Zinnwald-Lithium-Project
Zinnwald – 50% interest and joint operational control
Zinnwald is an advanced, integrated lithium project in the heart of Europe designed to produce a suite of value-added downstream battery-grade lithium products. With a DFS completed, a mine life of 30 years, which equates to < 50% of the current identified mineral resources, approved mining licence, strong economics showing a potential NPV of €428m, IRR of 27%, and 46% EBITDA margin, the Company aims to fast-track the project to production.
Location
The project is located 35 kms from Dresden in the heart of the European chemical and automotive industries on the border with the Czech Republic in an historic granite hosted Sn/W/Li belt. This developed area has historically been mined for tin, tungsten and lithium over the past 400 years and has good infrastructure, services, facilities, and access roads. Power and water supply are guaranteed from existing regional networks.
Feasibility Study
The Zinnwald Feasibility Study (PDF) was published in June 2019 and confirmed the positive economics for the production of 5,112tpa (~7,285 tpa Lithium Carbonate Equivalent) of battery-grade lithium fluoride at Zinnwald, with pre-tax NPV of €428 million (8% discount rate), IRR of 27.4% and 46% EBITDA margin.
| ANNUAL PRODUCTION LITHIUM | 7,285 t.p.a. LCE2 |
| ANNUAL PRODUCTION K2SO4 | 32,000 t.p.a. |
| PROJECT LIFE | 30 years |
| TOTAL JORC RESOURCE | 757,144 tons LCE (665,238 M&I) |
| CONSTRUCTION CAPITAL COSTS | €159 million3 |
| CONSTRUCTION PERIOD | <24 months |
| NET PRESENT VALUE (PRE-TAX) | €428 million (@8%) |
| AVERAGE LOM ANNUAL EBITDA ESTIMATE | €58.5 million per annum |
| BASE CASE 30YR REVENUE AND EBITDA | €3.86 billion and €1.75 billion respectively |
| IRR (PRE-TAX) | 27.4% |
1 Figures shown for 100% of the Project per the DFS dated [10 September 2020]
2 Whilst the DFS is based solely on the production of lithium fluoride, DL has established the possibility to produce battery-grade lithium carbonate directly from the lithium mica concentrate with only minimal modifications to the chemical plant circuits. The same applies to a possible LiOH⋅H2O production.
3 In order to produce Li2CO3 additional capex of €2 million is estimated
Deposit
An updated NI 43-101 Resource Report was published in 2018:
- Measured plus Indicated Mineral Resource estimate containing 35.51 Mt at a grade of 3,519 ppm containing 124,974 t Li at cut-of grade of 2,500 ppm Li
- Represents 660,000 tonnes of lithium carbonate equivalent (‘LCE’) , comprising 357,000 tonnes of LCE in Measured Resources and 307,000 tonnes of Indicated Resources
- Estimated Inferred Mineral Resources of 4.87 Mt at a grade of 3,549 ppm containing 17,266 t Li metal (approx. 91,000 tonnes LCE)
Lithium Mineral Resource estimate of the Zinnwald Lithium Deposit
| Resource classification* | Ore tonnage (000t) | Mean Li grade (ppm) | Contained LCE (tonnes) |
|---|---|---|---|
| Measured | 18,510 | 3,630 | 357,659 |
| Indicated | 17,000 | 3,399 | 307,579 |
| Inferred | 4,865 | 3,549 | 91,906 |
| Total (Measured + Indicated) | 35,510 | 3,519 | 665,238 |
| Total Inferred | 4,865 | 3,549 | 91,906 |
(* Vertical thickness ≥ 2 m, cut-off Li = 2,500 ppm)
Notes : Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
In addition to the mining licence in relation to the project, two other exploration licences are 50% held by the Company; the Falkenhain licence (covering 295.7 ha and with a 5-year term to 31 December 2022) and the Altenburg licence (covering 4,225.3 ha and with a 5-year term to 15 February 2024). These exploration licences for lithium deposits have the potential to significantly increase Zinnwald’s resource base and Project life.
Mining Operation
The mining operation for the Project is planned as an underground mine development using a decline for the access to the mine and crushing and grinding of ore to produce ~132,000 tpa of Zinnwaldite concentrate.
Processing Plant
The project will adopt a conventional flow sheet using the established sulphate route processing technology.
The process plant design comprises a pre-concentration stage to produce an initial concentrate prior to roasting. The concentrate is subsequently heated in a kiln, at approximately 950 degrees Celsius, in combination with limestone and gypsum. Following roasting a hot water leaching step recovers lithium and after removal of contaminations lithium fluoride (LiF) is precipitated using potassium fluoride. LiF is filtered and packaging, to produce a >99.5% LiF final battery grade product. The integrated plant has been designed to initially process 522,000 t of ore per year (average of first 5 years of production), producing 5,112 tpa of lithium fluoride, (7,285tpa LCE). The plant will scale up to process up to 600,000 tonnes of ore per year over the life of the mine.
The plant design also includes a circuit to produce up to 32,000 tpa of K2SO4/SOP by-product through a series of evaporation and precipitation stages.
Products
Zinnwald will produce battery grade lithium carbonate, lithium hydroxide and lithium fluoride (Li2CO3, LiOH, LiF) or a combination thereof; one the strengths of the project is it is somewhat flexible in what it can produce.
Furthermore, it is anticipated that in addition to returns generated by the sale of LiOH, Li2CO3 or LiF, the project also has the potential to produce up to 32,000 tpa of potassium sulphate (‘SOP’, ‘K2SO4’) for sale to the European fertiliser industry. Additionally, it is expected that a significant portion of the mined tailings would be sold for use as an aggregate filler to local building companies.
Environment and Permits
The Company holds an approved Mining License for the Zinnwald deposit and has a completed Project Environmental Impact Assessment (EIA). Final approvals for construction and operation would be issued once a project construction timetable is submitted to the local authorities.
