Neo Lithium has engaged Worley to complete a comprehensive DFS on its flagship, high-grade lithium brine project, 3Q, in Catamarca, Argentina. The development strategy focuses on production of 20,000 tonnes per year of lithium carbonate with the flexibility to expand production to 40,000 tonnes per year after phase one is completed and operational. The DFS is scheduled for completion in Q3 2021.

On the back of CATL’s investment and involvement, we are very pleased to have engaged and be working with Worley who bring a wealth of lithium knowledge and experience to our 3Q Project. Worley is a leading global engineering firm and has been involved in all aspects of lithium brine operations which will be invaluable in executing our DFS.

—Gabriel Pindar, COO of Neo Lithium Corp.

In December 2020, Neo Lithium Corp. (NLC) announced the closing of a previously announced equity investment by China-based Contemporary Amperex Technology Co. Limited (CATL), whereby CATL, through a subsidiary controlled by CATL, subscribed for 10,217,503 common shares of Neo Lithium at a price of C$0.84 per common share for gross proceeds to Neo Lithium of C$8,582,702 (US$6.7 million), representing approximately 8% of issued and outstanding shares of the Neo Lihtium. (Earlier post.)

Results of the last pre-feasibility study (PFS) performed by GHD Chile SA (GHD) and Groundwater Insight Inc. were filed on 8 May 2019 for a project with 20,000 tonnes of lithium carbonate production annually with an after-tax Net Present Value (8% discount rate) of US$1.143 billion, Internal Rate of Return of 49.9%, Capital Expenditures of US$318.9 million, Operating Expenses of US$2,912 per tonne of lithium carbonate, and a pay-back of twenty months using a lithium carbonate price of US$11,882 per tonne over a thirty-five year mine life.

The studies carried out by Neo Lithium in its evaporation pilot plant at the salar site and the lithium carbonate pilot plant in the town of Fiambalá confirm that the general parameters defined in the PFS will be validated in the DFS.

The last Reserve Estimation issued on the PFS is summarized below:

This reserve will be updated because two new wells yielding 160 meters with 1,128 mg/l Lithium (PB1-R-24) and 178 meters 1,117 mg/l Lithium (PB1-R-25) were reported in June 2019, after the PFS was issued. The wells are outside the previously considered ore body and therefore it is expected to have a positive effect in the previously estimated resource and reserve.

The decision to complete a DFS has been made in collaboration with Contemporary Amperex Technology Co. Ltd. (“CATL”), Neo Lithium’s 8% shareholder, who will also participate in all technical decisions.

Neo Lithium has been operating pilot evaporation ponds for more than three years, while the pilot lithium carbonate plant has been in operation for nearly two years. This has resulted in a meaningful ramp up in knowledge while improving the process all the way through to validate the PFS and take the project more efficiently into DFS with a view towards future construction.

As a result of efforts to maintain steady operations at pilot scale level, Neo Lithium continues to produce its own lithium brine concentrate and lithium carbonate on a regular basis, and believes that it is on track towards the goal of being in production by the later stages of 2023.