With an initial $493-million investment, Cypress Development‘s Clayton Valley lithium project in Nevada could produce 27,400 tonnes lithium carbonate equivalent (LCE) per year over a 40-year mine life, according to a prefeasibility study released this week.
At an 8% discount rate, the project has an after-tax net present value of $1.1 billion, an internal rate of return of 25.8%, and a payback period of 4.4 years.
“This PFS is a major milestone for Cypress,” said Cypress CEO Bill Willoughby in a release.
“These positive results take us closer to our goal of developing a world-class lithium deposit. Cypress’s land position and resources afford us the opportunity for a long-life project with low operating costs and potential to be a significant source of lithium for the United States.”
An average LCE price of $9,500 per tonne was used in the study, which projects a low cash cost of $3,329 per tonne LCE.
Reserves at Clayton Valley are contained in a leachable lithium-bearing claystone.
The deposit is large, at surface, and flat-lying, which will allow for a very low strip ratio (0.15:1) and means no drilling or blasting is necessary in mining. The study envisions a mining rate of 15,000 t/d.
The project is located next to North America’s only lithium brine operation, the Albemarle Silver Peak mine.
The project is located next to North America’s only lithium brine operation, the Albemarle Silver Peak mine.
The lithium in the deposit is amenable to leaching with dilute sulphuric acid leach followed by filtration, solution purification, concentration, and electrolysis to produce lithium hydroxide.
Cypress reports that metallurgical leach tests have demonstrated an average of 86.5% extraction of lithium into solution and 126.5 kg/t for acid consumption.
Metallurgical testing indicates low cost processing can be achieved by leaching with low acid consumption and high lithium recovery.
Self-generated power from a 2,500 t/d acid plant is included in the project’s costs.
The Vancouver-based junior says testing to recover the lithium from solution has been successful, with the production of a concentrated lithium solution suitable for producing lithium hydroxide.
Before moving to the feasibility and permitting stage, the next step for Cypress will be a pilot plant study, estimated to cost US$6.75 million.
Production figures are based on a probable reserve of 222 million tonnes grading 1,141 ppm lithium for 1.4 million tonnes LCE, calculated at a 900 ppm lithium cutoff grade.
Midday Thursday, Cypress’ stock was up 2.4% on the TSXV. The company has a C$18.9 million market capitalization.
(This article first appeared in the Canadian Mining Journal)