Estimated Project pre-tax IRR of 26.1%; NPV of US$1.253 billion (at 8% discount rate)
Revenues are based on a flat US$11,000/t for battery grade Li2CO3 over LOM, significantly below the current Li2CO3 price range of US$12,000 – 20,000/t2,3
Low estimated LOM operating costs of US$3,910/t of Li2CO3 – lower than the new lithium brine operations being reported in Argentina
Average LOM annual EBITDA estimated at US$229 million per annum
Sonora: a large lithium deposit
Measured plus Indicated Mineral Resource estimate of over 5 million tonnes (‘Mt’) (‘LCE’)4 and an additional Inferred Mineral Resource of 3.7 Mt of Lithium Carbonate Equivalent
Low stripping ratio: open-pit mine design indicates a total of 37.1 Mt of ore to be mined over the planned 19-year mine life with an average stripping ratio of approximately 3.4:1 over LOM
Conventional flow sheet: uses established sulphate route processing technology
Integrated plant designed to initially process 1.1Mt of ore per year during Stage 1, subsequently increasing to 2.2 Mt per year for Stage 2
Stage 1 capital cost estimate of US$420 million includes – mining, processing plant, infrastructure, construction of Tailings Management Facility (‘TMF’), general administration costs as well as the requisite contingencies
The Mineral Resource Estimate (“MRE”) for the Sonora Lithium Project was reported using a cut-off grade of 1,000 ppm lithium and was contained within a pit shell based on reasonable optimization parameters . Mineral Resources are stated inclusive of Mineral Reserves.
The Mineral Reserves for the Sonora Lithium Project was reported using a cut-off grade of 1,500 ppm lithium and comprised of a Probable Mineral Reserve of 244 MT averaging 3,480 ppm Li for 3.5 Mt of LCE.
DECEMBER 2017 LITHIUM MINERAL RESOURCE STATEMENT
Clay Tonnes (Mt)
Clay Grade – Li ppm
Clay Grade – K%
DECEMBER 2017 LITHIUM MINERAL RESERVE STATEMENT
Clay Tonnes (Mt)
The Sonora Lithium Project and Details of Cadence Ownership
Cadence owns a direct interest of approximately 7% of Bacanora. The Sonora Lithium Project is comprised of the following lithium properties:
La Ventana and La Ventana 1 concessions, which are 100 per cent. owned by Minera Sonora Borax S.A. de C.V.(“MSB”), a wholly-owned subsidiary of Bacanora; Cadence Minerals, through its direct interest of 7% of Bacanora, has an indirect interest in these concessions of 7 %.
El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions, which are held by Mexilit S.A. de C.V. (“Mexilit”). Cadence has a 30% direct interest in Mexalit through its Joint Venture with Bacanora, and when combined with Cadences’ direct interest of 7% in Bacanora, has a total economic interest in Mexalit of 35%.
Projects Outside the Sonora Lithium Project
Cadence also owns a 30% direct interest in The Megalit, Buenavista, and San Gabriel concessions, which are held by Megalit S.A de C.V (“Megalit”) which when combined with Cadences’ direct interest of 7% in Bacanora, has a total economic interest in Megalit of 35%.
These areas are not part of the mining plans of the Sonora Lithium Project and have not been assessed in sufficient detail to provide a 43-101 compliant Mineral Resource Estimate.