LithiumBank hikes Boardwalk project value by $600 million
Shares in Alberta-focused LithiumBank Resources (TSXV: LBNK) rose almost 10% Friday after an updated study added $600 million in value to its Boardwalk project and cut costs by a third.
The after-tax net present value (at an 8% discount) for Boardwalk is now pegged at $2.3 billion, with an after-tax internal rate of return of 20.6%, according to an updated preliminary economic assessment (PEA) released on Thursday.
That’s up from the after-tax NPV of $1.7 billion and IRR of 17.8% in the initial PEA, released in May. The payback period has been cut from 4.1 years to 3.5 years, on a pre-tax basis.
Company shares hit C$0.90 apiece in Toronto on Friday afternoon, valuing the company at C$39.4 million. Its shares traded in a 52-week range of C$0.72 and C$1.72.
Greenview Resources’ (G2L) direct lithium extraction (DLE) technology will enable lithium recovery of 98% at Boardwalk, LithiumBank said. G2L’s technology uses reagents that cost one-third less than those used in the May PEA.
“Updating the Boardwalk PEA to incorporate our licensed technology from G2L to further enhance the asset is an important part of our development strategy,” said LithiumBank CEO Rob Shewchuk. “Our goal is to provide de-risked, construction-ready direct lithium brine projects to major developers. Boardwalk is the most advanced to date, but we will continue to apply our model to the rest of our portfolio to create attractive, buildable assets.”
Brine hotspot
The update comes as lithium brine activity picks up on the Prairies, despite a drop in lithium prices. In Alberta, E3 Lithium (TSXV: ETL) and Volt Lithium (TSXV: VLT), also plan to deploy DLE technology at their projects. In neighbouring Saskatchewan, uranium-focused Denison Mines (TSX: DML; NYSE: DNN) has optioned Grounded Lithium‘s (TSXV: GRD) Kindersley project, while EMP Metals (CSE: EMPS) is advancing its own lithium brine project.
Operational costs are now estimated to be $4,588 per tonne of lithium hydroxide monohydrate (LHM), at an assumed lithium price of $26,000 per tonne, 34% lower than the $6,807 per tonne in the initial PEA.
Lithium carbonate, a precursor to lithium hydroxide used in electric vehicle batteries, sat at 101,500 yuan ($14,105) per tonne on Friday, down from about 170,000 yuan in September, according to Trading Economics.
The update also raises production over the project’s 20-year life to 34,005 tonnes per year, compared to 31,350 tonnes in the May PEA.
Construction costs for the operation – outlined in the initial PEA – come to almost $2.1 billion, including a $575 million processing plant, $276 million for brine wellfield services, $265 million for other infrastructure and $360 million for contingencies.
The company expects Boardwalk, located about 350 km northwest of Edmonton near Valleyview, to also produce high-grade lithium sulphate (Li2SO4) eluate at a concentration of 3,238 mg per litre.
Power could be generated on-site using gas turbines that would also lower the project’s carbon footprint, LithiumBank said. The proposed turbines can run on 80% hydrogen when a reliable supply is available.
Commercial production is possible within three years under provincial permitting rules, LithiumBank said.
The company anticipates converting the inferred resource estimate at Boardwalk to measured in the coming months, and commissioning its 10,000-litre-per-day lithium brine pilot plant being assembled in at its Calgary facility.
LithiumBank’s other main focus is its 5,687-sq.-km Park Place lithium brine project about 50 km south of Boardwalk.
A hydrogeological study conducted at Park Place in February 2023 indicates its 76.3 billion cubic metres of lithium-bearing brine is the largest by volume held by a single operator in North America. The brine is contained within the 6,563-sq.-km Crown mineral rights-only land package that includes infrastructure and geological data from decades of oil and gas activity.