Neo Lithium Corp (CVE:NLC) (OTCQX:NTTHF) (FRA:NE2) unveiled a further boost for the advancement of its 3Q project in Argentina, saying it had significantly improved the purity of the battery-grade lithium carbonate produced at the pilot plant.
After closing due to the pandemic, the plant in Fiambalá resumed operations in the fourth quarter last year and an improved processing method has led to the uplift of purity to 99.797% from 99.599%.
READ: Neo Lithium hires engineering giant Worley for 3Q project DFS as lithium carbonate prices recover
This means it is meeting worldwide premium specifications and very close to electric vehicle (EV) battery giant and the company's 8% shareholder Contemporary Amperex Technology Co Ltd's (CATL) high standards of product quality, said Neo Lithium.
"We continue optimizing the process in terms of quality and reagent consumption," said Waldo Perez, the president and CEO of Neo Lithium.
"We are on path to deliver a high-quality product and complete our DFS on time and on budget with a new improved process."
Earlier this month, the group said it had hired leading global engineer Worley to carry out a definitive feasibility study (DFS) on the 3Q project, which lies around 160 kilometres (km) from the pilot plant.
Tested at the pilot plant was brine with an average grade of 1,000 mg/l taken from production wells the northern zone of the 3Q project and then evaporated (for about a year) at the company's industrial pilot ponds.
The current lithium carbonate batch is the 13th since the plant started operation in May 2019. Due to the coronavirus (COVID-19) pandemic, the company has stored around 50 tonnes of concentrated brine ready to be processed.
It will continue to test batches to optimize the process for the definitive feasibility study (DFS) before turning the plant into continuous mode in the second or third quarter of 2021, it said. On continuous mode, the plant can produce up to 40 tonnes a year.
A pre-feasibility study (PFS) for 3Q was published in May 2019, which showed robust numbers. Output was put at 20,000 tonnes of lithium carbonate production a year with an after-tax net present value (8% discount rate) pegged at US$1.143 billion.
The internal rate of return (IRR) was put at an impressive 49.9%, with capex of US$318.9 million, and payback of 20 months using a lithium carbonate price of US$11,882 per tonne over a 35-year mine life.
Shares in Toronto added over 9% to C$3.38 each.
---Updates for share price---
Contact the author at giles@proactiveinvestors.com