ProjectsAuthier Lithium Project
Authier Lithium Project
Sayona’s Authier Lithium Project in Québec, Canada is a hard rock spodumene lithium deposit. It has been scheduled for development as an open cut mine, initially producing a 6% Li2O spodumene concentrate.
Sayona Mining acquired 100% of the Authier project in July 2016. The Company believes it will create significant share value-uplift for shareholders as the project is advanced towards development.
The project’s key attractions include its near-term development potential, access to world-class infrastructure and labour, economical hydroelectric power and its strategic location near North American battery markets.
In November 2019, Sayona completed a revised Definitive Feasibility Study (DFS) and is targeting near-term construction pending regulatory approvals, amid growing lithium demand and constrained supply. Sayona has also undertaken studies on producing a premium value-added lithium carbonate product at Authier.
Sayona together with its world-class support team has submitted a bid for the North American Lithium (NAL) mine in Québec. Should the bid prove successful, Sayona plans to combine lithium produced from Authier with lithium at the nearby NAL site, facilitating a significant improvement in plant performance and economics while protecting valuable jobs and investment and creating value for shareholders.
In January 2021, Sayona formed a strategic partnership with leading U.S.-based lithium corporation, Piedmont Lithium Limited (ASX:PLL; Nasdaq:PLL). Under the agreements, Piedmont will acquire up to 19.9% of Sayona Limited for total consideration of around US$7 million. Piedmont also will invest around US$5 million for a 25% stake in Sayona Québec.
Piedmont also agreed a binding offtake agreement under which it will acquire up to 60,000 tpa of spodumene concentrate or 50% of Sayona Québec’s production, whichever is greater. The supply agreement is for Sayona Québec’s life-of-mine operations and is based on market pricing with a minimum price of US$500/t and maximum price of US$900/t on a delivered basis to Piedmont’s planned lithium hydroxide plant in North Carolina.
The supply agreement is conditional upon Piedmont and Sayona agreeing to a start date for spodumene concentrate deliveries between July 2023 and July 2024, based on the development schedules of both parties.
Authier revised Definitive Feasibility Study demonstrates technical and economic viability.
The revised DFS announced on 11 November 2019 confirmed the Authier project’s viability as a profitable and sustainable new lithium mine that will provide new jobs, investment and strong returns for all stakeholders.
Key findings included:
- NPV (real terms @ 8% discount rate) of C$216m vs previous study’s C$184.8m
- Pre‐tax internal rate of return 33.9% vs 33.7%
- Annual average spodumene production – dry (6% Li2O) of 114,116t vs 87,400t; 78% recovery rate
- Life of mine 13.8 years (based on a higher daily production rate of 2,600 tonnes per day compared to the previous DFS rate of 1,850t)
- Total EBITDA of C$461m and total net revenue of C$1,412m
- Initial capital costs C$120m; life of mine capital costs C$211m
- Project payback period of 2.7 years.
Resources and Reserves
Authier JORC Mineral Resource Estimate (0.55% Li2O cut-off grade)
|Category||Tonnes (Mt)||Grades % Li2O||Contained Li2O|
|Measured + Indicated Resource||17.18||1.01%||174,200|
|Note: The Ore Reserve Estimate is inclusive of dilution and ore loss.
(Refer ASX announcement 24 September 2018)
Authier JORC Ore Reserve Estimate (0.55% Li2O cut-off grade)
|Category||Tonnes (Mt)||Grades (% Li2O)||Contained Li2O (t)|
|Note: The Ore Reserve Estimate is inclusive of dilution and ore loss.
(Refer ASX announcement 24 September 2018)
Revised Definitive Feasibility Study highlights
The project area comprises 19 mineral claims totalling 653 hectares, and extends 3.4 kilometres in an east-west, and 3.1 kilometres in a north-south direction, respectively. The mineral claims are located over Crown Lands.
The Authier project is situated 45 kilometres northwest of the city of Val d’Or, a major mining service centre in Québec. Val d’Or is located approximately 466 kilometres north-east of Montreal. The project is easily accessed by a rural road network connecting to a national highway a few kilometres east of the project site.
Val d’Or and other nearby cities have experienced mining work forces and other mining related support services. Regional support services include:
- 5 kilometres by dirt road to a sealed highway connecting to Val d’Or;
- 5 kilometres from an electricity grid supplied by hydro-electric power; and
- 20 kilometres to rail facilities connecting to an export port.
The deposit is hosted in a spodumene-bearing pegmatite intrusion. The deposit is 825 metres long, striking east-west, with an average thickness of 25 metres, minimum 4 metres and maximum 55 metres, dipping at 40 degrees to the north. The current pit optimisation has the mineralisation extending down to 200 metres depth but the deposit remains open in all directions.
Isometric views of the Authier pit with the mineralised envelope on the left from the February 2017 PFS
The Authier project has been subject to more than 31,000 metres of drilling. Between 2010 and 2012 Glen Eagle, the previous tenement holder, completed 8,990 metres of diamond drilling in 69 diamond drill holes (DDH) of which 7,959 metres were drilled on the Authier deposit; 609 metres (five DDH) were drilled on the northwest and 422 metres on the south-southwest of the property.
