Ioneer (INR)
Rhyolite Ridge
The Rhyolite Ridge Pre-Feasibility Study (“PFS”) was completed in October 2018. The Executive Summary of the comprehensive PFS is available here.
The PFS results affirm the Project’s scale, globally competitive forecast cash operating costs, robust operating margins, long life and exceptional economic returns – highlighting its capacity to take full advantage of the current and future expected demand for lithium and boron raw materials over the coming decades.
Rhyolite Ridge is forecast to become the largest lithium producer in the United States and the world's lowest cost lithium producer:
- Low-cost lithium producer at US$1,796/tonne of lithium carbonate (with boric acid credit)
- Production from 2021 with > 30 year mine life with opportunity to extend and expand
- Producing 20,200 tonnes of lithium carbonate and 173,000 tonnes of boric acid per year
At this initial scale, Rhyolite Ridge will become a globally significant producer of both lithium and boron.The PFS envisages processing lithium-boron (Searlesite) mineralisation and stockpiling the lithium only (clay) mineralisation. The 79 millon tonnes of ore processed over the life of mine is entirely sourced from the current Indicated Mineral Resource.The chart below clearly shows the sizeable margin between revenue and operating costs (in US$'s per tonne of ore processed), even at very conservative prices of US$10,000/tonne for lithium carbonate and US$700/tonne for boric acid.The above chart also clearly shows that boric acid revenue approximates total site operating costs.The PFS financial outcomes are very attractive:Sale prices used in the PFS financial model were:
- Lithium carbonate (CIF China) from US$12,693/tonne (Year 1) to $16,862/tonne (Year 7 onwards)
- Boric acid (CIF Asia) - US$700/tonne flat over the life of mine
The initial capital expenditure of US$599 million includes indirect costs, contingency and US$173 million for a lump sum turnkey sulphuric acid plant.
This initial capital cost equates to a capital intensity of US$18,600/tpa lithium carbonate equivalent (“LCE”), which is very competitive. Capital intensity for integrated projects (mine to saleable lithium end-product) typically ranges from $15,000 to $25,000/tpa LCE. The chart below summarises the outcomes of a high-level assessment of capital costs for various throughputs.
Note: LCE based on prices of US$10,000/tonne for lithium carbonate and US$700/tonne for boric acid.
This assessment demonstrated that the plant is scalable based on the acid plant size and that the plant has significant economies of scale. The initial capital costs ranges from $421 million for an operation processing 1.5Mtpa of ore through to $674 million for 3.6Mtpa. At 3.6Mtpa throughput the operation would produce 44ktpa LCE (lithium carbonate plus boric acid).
The PFS was conducted by independent and globally recognized engineering firm Amec Foster Wheeler (part of Wood plc).
The Rhyolite Ridge Definitive Feasibility Study is scheduled to be completed in Q3 2019. Initial production of lithium carbonate and boric acid is forecast for 2021.
Further information on the PFS is available in Company announcement titled "Outstanding Results from Rhyolite Ridge Pre-Feasibility" released 23 October 2018.
