The updated scoping study from () () (OTCMKTS: PDDTF) confirmed that the Carolina Lithium Integrated Project in the United States will be one of the largest and cheapest sustainable lithium hydroxide producers in the world. world.

The latest report is based on a mineral resource estimate, updated in April 2021, indicating that the project contains 39.2 million tonnes of 1.09% lithium hydroxide resource.

A by-product estimate, released earlier this week, suggests 7.4 million tonnes of quartz, 11.1 million tonnes of feldspar and 1.1 million tonnes of mica are also contained in the project.

Based on a project life of 20 years, the scoping study estimates that Carolina Lithium can produce 30,000 tonnes of lithium hydroxide each year, compared to 22,000 tonnes predicted in a 2020 scoping study.

Focus on sustainability

Piedmont Lithium President and CEO Keith Phillips said the company was “extremely pleased” with the updated results of the scoping study.

“The economics of our project continue to impress, but I am particularly proud of the sustainability profile of the project.

“Customers, investors and neighbors are increasingly focusing on companies that are ‘doing it right.’

“It is essential that raw material supply chains do not undermine the overall sustainability of our transition to electric vehicles.

“Our project will have a much smaller environmental footprint than alternative suppliers and we expect this to position Piedmont well with all stakeholders. “

To improve Carolina Lithium’s sustainability profile, Piedmont is working with a solar developer to build a solar farm that can meet all of the company’s electricity needs.

Piedmont also intends to use electrical equipment wherever possible, particularly in the transportation of ore – an activity that is particularly dependent on fossil fuels.

Finance

The Piedmont North Carolina lithium asset, located in Gaston County, is expected to bring in US $ 401 million annually in earnings before interest, taxes, depreciation and amortization (EBITDA). In the latest scoping study, the project was expected to bring in US $ 218 million in EBITDA per year.

A table indicating the evolution of the values ​​of the scoping study between 2020 and 2021.

Carolina Lithium’s after-tax net present value (NPV) has also increased significantly, now reaching US $ 1.92 billion. This is almost double the after-tax NPV of US $ 1.07 billion presented in the previous study.

The US project has an after-tax internal rate of return of 31% and a payback of 2.9 years, with lithium hydroxide production to cost the developer US $ 2,943 per tonne.

Overall, the estimated initial investment costs required to bring the project into operation are US $ 836.6 million.

This is an increase from the US $ 545 million deposited in 2020, and Piedmont explains the leap forward in the project’s scale changes, its environmental, social and governance initiatives and related adjustments. inflation.

Change in the estimated capital cost of the project between 2020 and 2021.

Next steps

Now, with a revitalized resource estimate and scope study in tow, Piedmont will focus on preparing for the final feasibility study for the Carolina Lithium project.

The company is also targeting a final investment decision in December 2021.

From there, Piedmont hopes to start design engineering and construction in Carolina in 2022, with mechanical completion slated for October of the following year.

If all goes as planned, the project will begin commissioning in December 2023.

Piedmont intends to expand its management team and explore partnership opportunities to prepare the Carolina Lithium project for production in order to move its plans forward.

Phillips said, “As we move forward to complete a definitive feasibility study for Carolina Lithium later in 2021, Piedmont has engaged Evercore and JP Morgan as financial advisors to assess potential strategic partnership and funding options for their project. in North Carolina.

“Given the project’s unique position as the only US spodumene project, with world-class scale, economy and sustainability, we expect the strategic interest to be strong. “