada) Ltd. Mining
Wave International Pty. Processing and Infrastructure
Knight Piesold Ltd. Tailings Storage Facility
Pinchin Ltd. Water Management
The capital cost estimate for this project is considered to an expected accuracy level of +25% / -25%, carrying
a contingency of 20%.
The capital costs for the LOM are estimated to be a total of USD 290.7 million, which consist of pre-production
capital costs of USD 192. 2 million and sustaining capital costs of USD 98.5 million, including closure costs of
USD 10.6 million. The LOM capital costs summary and its distribution by area is shown in the table below.
LOM CAPITAL COST SUMMARY
Capital costs Pre-Production (USD m) Sustaining (USD m) Total (USD m)
Mine 5.8 70.2 76.0
Process and surface
infrastructure 168.8 13.4 182.2
TSF 12.9 4.3 17.2
Water Management Plan
(WMP) 4.7 - 4.7
Closure costs - 10.6 10.6
Total capital costs 192.2 98.5 290.7
OPERATING COST ESTIMATES
The average unit operating cost over the LOM are estimated at USD 73.16/t processed. The unit operating
costs include contractor quoted costs for open pit of USD 4.45/t open pit mined material and underground
mining of USD 50.78/t underground ore mined, which equates to an estimated weighted average LOM mining
cost of USD 40.04/t processed. The mineral processing costs are USD 20.58/t processed and the general and
administration (G&A) costs are USD 12.54/t processed. Operating cost estimates for the project are
summarized below.
LOM AND UNIT OPERATING COSTS
Operating costs USD m USD/t processed (1)
Mining 293.4 40.04(2)
Processing, WMP, and TSF 150.9 20.58
Processing 148.0 20.19
TSF 1.7 0.22
WMP 1.2 0.17
G&A 91.9 12.54
Total 536.2 73.16
Note:
1. Overall tonnage processed of 7.3 Mt is used to calculate the unit rate for USD/t processed.
2. Weighted average unit rate including underground mining cost (USD 50.78/t) and open pit mining cost (USD 4.45/t)
KEY ASSUMPTIONS AND SENSITIVITY ANALYSIS
The discount rate for financial analysis is 8%. The weighted average price of spodumene concentrate is USD
1,500(1) per tonne over the life of mine, reducing from a peak price of USD 2,722 per tonne in 2024. The
following exchange rates were considered: C$1.00 = US$0.77, C$1.00 = A$1.10; C$1.00 = €0.73.
As part of the PFS, a sensitivity analysis was conducted on the Project’s NPV and IRR for key variables, which
include spodumene concentrate price, capital costs, and operating costs. Using the base case as a reference,
the key variables were changed between +/ -20% at 10% intervals while holding other variables constant. The
Project is most sensitive to spodumene concentrate prices, capital, and operating costs . Spodumene
concentrate price, capital costs and operating cost sensitivities are presented in the tables below.
SENSITIVITY RANGES
Parameters Unit -20% -10% Project case 10% 20%
SC6 Price USD/t conc. 1,200 1,350 1,500 1,650 1,800
Results
Pre-tax NPV 8% USD M 54 139 223 308 392
Pre-tax IRR % 21% 36% 48% 59% 69%
Post-tax NPV 8% USD M 19 83 146 208 270
Post-tax IRR % 13% 26% 36% 44% 52%
SENSITIVITY RANGES
Parameter Units -20% -10% Project case 10% 20%
LOM capital costs USD M 233 262 291 320 349
Results
Pre-tax NPV 8% USD M 273 248 223 198 173
Pre-tax IRR % 65% 56% 48% 41% 35%
Post-tax NPV 8% USD M 196 171 146 121 97
Post-tax IRR % 51% 43% 36% 30% 24%
SENSITIVITY RANGES
Parameter Units -20% -10% Project case 10% 20%
LOM operating costs USD/t milled 58.52 65.84 73.16 80.47 87.79
Results
Pre-tax NPV 8% USD M 294 259 223 188 152
Pre-tax IRR % 56% 52% 48% 44% 39%
Post-tax NPV 8% USD M 198 172 146 120 92
Post-tax IRR % 42% 39% 36% 32% 28%
MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES
The updated Mineral Resource estimate of the Georgia Lake Property outlined 10.60 million tonnes (mt) of
Indicated Mineral Resource at a grade of 0.88% Li 2O and 4.22 mt of Inferred Mineral Resource at a grade of
1.0% Li2O, and are effective as of July 31 2022. The Mineral Resource estimate, prepared by AMC Consulting,
is based on 312 core drillholes during the period of 1955 to 2022, and 858 meters of trenching over the same
period.
Changes in the Mineral Resource estimate are attributable to, among other things:
• 23,490 metres surface drilling.
• 1,164 metres additional sampling of mineralization.
• New interpretation of mineralized domains.
• Updated classification.
• Reduced cut off grades calculated from preliminary economic assumptions.
