On 2 October 2018, Rock Tech Lithium Inc (V:RCK) announced the results of a preliminary economic assessment (PEA) at its flagship 100%-owned Georgia Lake lithium property in the Thunder Bay mining district of northwest Ontario. Compiled by international mining consultants, DMT, the highlights of the PEA were pre-production capex of C$65.3m, annual steady state EBITDA of C$64.2m, an 11-year mine life, a pre-tax IRR of 62.2%, a 3.5-year payback period and a post-tax NPV8 of C$210m.
Small but high grade
Earlier this year, the company announced an upgraded mineral resource estimate of 13.29Mt at a grade of 1.09% lithium oxide (at a relatively conservative 0.65% cut-off grade), of which 49% is in the Measured and Indicated categories. RCK also believes that there is at least another 2.5–3.0Mt of lithium-bearing pegmatite mineralisation in the prospect, representing material defined in historical resource estimates, but yet to be drilled to NI 43-101 standards, plus new discoveries.
Future blue-sky upside potential
RCK took a conservative approach to the PEA, focusing on only a portion of the project, centred around the Nama Creek Main Zone, representing just 73% of the total mineral resource estimate. The production scenario envisaged producing 1.1Mt of 6.2% Li2O chemical grade spodumene concentrate over 11 years at a rate of 96,000tpa. However, it excluded additional Inferred resources on other areas of the property and, with new discoveries made seemingly every exploration season, there is therefore ample potential for future mine-life extension.
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