Volt Lithium (TSXV: VLT) has released a preliminary economic assessment (PEA) for its Rainbow Lake lithium brine project in northwest Alberta. The company gives the project a net present value with an 8% discount of $1.5 billion and an internal rate of return of 45% before taxes.
Even after taxes, the project has an NVP of $1.1 billion and an IRR of 35%. The PEA assumed a price of $25,000 per tonne of lithium hydroxide monohydrate (LHM).
Volt owns lithium rights across 175,000 hectares of land. The PEA outlines annual production beginning at 1,000 tonnes and rising to over 23,000 tonnes of battery-grade LHM over a 19-year period.
Rainbow Lake has a three-phase development plan. Phase 1 will produce 1,000 t/y with a lithium grade of 92 mg/L from the Muskeg formation. Phase 2 will boost output to 5,000 t/y, again from the Muskeg formation. Phase 3 will see production expanded to 23,000 t/y of LHM from both the Muskeg and Keg River formations.
Capital expenditures are $60 million for Phase 1, $242 million for Phase 2 and $946 million for Phase 3. Add in the processing facility, administration, infrastructure, and contingency, and the total capex is $1.5 billion.
Brines will be treated using Volt’s proprietary direct lithium extraction (DLE) method, referred to as IES-300. The technology was successfully tested during the company’s pilot program in the second quarter of 2023 and was used as the basis for the PEA.
“We are very pleased with the results of the PEA,” said Alex Wylie, president and CEO of Volt. “Volt’s focus on extracting lithium from oilfield brines allows for significant project returns and economics that will allow Volt to grow its lithium production in a measured and responsible way.”
