Friday, May 26, 2023
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Initial preliminary economic assessment. LithiumBank Resources released highlights from the initial preliminary economic assessment (PEA) for its Boardwalk lithium brine project in Alberta, Canada. The PEA was based on average annual production of 31,350 tonnes of battery grade lithium hydroxide monohydrate (LHM) over a 20-year period, an average price of US$26,000 per tonne of LHM, operating expense of US$6,807 per tonne LHM, and annual EBITDA of US$586 million. The net present value of the project is estimated at US$2.7 billion on a pre-tax basis and US$1.7 billion on an after-tax basis. The initial capital cost of the project is expected to be US$2.1 billion. The expected payback period is 4.1 years on a pre-tax basis and 4.5 years on an after-tax basis.
An excellent starting point. While the preliminary economic assessment differs in many respects to our own initial assumptions, in many ways it is in the ballpark. Importantly, it compares favorably with preliminary economic assessments of similar projects. Management has identified multiple opportunities to significantly enhance project economics that we think could increase the pre-tax net present value to over US$3.0 billion, including annual EBITDA of US$700 million.
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