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Nevada lithium project PEA well received

The Toronto-quoted stock of lithium project developer Cypress Development Corp (TSXV:CUP) has reacted positively to a preliminary economic assessment (PEA) on its Clayton Valley lithium project, in Nevada – the US’s hottest area code for lithium production.
Nevada lithium project PEA well received Nevada lithium project PEA well received Nevada lithium project PEA well received Nevada lithium project PEA well received Nevada lithium project PEA well received

Cypress Development has released strong economics on its Clayton Valley lithium project, Nevada

With a base case lithium carbonate price assumption of US$13,000 per metric tonne and at a discount rate of 8%, the PEA calculated a net present value of $1.45-billion and an internal rate of return of 32.7% on after-tax cash flow.

The capital cost is estimated at $482-million, with the preproduction and operating cost estimate averaging $3,983/t of lithium carbonate.

Prepared by Colorado-based engineering services firm Global Resource Engineering (GRE), the PEA is founded on a base case mine plan producing an average of 24,042 tonnes per annum (tpa) of lithium carbonate over 40 years.

The PEA is based on a May mineral resource estimate of 831 million tonnes grading 867 parts per million (ppm) lithium, or 3.84 million tonnes lithium carbonate equivalent in the indicated resource category. The asset also holds an inferred resource of 1.12 billion tonnes grading 860ppm lithium, or 5.13 million tonnes lithium carbon equivalent.

"The PEA outlines the steps necessary for a mine and mill at Clayton Valley, including a sulphuric acid plant which is the main driver in the costs. GRE uses a conventional approach in processing and developed a production schedule that utilizes only a small fraction of the total resources on the property. The end result is a project that has strong economics and the potential to generate significant cash flow," CEO Dr Bill Willoughby says.

The company says it will continue to progress permitting and other areas to advance the project, which is located immediately east of North America's only lithium brine operation, Albemarle's Silver Peak mine.

Cypress shares climbed more than 15% on Friday to close at C38c apiece, giving the company a market valuation of about C$23.09 million.