ASX-listed Lithium Universe has confirmed the economic feasibility of its Bécancour lithium carbonate refinery in Québec, Canada, following the completion of a definitive feasibility study (DFS). 

In an announcement on Monday, the company said the study reaffirmed the project’s viability despite a below-average pricing environment and that it supported the firm’s broader strategy of establishing a North American lithium chemicals business.

The planned refinery would have a capacity of up to 18 270 t/y of battery-grade lithium carbonate and would leverage the Jiangsu processing model. 

Lithium Universe said it would source spodumene feedstock from domestic suppliers as well as international markets, including Brazil and Africa, to help bridge the lithium conversion gap in North America.

The DFS estimates a pre-tax net present value (NPV) of about $718-million, using an 8% discount rate, and a pre-tax internal rate of return of 21%. The payback period is projected at 3.9 years.

The financial model incorporates a spodumene concentrate (SC6) price of $1 170/t and battery-grade lithium carbonate equivalent at $20 970/t.

At full production, the project is expected to generate revenue of about $383-million a year, with operational costs totalling $236-million. This results in estimated yearly earnings before interest, taxes, depreciation and amortisation of $148-million and a gross margin of 39%.

The capital cost for the project is estimated at $549-million, reflecting an 11% increase from the preliminary feasibility study released in October last year. This rise is primarily attributed to the inclusion of a Zero Liquid Discharge system, valued at $30-million, to recycle and reuse all process water on-site. Escalation and updated pricing quotes also contributed to the increase.

“The strong NPV and returns for the project indicate an economically viable project, and the board has made the financial investment decision. The project is now proceeding to the funding stage," said chairperson Iggy Tan.

He stated that an equity and debt adviser would be engaged to lead the funding outreach programme, aimed at securing strategic partners at the project level to support project financing.

Lithium Universe’s strategy focuses on advancing projects during market downturns to secure a competitive position when conditions improve. 

“Our counter-cyclical strategy is centered on advancing projects during market downturns, allowing us to strategically position ourselves for growth as the market rebounds. We are dedicated to funding and constructing a proven, low-risk lithium conversion refinery in Québec, marking the first step toward establishing Québec as the lithium conversion hub for the transatlantic region,” Tan said.