Sayona Mining confirms $2.2b NPV from North American Lithium restart

By Imelda Cotton - April 17, 2023

Sayona Mining Piedmont North American Lithium Lithium Quebec joint venture definitive feasibility study ASX SYA PLL — The definitive feasibility study confirms the Abitibi lithium hub’s long-term viability.

North American lithium producer Sayona Mining (ASX: SYA) has completed a definitive feasibility study (DFS) combining its flagship North American Lithium (NAL) operation in Canada and the nearby Authier lithium project.

The two developments are a part of Sayona Québec, which is owned in joint venture by Sayona Mining (75%) and Piedmont Lithium (ASX: PLL, 25%).

The DFS estimates a $2.2 billion pre‐tax net present value (8% discount) for spodumene concentrate produced from the combined project and demonstrates the Abitibi lithium hub’s long‐term financial and technical viability.

It represents a substantial increase on the net present value in NAL’s pre-feasibility study released in May last year.

The operation is expected to generate an estimated total net revenue of $7.6 billion with EBITDA (earnings before interest, taxation, depreciation and amortisation) of $3.7 billion.

Restart program

Improvements in estimated project financial returns have been driven by an accelerated restart program, increased estimated head grade of 1.04% lithium oxide, high initial recovery rates (70.2%) and expanded life of mine average annual concentrate production of around 190,000 tonnes (up 16% compared to the pre-feasibility study), together with higher spodumene concentrate pricing.

Sayona said the restart has been tracking on schedule and within budget, with the operation already having produced more than 3,000t of saleable spodumene concentrate as of 31 March.

The first lithium shipment is expected to occur in July, with Sayona targeting production between 85,000t and 115,000t during the latter half of the year.

NAL’s production capacity will comprise 226,000t per annum for the next four years until the commencement of downstream operations, subject to joint venture approval.

Drilling campaign

The current life of mine has been estimated at 20 years; however, Sayona said there is high potential to extend this with a 50,000m drilling campaign scheduled for this year.

The first phase of this program will comprise approximately 16,000m and primarily target a conversion of inferred resources to indicated within the current pitshell footprint.

A component for exploration along the northwest and southeast strike extensions of the NAL deposit is also part of the program.

Long-term value

Sayona managing director Brett Lynch said the positive DFS reaffirmed the company’s confidence in the long‐term value of the NAL operation.

“This study demonstrates the benefits of our hub strategy at Abitibi, with NAL proving to be one of the lowest cost and highest returning investments in the lithium industry,” he said.

“We are now in the process of de-risking the operation, which will generate long‐term, sustainable returns for shareholders and provide new jobs and investment for Québec.”

Sayona is moving towards downstream processing as it aims to become the first fully-integrated, low-carbon footprint lithium chemical producer for delivery into North America.

“The growing number of battery and electric vehicle investments planned for Québec demonstrate the strategic location of our operation, which benefits from access to sustainable, low‐cost hydropower together with world‐class infrastructure, skilled labour and proximity to key battery markets,” Mr Lynch said.

“NAL will represent the most significant source of hard rock lithium production in North America, boosting Québec’s plans for the development of a local battery sector from mining to manufacturing.”