Grounded Lithium (TSXV: GRD; US-OTC: GRDAF) experienced a surge in its stock prices following the release of a promising preliminary economic assessment (PEA) for its Kindersley lithium project in western Saskatchewan. The assessment indicates a potential initial capital intensity of US$30,500 per tonne of lithium hydroxide monohydrate (LHM).
The projected all-in operating costs at the Kindersley Lithium project (KLP) stand at US$3,899 per tonne of LHM, resulting in an estimated annual expenditure of US$42.9 million.
Phase one of the KLP demonstrates an after-tax internal rate of return (IRR) of 48.5% and an after-tax net present value (NPV) of US$1 billion at an 8% discount rate. The project requires an initial capital investment of US$335 million, with a payback period of 3.7 years.
The PEA is based on an annual production output of 11,000 tonnes of LHM, assuming a sales price of US$25,000 per tonne.
Grounded Lithium highlights that the project’s economics compare favorably to other North American brine-based lithium ventures producing battery-grade LHM. Moreover, the project has the potential for future phases.
Gregg Smith, the president and CEO of Grounded Lithium, expressed confidence in the independent economic results of phase one, considering capex and opex perspectives. He added that the positive PEA outcomes pave the way for critical future steps, including the completion of a field pilot with Koch Technologies Solutions’ extraction process and undertaking essential field activities to provide higher certainty on resources leading to a pre-feasibility study.
The first phase at KLP will involve the development of 24 of Grounded’s 300 sections of lithium rights, with the remaining sections supporting the development of future project phases.
As of mid-day in Toronto, the company’s shares were up almost 7% to 16¢ apiece, valuing the company at $11.1 million. The shares have traded within a 52-week window of 13¢ and 50¢.