Sayona has completed three phases of drilling totalling more than 11,000 metres in 81 DDH. All the holes completed by Sayona and included in the Mineral Resource Estimate have used standard DDH, HQ or NQ core diameter size, using a standard tube and bit. The drilling programmes have been subject to very robust QA/QC procedures.
The Company believes there is further potential to optimise the main resource area including:
- Infill drilling within the main deposit where there is no resource due to lack of drilling density (shown as block circles on Figure 1), especially in the east and west, and to add the resource base; and
- Converting inferred resources into a higher resource classifications by further higher density drilling (shown as blue on the diagram).
Black circles represent areas where further density of drilling is required to increase the resource. Additionally, some of the blue Inferred Resource areas have the potential to be converted to higher resource categories with further drilling
The mineralisation remains open in all directions (see Figure below). Currently, the Company is not looking to expand the current Mineral Resource estimate. However, future target areas to expand the resource could include:
- Testing for further mineralisation in the east and west strike extensions;
- Defining further mineralisation at depth; and
- Assessing the resource potential of Authier North.
Lithium solid showing the location of historical drill holes and potential areas for resource expansion in future drilling programs.
Environmental, Community and First Nations
In parallel with the DFS, Sayona has progressed a revised Environmental Impact Study (EIS) in accordance with BAPE requirements. The EIS is a rigorous scientific study containing all the necessary documentation to satisfy the necessary legal and regulatory requirements.
This also entails further community engagement including the establishment of a project monitoring committee comprised of key stakeholders. The 14-member committee held its first meeting in September 2019 and will remain active through to the completion of the Authier project and its eventual rehabilitation.
The revised EIS was submitted to Québec’s Ministry of the Environment and the Fight against Climate Change (MELCC) on 22 January 2020.
In April 2020, Sayona received feedback from the Ministry with queries concerning a range of categories, as per normal with such projects. Sayona continues to advance the project in accordance with planned timelines.
Significantly, a hydrogeological study concluded the project would have no impact on the St-Mathieu-Berry esker where the esker is used to pump drinking water. Protection of the esker has been a key focus of the EIS and Sayona recognises its importance to the people of La Motte, Abitibi and the broader community.
The EIS will be submitted to the Public Hearings Office for further public hearings and review, ultimately leading to expected project approval under the BAPE and MELCC recommendations.
Sayona continues to engage closely with all stakeholders, including holding information sessions and consultations with local municipalities, landowners, First Nations communities, non‐governmental organisations and other stakeholders, with the engagement effort led by its local team in Québec.
In December 2019, Sayona was pleased to announce an agreement with First Nation Abitibiwinni for the works during the exploration phase of the Authier Lithium Project. This agreement is aimed at ensuring a collaborative and mutually beneficial partnership for the development of the project.
The Company’s Tansim Lithium Project is situated 82 kilometres south-west of the Authier project. The project comprises 180 mineral claims spanning 10,505 hectares and is prospective for lithium, tantalum, and beryllium.
Mineralisation is hosted within spodumene‐bearing pegmatite intrusions striking east‐west, dipping to the north and hosted by metasedimentary – metavolcanic rocks of the Pontiac sub‐province. The main prospects are Viau‐Dallaire, Viau and Vezina.
In November 2019, Sayona announced an Exploration Target* for the Viau‐Dallaire prospect, highlighting the potential for the development of a new lithium deposit.
|Range||Tonnes||Grade % Li2O|
|Lower||5,000,000||1.2 to 1.3|
|Upper||25,000,000||1.2 to 1.3|
* The potential quantity and grade of the Exploration Target is conceptual in nature, and is therefore an approximation. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Québec – A leading lithium province
In 2019, Propulsion Québec released an independent study into the potential of the province’s lithium‐ion battery sector, amid strong growth in demand from the electric vehicle and energy sectors across North America. The study confirmed the economic potential of the lithium industry for Québec.
The study further supported comments by the Québec Premier that lithium is a ‘jewel’ for the province (source: Montréal Gazette, 19 August 2019). With advantages including low-cost hydroelectric power, world-class infrastructure and skilled labour together with its proximity to the North American battery market, Quebec has the potential to develop a complete lithium value chain from mining through to downstream processing
In its provincial budget for fiscal 2021, the Québec government committed to advancing electrification as a core part of its strategy, with an additional C$90 million (A$101m) dedicated to critical and strategic minerals including lithium. The government has indicated it plans to invest up to C$1.4 billion in its battery sector, with projections of total investment exceeding C$7 billion.
Meanwhile, the Canadian government together with the Ontario government have partnered with Ford Motor Co. to invest C$1.95 billion in Ford’s Ontario plants, with the deal including funding towards the production of five EVs as well as battery assembly. Canada was ranked the world’s 10th largest automaker in 2016 with production of more than 1.3 million vehicles, according to the Canadian Vehicle Manufacturers’ Association.
In the United States, leading EV maker Tesla has flagged plans to secure its lithium supply from North America. Benchmark Mineral Intelligence estimates Tesla’s battery capacity target alone would require an additional 2 million tonnes of lithium by 2030.
Studies undertaken by EY‐Parthenon have reaffirmed Québec’s position as the leading supplier of spodumene to North America based on cost, quality, reliability and carbon footprint. An Abitibi hub, as proposed by Sayona, could deliver spodumene ore to the North American market at the lowest cost and with the smallest environmental footprint compared to competitors in Australia and South America.