{"id":2840,"date":"2023-12-07T01:07:32","date_gmt":"2023-12-07T01:07:32","guid":{"rendered":"https:\/\/economicherald.net\/?p=2840"},"modified":"2023-12-07T01:07:32","modified_gmt":"2023-12-07T01:07:32","slug":"gt1-scopes-out-two-excellent-options-for-potential-us10-6bn-vertically-integrated-lithium-business","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=2840","title":{"rendered":"GT1 scopes out two \u2018excellent options\u2019 for potential US$10.6bn vertically integrated lithium business"},"content":{"rendered":"<p>Two development options come in at US$6bn and US$10.7bn in revenue<br \/>\nIRR of up to 54%<br \/>\n21-year mining lease granted for Seymour and 25% offtake committed for first 5 years<br \/>\nDefinitive feasibility study (DFS) underway for Seymour<br \/>\nFunding options also being assessed<\/p>\n<p>\u00a0<\/p>\n<p><strong><em>Special Report:<\/em> A pivotal Preliminary Economic Assessment (PEA) for Green Technology Metals\u2019 vertically integrated lithium projects in Ontario puts it another step closer to becoming Canada\u2019s next lithium producer.<\/strong><\/p>\n<p>In a staged strategy, <a href=\"https:\/\/stockhead.com.au\/resources\/24-5mt-and-counting-root-bay-now-gt1s-largest-lithium-deposit-after-25pc-resource-upgrade\/\"><strong>Green Technology Metals (ASX:GT1)<\/strong><\/a> is looking to become Ontario\u2019s first battery-grade lithium producer from a current resource of 24.9Mt at 1.13% Li2O across its Seymour and Root Bay projects.<\/p>\n<p>The vertically integrated Root Bay and Seymour projects, concentrators and conversion facility. Pic supplied: (GT1)<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>In the lead-up:<\/strong><\/h2>\n<p>GT1 made a <a href=\"https:\/\/stockhead.com.au\/resources\/one-of-canadas-most-advanced-lithium-explorers-now-has-24-9mt-in-the-bag-with-more-to-come\/\"><strong>recent increase in indicated resources at Seymour<\/strong><\/a>, taking the project\u2019s overall resources up to 10.3Mt at 1.03% Li2O and global inventory across both projects from 24.5Mt at 1.14% Li2O up to 24.9Mt at 1.13% Li2O.<\/p>\n<p>This follows the <a href=\"https:\/\/stockhead.com.au\/resources\/24-5mt-and-counting-root-bay-now-gt1s-largest-lithium-deposit-after-25pc-resource-upgrade\/\"><strong>25% resource upgrade of the Root Bay deposit<\/strong><\/a> and is another step forward for the company\u2019s goal of becoming Ontario\u2019s first battery-grade lithium producer via its Seymour and Root Bay projects.<\/p>\n<p>\u00a0<\/p>\n<h2><strong>PEA options<\/strong><\/h2>\n<p>Option 1 includes mine and concentrator development (Seymour and Root) producing saleable 5.5% spodumene concentrates.<\/p>\n<p>The combined metrics for the two mines and spodumene concentrators have been assessed for open pit mining with a 15-year life of mine (LOM) delivering:<\/p>\n<p>Average production of 207,000tpa @ 5.5% Li2O<br \/>\nInitial capex of US$162m<br \/>\nSecond phase capex of USD$351m<br \/>\nPost-tax NPV of US$1.19bn<br \/>\nIRR of 54%<br \/>\nLOM revenue of ~$US$6bn<\/p>\n<p>Option 2 covers the broader integrated project by adding the construction of a converter facility to produce lithium hydroxide and other spodumene concentrates.<\/p>\n<p>This includes the development of a lithium hydroxide conversion facility at Thunder Bay, which will take the 5.5% concentrate feed. Key metrics are:<\/p>\n<p>Average lithium hydroxide monohydrate production of 24,400tpa<br \/>\nInitial capex of $US800m<br \/>\nPost-tax NPV of US$1.132bn<br \/>\nIRR of 27%<br \/>\nLOM revenue of ~US$10.7bn<strong>\u00a0<\/strong><\/p>\n<p>These financial estimates assume a reasonably conservative US$2,029\/t for the 5.5% Li2O and include overall contingencies of US$58m for Option 1 and US$158m for the expanded Option 2.