Preliminary Feasibility Study of Keliber’s Lithium Project

Keliber Oy (“Keliber”) has completed the preliminary feasibility study (“PFS”) for its Lithium project in Finland. Based on the economic analysis in the PFS, the Lithium project is, with current assumptions and knowledge, clearly profitable.

Please find a link to the PSF report (pdf file) and its appendices from the bottom of this page.

Preliminary Key Figures and Conclusions

Two production scenarios have been analysed. The 6,000 t/a lithium carbonate production scenario was calculated using the feed of 275 000 t ore per year. The 9000 t/a lithium carbonate production scenario was calculated using the feed of 400 000 t ore per year. The key economical results of the both production scenarios are presented in the table below.

The Key economical figures of different production capacity scenarios
Economical figures Li₂CO₃ production 6000 t/a Li₂CO₃ production 9000 t/a
Plant capacity ore [t/a] 275 000 400 000
Operative time [years] 16.2 11.2
Basic investment [M€] 152 164
Keliber company CAPEX [M€] 43.6 43.6
Mine investment (CAPEX) [M€] 17.0 17.0
Plant investment (CAPEX) [M€] 148.3 160.5
Rehabilitation CAPEX [M€] 3.8 3.8
Mine OPEX (over the operative time) [M€] 156.6 156.6
Plant OPEX (over the operative time) [M€] 224.3 224.3
Sales (over the operative time) [M€] 865 800
Payback time from start-up Approx. 7 years Approx. 4 years
Return on investment (ROI) 105 % 100 %
Net present value (NPV), @ 8 % [M€] 51 97
Internal rate of return (IRR) 13 % 21 %

Keliber’s Lithium project is estimated to be profitable with both the presented capacities. The increase in the basic investment in the 9000 t/a lithium carbonate scenario is limited because there is no need for additional equipment. The investment increase comes mainly from the bigger grinding mill and from the additional capacity in leaching and from the CHP (combined heat and power) plant. Increasing of capacity to 9000 t/a lithium carbonate production clearly improves the economy of the project and this capacity level will be the base for the forthcoming Bankable Feasibility Study.

Olle Sirén, CEO of Keliber Oy, comments: “We are very pleased that we have now passed the important PFS milestone for the lithium project. Going forward, further financing will be a top priority in order to progress the project through the bankable feasibility phase. The PFS shows clearly that our Lithium project is an attractive investment. We hope that production can start late 2018 or early 2019.”

Main Assumptions

The battery grade (min. 99.5 % Li₂CO₃) is expected to compose 90 % of the lithium carbonate production. The rest 10 % of production is expected to sold as high-purity battery grade (min. 99.9 % Li₂CO₃).

The consultancy company, SignumBOX has provided price forecasts for battery grade (min. 99.5 % Li₂CO₃) and high-purity battery grade (min. 99.9 % Li₂CO₃) for the calculations. SignumBOX is considered to provide independent, reliable consultant services of the topic. The price assumptions date from November 2015. Analcime and tantalum prices were taken from USGS Minerals Information databases for zeolites and tantalum. The exchange rate used in the calculations is 1.00 € = 1.0886 $.

The study has been compiled, assessed and approved by the independent consultancy group Sweco Industry Finland Oy. The Ore Reserves, mine design and scheduling was prepared by the Competent Persons Mr. Markku Meriläinen, MAusIMM and Mr. Pekka Lovén, MAusIMM of Outotec (Finland) Oy.

Outotec (Finland) Oy provided together with Sandvik Mining and Construction Oy and Sweco Industry Finland Oy (“Sweco”) the processing equipment lists and processing Capex and Opex cost estimates. Destia Oy (“Destia”) prepared the original mine site infrastructure design and preparation of capital cost estimate. Sweco reviewed the Destia plans and updated the layouts and the capital cost estimates. Destia made a study about the existing road connections to the mine sites. In Destia study both investment costs and transportation costs were calculated. KPA Unicon and Korpelan Voima Oy provided electricity and energy production related Capex estimates. An independent lithium market consultant signumBOX Inteligancia de Mercados (“signumBOX”) prepared the lithium market evaluation including the lithium carbonate price estimations.

Mineral Resource and Ore Reserve estimates

Markku Meriläinen, MAusIMM and Pekka Lovén MAusIMM of Outotec (Finland) Oy, both Competent Persons as defined by Joint Ore Reserves Committee (“JORC”) prepared the Mineral Resource and Ore Reserve estimates. The Mineral Resource and Ore Reserve estimates comply with the recommendations in the 2012 edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC-code). A summary of estimated deposit Mineral Resources and Ore Reserves is shown in following table.

Mineral Resource and Ore Reserve summary of the estimated deposits
Deposit Resource class Tonnage Mt Li₂O % Reserve class Tonnage Mt Li₂O %
Syväjärvi Indicated 1,53 1,35 Probable 1,48 1,19
Inferred 0,19 1,32
Rapasaari Indicated 1,81 1,25 Probable 1,75 1,09
Inferred 0,16 1,30
Länttä Measured 0,44 1,10 Proven 0,47 0,95
Indicated 0,91 1,04 Probable 0,54 0,93
Meas. + Ind. 1,35 1,06 Prov. + Prob. 1,01 0,94
Outovesi Indicated 0,28 1,40 Probable 0,25 1,20

The Mineral Resources have been estimated using 0.5 % Li₂O cut-off grade. Ore Reserves are included in the Mineral Resources.

The used ore loss is 5 % and waste rock dilution 15 % for all the estimated reserves. The Ore Reserves have been reported using the cut-off grade of 0.5 % Li₂O. The total Proven and Probable Ore Reserves are 4.49 Mt at 1.10 % Li₂O. The Keliber mining operations will consist of open pit mining only. No Inferred Mineral Resources are used in the estimation of the Ore Reserve. The Ore Reserve is the portion of the Mineral Resource that has been identified as mineable within a design pit.

Spodumene concentrate and the lithium carbonate production

Design basis for Keliber’s spodumene concentrator is to produce flotation concentrate containing 4.5 % Li₂O for downstream lithium carbonate production process. The flow sheet of the spodumene concentrator includes crushing, grinding and classification, magnetic separation, gravity concentration, pre-flotation with two staged desliming cyclone units, spodumene flotation and dewatering of the concentrate.

Keliber and Outotec have been developing the pressure soda leach process to produce lithium carbonate from the spodumene concentrate. The lithium carbonate production plant unit processes consists spodumene calcining in rotary kiln (conversion), pressure leaching, bi-carbonization, polishing filtration and ion exchange, Li₂CO₃ crystallization, lithium carbonate powder jet milling and packing.

Process tests have confirmed the lithium recovery of 85.3 % to lithium carbonate product from the spodumene concentrate for Länttä material. The preliminary tests with Syväjärvi ore have confirmed over 95 % lithium yield into solution. The average grade of the lithium carbonate produced from the Länttä test program varied between 99.67–99.91 %.

Kaustinen, 14 March 2016
Olle Sirén
CEO, Keliber Oy

For further information
Markku Isohanni
Chairman of the Board of Directors
tel. +358 40 8615 360