Clean TeQ Holdings (ASX: CLQ) has confirmed the economic viability of its flagship Sunrise project in New South Wales, with the definitive feasibility study projecting US$14 billion in life-of-mine revenue to produce scandium, nickel and cobalt sulphate products for the growing electric vehicle sector for more than 25 years.
The definitive feasibility study has revealed around 2 million tonnes of nickel sulphate could be produced from Sunrise, along with 400,000t of cobalt sulphate over the first 25 years.
Meanwhile around 80tpa of scandium oxide is anticipated from the project for 10 years.
Under the study, Clean TeQ will use its proprietary Clean-iX processing technology to extract nickel and cobalt to generate more than US$14 billion in revenue and annual earnings before interest tax depreciation and amortisation of US$344 million.
However, a pre-production capital expenditure of US$1.33 billion is required to bring the project online.
The definitive feasibility study assumes a nickel price of US$7 per pound, with an extra US$1/lb premium for sulphate product, while the cobalt price is estimated at US$30/lb.
“Our entire team are delighted that the results confirm Clean TeQ’s Sunrise’s position as a globally important source of high purity raw materials to the lithium-ion battery market, which are primarily composed of nickel and cobalt sulphate on the critical cathode side of the battery,” Clean TeQ co-chairman Robert Friedland said.
“Technological disruption in electrically driven transportation and energy storage is accelerating. Nickel and cobalt sulphate and scandium are expected to be in massive demand as the world rapidly transitions towards a future dependent on renewable energy and the electrification of global transportation systems,” he said.
The company estimates it will produce enough nickel and cobalt sulphate to underpin the manufacture of 500,000 electric vehicles per annum.
“Clean TeQ Sunrise is positioned to be a modern and sustainable mining operation producing products which are critical to the clean energy revolution,” Clean TeQ chief executive officer Sam Riggall said.
“The global environmental issues caused by the unconstrained burning of fossil fuels in the world’s transport sector are profound,” Mr Riggall noted.
“Being part of the solution is a core objective of Clean TeQ and a driver of our strategy to develop Sunrise.”
Following the definitive feasibility study results, Clean TeQ plans to finalise offtake arrangements for its planned production.
The company also hopes to make an official investment decision to develop the project after securing financing by the end of the year, with construction pencilled in to start in 2019 and commissioning to begin in late 2020 or early 2021.
As part of the project development, Clean TeQ anticipates 1,000 people will be required during construction, while 300 people will be needed to maintain an operating mine.
Clean TeQ estimates it will fork out A$2.2 billion in corporate taxes and a further A$630 million in state royalties and payroll tax over the 25-year term.
“As well as the considerable financial benefits from royalties and taxes paid by the project, there will be a strong community dividend in the form of employment opportunities, community enhancement contributions and infrastructure upgrades,” Mr Riggall added.
By midday, Clean TeQ’s share price had slipped more than 10% to A$0.955.