<\/p>\n<p>\u201cWe are pleased to deliver our PEA which initially includes the mines and concentrators in North-Western Ontario, confirming a strong NPV and robust project delivery strategy with low capital hurdles to get GT1 first into production in Ontario,\u201d GT1 CEO Luke Cox says.<\/p>\n<p>\u201cThe second part of the PEA includes the conversion of lithium concentrates to lithium chemicals which are currently unavailable in North America and will play a critical role in closing the supply chain from mine to electric vehicle, all Ontario-made.<\/p>\n<p>\u201cThe success of GT1\u2019s strategy includes collaboration between indigenous partners, communities, government, industry, and all stakeholders.<\/p>\n<p>\u201cWorking together, the actions in this strategy will build a stronger, more resilient business and promote local communities.\u201d<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>Next steps<\/strong><\/h2>\n<p>Following on from the assessment, GT1 will initiate three separate studies aligned with each project to enable a robust development timeline of:<\/p>\n<p>Stage 1 \u2013 Definitive Feasibility Study: Seymour Mine and Concentrator \u2013 Q2 2024<br \/>\nStage 2 \u2013 Preliminary Feasibility Study: Lithium Conversion Facility \u2013 Q4 2024<br \/>\nStage 3 \u2013 Preliminary Feasibility Study: Root Mine and Concentrator \u2013 Q2 2025<\/p>\n<p>Road to production. Pic supplied: (GT1)<\/p>\n<p>\u00a0<\/p>\n<h2><strong>Finance options<\/strong><\/h2>\n<p>The company intends to seek minority asset-level investment from strategic groups associated with the battery minerals supply chain in Ontario and surrounding jurisdictions, and has already commenced discussions.<\/p>\n<p>A debt funding packag, structured to complement the asset-level investments, with the cooperation of the selected strategic partners and their network of financiers, is the desired outcome.<\/p>\n<p>\u201cIt is expected this will also allow the opportunity for government funding schemes to participate through the various infrastructure and critical minerals initiatives currently being offered,\u201d GT1 says.<\/p>\n<p>\u201cThese include both Provincial and Federal Canadian government schemes, such as the Critical Minerals Infrastructure Fund (CMIF), Export Development Canada (EDC) and the Canadian Infrastructure Bank (CIB).\u201d<\/p>\n<p>\u00a0<\/p>\n\n<p><span class=\"mce_SELRES_start\">\ufeff<\/span>\u00a0<\/p>\n<p><em>This article was developed in collaboration with Green Technology Metals, a Stockhead advertiser at the time of publishing. <\/em><\/p>\n<p><em>\u00a0<\/em><\/p>\n<p><em>This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.<\/em><\/p>\n<p><span class=\"et_bloom_bottom_trigger\"><\/span><\/p>\n<p>The post <a href=\"https:\/\/stockhead.com.au\/resources\/gt1-scopes-out-two-excellent-options-for-potential-us10-6bn-vertically-integrated-lithium-business\/\">GT1 scopes out two \u2018excellent options\u2019 for potential US$10.6bn vertically integrated lithium business<\/a> appeared first on <a href=\"https:\/\/stockhead.com.au\/\">Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>Two development options come in at US$6bn and US$10.7bn in revenue IRR of up to 54% 21-year mining lease granted for Seymour and 25% offtake <a href=\"https:\/\/economicherald.net\/?p=2840\" class=\"read-more-link\">[more&#8230;]<\/a><\/p>\n","protected":false},"author":0,"featured_media":2841,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-2840","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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