2022 MINERAL RESOURCE
Classification Mining Cut-off grade Li2O (%) Zone Tonnes Li2O (%)
Indicated Open pit 0.3 NSPA OP Indicated 4,242,618 0.88
Indicated Underground 0.6 NSPA UG Indicated 6,358,650 0.89
Total Indicated 10,601,268 0.88
Inferred Open pit 0.3 NSPA OP Inferred 245,933 0.78
Inferred Underground 0.6 NSPA UG Inferred 2,073,069 0.91
Inferred Underground 0.6 SSPA UG Inferred 1,903,274 1.12
Total Inferred 4,222,276 1.00
Notes:
a. CIM Definition Standards (2014) were used for reporting the Mineral Resources.
b. The Qualified Person is Dinara Nussipakynova, P.Geo. of AMC.
c. Cut-off grade for open pit Mineral Resources is 0.30% Li2O.
d. Open pit Mineral Resources are constrained by the optimization pits shell at a lithium concentrate price of USD 1,100/t with
metallurgical recovery of 80% and concentrate grade of 6%. Both cut off use same parameters.
e. The pit optimization was based on following cost assumptions:
i. Mill feed mining costs of USD 4.5/t and waste mining cost of USD 4.5/t.
ii. Processing costs of USD 25/t and General and Administration costs of USD 15/t.
iii. Slope angle 45-48 degrees.
f. Cut-off grade for underground Mineral Resources is 0.60% Li2O based on a USD 45/t mining cost and processing and G&A the same
as the open pit.
g. Underground Mineral Resources are not constrained.
h. Mineralized Density used as 2.69 t/m3.
i. Waste Density used as 2.75 t/m3.
j. Drilling results up to 31 July 2022.
k. The numbers may not compute exactly due to rounding.
The initial Mineral Reserve estimates, prepared by AMC, are effective as of July 31, 2022 and conform to CIM
Definition Standards (2014). All design and scheduling have been completed using the block model generated
during the updated Mineral Resource estimate.
The cut -off values supporting the estimation of underground Mineral Reserves were generated using a
spodumene concentrate price of USD 1,100 per tonne. The cost assessment indicated that a cut -off grade of
0.3% Li2O for open pit and 0.6% Li2O for underground was appropriate.
2022 MINERAL RESERVE
Type of Reserves Tonnage (mt) Li2O (%) Cut off Li2O (%)
Probable open pit 4.05 0.80 0.3
Probable underground 3.28 0.84 0.6
Total Probable Reserve 7.33 0.82
Notes:
a. The Company's Mineral Reserve estimates are effective as of July 31 st, 2022 and are reported in accordance with CIM Definition
Standards (2014).
b. The Qualified Persons are David Warren, P.Eng of AMC for the Open Pit and Gary Methven, P.Eng of AMC for the Underground.
c. Cut-off value applied, Open pit: 0.3% Li2O; Underground: 0.6% Li2O.
d. Spodumene concentrate price of US$1,100/t concentrate at a grade of 6% Li2O used to calculate reserves.
e. Metallurgical recovery of 80% and payability 100%
f. Mining Recovery, Open pit: 95%; Underground: 95%.
g. Mining Dilution, Open pit: 10%; Underground: 10%
h. Numbers may not compute exactly due to rounding.
i. Exchange rate of 1US$ to 1.3C$.
j. Numbers may not compute exactly due to rounding.
Readers are cautioned that Mineral Resources are reported inclusive of Mineral Reserves and that Mineral
Resources that are not Mineral Reserves do not have demonstrated economic viability. Areas of uncertainty
that may materially impact the Mineral Reserve and/or Mineral Resource estimates or the development
thereof include, among others, prices of spodumene concentrate, lithium chemicals, changes to resource
modelling methods, geotechnical assumptions and metallurgical recovery assumptions.
Please see the section titled "Risk Factors" in the Company's 2021 annual information form available on SEDAR
at www.sedar.com for further details regarding such risks. Additional information, including key assumptions,
parameters and methods used to estimate the Mineral Reserves and Mineral Resources, will be provided in
the new technical report on the Georgia Lake Project to be published within 45 days of this press release.
ABOUT THE PLANT DESIGN
The Georgia Lake Concentrator is proposed to be constructed within the Nama Creek property approximately
160 km northeast of Thunder Bay, Ontario and 16 km south of Beardmore and accessed by the historic Nama
Creek Road. It is designed to convert spodumene pegmatite ore into spodumene concentrate via crushing,
DMS, and flotation. The basic process flowsheet was developed and subsequently optimised using data derived
from a number of metallurgical test work campaigns completed on drill core samples. The drill core samples
were taken from five spodumene bearing pegmatite veins from the resource called Main Zone North (MZN),
Conway (CON), Main Zone Southwest (MZSW), Harricana (HAR), and Line60 (L60).
It is expected that the Georgia Lake Concent rator will consist of a three -stage crushing circuit to reduce feed
to below 9.5mm. The first DMS stage is used to reduce the feed mass with a high rejection of low-grade coarse
material improving the overall plant feed grade. The second DMS stage is used to produce a coarse and fine
DMS concentrate product via re-crushing. The floats and fines material are milled and prepared for the flotation
circuits.
A standard rougher / cleaner spodumene flotation circuit follows the mica flotation stage, and will prod uce a
spodumene concentrate, ready for dewatering.
The process flowsheet for the Georgia Lake Concentrator has been designed to incorporate process unit
operations typical to spodumene concentrators using DMS and flotation, taking advantage of specific
properties of the Georgia lake deposit. Proven technology within the lithium industry was used to minimise
technical risk and time to market.
It is expected that the Georgia Lake Concentrator will be designed for a feed capacity of 150 t/h or 1,000,000
tpa. Key aspects of the Georgia Lake Concentrator are expected to include:
• Li2O content in feed of approximately 0.82 % Li2O
• Li2O content in concentrate approximately 6.0% Li2O
• Li2O overall recovery 80%
METALLURGICAL REMARKS
The test parameters for the PFS were based upon and designed to provide continuity and compatibility with
earlier results. Nagrom was engaged to carry out a three -phase metallurgical test program. Approximately 66
kilograms (kg) of ore composite from MZN deposit was selected for head assay sampling.
Both Heavy Liquid Separation (HLS) and Flotation were tested to produce a spodumene concentrate of target
grade 6.0% Li₂O. Variability testwork was also undertaken on samples from the satellite ore bodies (MZSW,
HAR, LIN60, and CON). For the PFS, a constant metal recovery of 80% is assumed with a concentrate
grade of 6%.