Project: Kings Valley, Nevada
||Humboldt County, northern Nevada
|Lithium Deposit Size
|11 million tonnes lithium carbonate equivalent(1) (historical estimate based on exploration work by Chevron Resources during the 1970s and 1980s).
|Lithium Resource Size
Detailed Resource Table
Kings Valley Ore Reserves
as at December 14, 2011
At 0.327% Lithium Cut-Off
Note: 95% Mine Recovery Factor Applied. Please see the Company’s additional disclosure of risks and uncertainties surrounding potassium and sodium in its continuous disclosure filings.
|Lithium Deposit Layout
||The project is spread over five mineralized lenses (Stages I to V) that extend approximately 30 kilometres from the southern to the northern edges of the lenses.
||Stage I reserve base supports annual production of 26,000 tonnes lithium carbonate, 90,000 tonnes of potassium sulfate and 100,000 tones of sodium sulfate. Future development potential for Stages II to V.
|NI 43-101 Preliminary Feasibility Study (December 2011)
||Project highlithts for nominal production of 26,000 tonnes per year lithium carbonate (Case 2):
- Pre-tax Net Present Value (NPV) of $552 million with an Internal Rate of Return (IRR) of 24% at an 8% discount rate;
- Operating cash costs, net of by-product credits, of $968 per tonne of lithium carbonate;
- Cash operating costs distributed between the individual products are: lithium carbonate $3,011 per tonne, potassium sulfate $87 per tonne, sodium sulfate $36 per tonne;
- Total cash operating costs per tonne (excluding credits) for lithium carbonate are $3,472 per tonne lithium carbonate;
- Once full lithium carbonate production of 26,000 tonnes per year is achieved, average annual cash flow is projected to be $124 million per year;
- Nominal production of by-product potassium sulfate and sodium sulfate of 90,000 and 100,000 tonnes per year, respectively;
- 20 year mine life, processing 25.5 million tonnes of ore at an average grade of 0.40% lithium using a 0.320% cut-off grade;
- Initial annual production of 13,000 tonnes lithium carbonate, increasing to 26,000 tonnes in year four;
- Nevada supports a large diversified mining industry;
- The project benefits from established infrastructure including road access, power supply and a local water source;
- Based on commodity prices of $6,000 per tonne lithium carbonate, $600 per tonne potassium sulfate, and $75 per tonne sodium sulfate;
- Overall recoveries are expected to be 87.2% for lithium, 77.7% for potassium and 82.7% for sodium.
||Near surface deposit
- Paved highway to the site
- 115 kV power line over site
- Elevation 1500 m
- 600 kms to port at Sacramento, 700 kms to port at San Francisco
|Planned Stage I Timeline
||Permitting and Environmental Studies - ongoing
Lithium demonstration plant planned for Fall 2014
Production Target - 2018/2019
- One of the world's largest known lithium deposits
- Development stage project
- Staged and scalable development facilitates production increases matched with incremental demand growth
- Located to meet U.S. domestic market and good access to Asian markets
- Nevada is a mining friendly state with good infrastructure
- Timing of anticipated lithium production coincides with rising demand expected from the increased use of mobile electronics and hybrid/electric vehicles
- Experienced team of mine builders
(1) Based on a 1983 non NI43-101 compliant report prepared by Chevron Resources (the "Chevron Report"). Western Lithium cautions readers not to place undue reliance on the content and conclusions of the Chevron Report, which was not prepared in compliance with National Instrument 43-101. The Chevron Report uses terminology other than those approved by Canadian Institute of Mining Guidelines.