Lithium Universe Ltd (ASX:LU7) Quarterly Activities Report

10/31/2024 4:38:45 AM

(MENAFN- ABN Newswire)

Lithium Universe Ltd (ASX:LU7) (FRA:KU00) (OTCMKTS:LUVSF) recently announced the results of its Preliminary Feasibility Study (PFS) for the Becancour Lithium Carbonate refinery in Quebec, Canada. The PFS confirms the viability of a strong lithium conversion project, even within a below-average pricing environment.
The Company plans to build a reliable, low-risk lithium conversion refinery with an annual capacity of up to 18,270 tonnes, utilizing proven expertise from the Jiangsu processing model.
The facility will produce environmentally friendly, battery-grade lithium carbonate. The Company aims to establish a Canadian-based lithium chemicals business, purchasing spodumene feedstock from both domestic suppliers and international markets, including Brazil and Africa and producing a battery grade lithium carbonate product.
This aligns with the Company's broader vision of contributing to the North Atlantic lithium supply chain and closing the Lithium Conversion Gap. The project's economics are highly favourable, even with conservative price assumptions. The refinery is economically viable with a pre-tax Net Present Value (NPV) of approximately US$779 million, using an 8% discount rate, and a pre-tax Internal Rate of Return (IRR) of around 23.5%.
The payback period is estimated at 3.5 years. The financial model is built on cautious price forecasts of US$1,170 per tonne for spodumene concentrate (SC6) and US$20,970 per tonne for battery-grade lithium carbonate equivalent (LCE).
LU7's directors believe they have a reasonable basis for using the assumed price in the study of US$20,970 per tonne for battery grade lithium carbonate. Key operational assumptions include 86% plant availability and 88% lithium recovery.
At full production capacity, the project is expected to generate approximately US$383 million in annual revenue, with costs totalling around US$236 million, leading to an annual EBITDAof approximately US$147 million and a gross margin of in the region of 38%. Post-tax, the NPV at an 8% discount rate is estimated at approximately US$501 million.
The capital cost for the project is estimated at US$494 million, which includes a contingency of US$68 million. The capital cost estimate is based on advanced design specifications from the Jiangsu Lithium Refinery model, ensuring robust financial planning and projection.
These factors highlight the project's strong financial viability, even under conservative pricing conditions.
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Alex Hanly Chief Executive Officer Lithium Universe Limited Tel: +61 448 418 725 Email: ... Iggy Tan Chairman Lithium Universe Limited Email: ...

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