Case Study Of Avalon's Separation Rapids Lithium
Avalon should benefit from attractive economies of its flagship Separation rapids lithium project
Avalon’s Separation Rapids project is one of the advanced stage lithium project, which produces lithium from rare metal pegmatites. Separation Rapid’s project area is filled with significant amount of lithium pegmatite deposits rich in lithium mineral petalite (lithium aluminium silicate).The project’s near surface petalite deposits encourage low-cost open-pit mining at high economies of scale. Petalite finds its usage in the glass and ceramics industry and also in the production of lithium chemicals (lithium hydroxide) used in batteries. Further, growing demand for lithium chemicals utilized in batteries coupled with narrow supply is expected
to raise lithium price high, should benefit the lithium miners. Recently, the project’s Preliminary Economic results revealed that the project could produce up to 14,600 metric tons per year of lithium hydroxide for 10 years. The project’s NPV stood at $343 million pre-tax, at an attractive IRR of 19%. Further, on December 23, 2016, Avalon announced that it has expected to conduct a drilling campaign in the early 2017 in order to explore lepidolite (high grade lithium mineral 8% Li2o) from its sub-zones. As a result, the Company is well-positioned to extend its prospective lithium supply in the near term and effectively serve the market.
Avalon’s Separation Rapids project is one of the advanced stage lithium project, which produces lithium from rare metal pegmatites. Separation Rapid’s project area is filled with significant amount of lithium pegmatite deposits rich in lithium mineral petalite (lithium aluminium silicate).The project’s near surface petalite deposits encourage low-cost open-pit mining at high economies of scale. Petalite finds its usage in the glass and ceramics industry and also in the production of lithium chemicals (lithium hydroxide) used in batteries. Further, growing demand for lithium chemicals utilized in batteries coupled with narrow supply is expected
to raise lithium price high, should benefit the lithium miners. Recently, the project’s Preliminary Economic results revealed that the project could produce up to 14,600 metric tons per year of lithium hydroxide for 10 years. The project’s NPV stood at $343 million pre-tax, at an attractive IRR of 19%. Further, on December 23, 2016, Avalon announced that it has expected to conduct a drilling campaign in the early 2017 in order to explore lepidolite (high grade lithium mineral 8% Li2o) from its sub-zones. As a result, the Company is well-positioned to extend its prospective lithium supply in the near term and effectively serve the market.