Project Overview

Sayona’s flagship, the North American Lithium (NAL) operation was acquired by Sayona Québec in August 2021, in partnership with Piedmont Lithium Inc (Sayona 75%; Piedmont 25%).

In August 2023, Sayona announced the first shipment of NAL spodumene (lithium) concentrate to the international lithium market, marking a major milestone and paving the way for the first revenues within two years of NAL’s acquisition. NAL has produced approximately 140,000 tonnes of spodumene concentrate since March 2023.

In March 2023, Sayona announced the successful restart of production at NAL. The restart was achieved both on time and on budget, marking a major milestone as the largest source of hard rock lithium production in North America.

Forming the key part of Sayona’s Abitibi hub along with the nearby Authier Lithium Project, the restored NAL operation together with the Company’s emerging northern hub, now comprises North America’s largest lithium (spodumene) resource base.

NAL comprises a contiguous group of 42 mineral titles (41 claims, one mining lease) spanning 1,493 hectares, situated near La Corne township in Québec’s Abitibi-Témiscamingue region. The project lies 60km north of the city of Val d’Or, a major mining service centre, and in proximity to Sayona’s Authier Lithium Project (Authier).

NAL is a brownfield open pit mining operation with a concentrator, with more than C$400 million having been invested in the operation by previous owners, including a carbonate plant. The existing plant has nameplate capacity to produce up to 220kt of spodumene concentrate or 30kt LCE per year.

Importantly, nearly all of NAL’s power is from clean and green hydroelectricity, while it is well serviced by provincial highways and an all-weather secondary road.

Definitive Feasibility Study – April 2023

A Definitive Feasibility Study released in April 2023 confirmed NAL’s value, including the following key data:

  • Pre-tax net present value (NPV)(8% discount) estimated at approximately A$2.2 billion (double the Pre-Feasibility Study estimate)

  • Pre-tax internal rate of return (IRR) of 4,701%

  • Total net revenue of A$7.6 billion

  • Total project EBITDA of A$3.7 billion

  • 20 year life of mine, with annual average concentrate production of 226,000t during first four years of operation

Notes:

1. Production targets are based on Ore Reserves Estimates (see Table 2 and Table 4 below) which consider the open pit constrained portion of the Measured and Indicated Mineral Resources. Inferred Mineral Resources are considered as waste. In addition to the 21.7 Mt of ore, a total of 172.3 Mt of waste and 7.1 Mt of overburden must be mined, resulting in an overall LOM strip ratio of 8.3.

2. NAL Ore Reserves result from a positive pre‐tax financial analysis based on a variable 5.4% to 5.82% Li2O spodumene concentrate average selling price of US$1,352/t and an exchange rate of 0.75 US$:1.00 C$. The selected optimised pit shell is based on a revenue factor of 0.6 applied to a base case selling price of US$1,273/tonne of concentrate;

3. Excluding ramp up time of 6 months. Producing spodumene concentrate @ 5.4%;

4. Feed for Sayona carbonate plant;

5. Carbonate plant project start‐up by fourth year.

Notes:

1. The Competent Person is responsible for the 2023 Mineral Resources estimate. The previous estimate is given as additional information to the reader but it has been superseded by the 2023 Mineral Resource estimate.

2. The independent Competent Person (CP) for the Mineral Resource Estimate (MRE), as defined by JORC, is Pierre‐Luc Richard, P.Geo., of PLR Resources Inc. The effective date of the estimate is 31 December 2022.

3. These mineral resources are not mineral reserves as they do not have demonstrated economic viability. The quantity and grade of reported Inferred resources in this MRE are uncertain in nature and there has been insufficient exploration to define these resources as Indicated or Measured; however, it is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

4. Resources are presented undiluted, pit constrained and within stope shapes, and are considered to have reasonable prospects for economic extraction. Although the calculated cut‐off grade is 0.15% Li2O for open pit, a cut‐off grade of 0.60% Li2O was used for the MRE due to processing limitations.

5. The pit optimisation was done using Deswik mining software. The constraining pit shell was developed using pit slopes of 46 to 53 degrees.

6. The open‐pit cut‐off grade and pit optimisation were calculated using the following parameters (amongst others): 5.40% Li2O concentrate price = US$1,273 per tonne; C$:US$ exchange rate = 1.32; Hard Rock and Overburden Mining cost = C$5.12/t mined; Mill Recovery of 73.6%; Processing cost = C$23.44/t processed; G&A = C$6.00/t processed; Transportation cost = C$118.39/t conc; Tailing Management Cost = C$2.86/t processed, and Water treatment C$0.18/t processed.

7. The cut‐off grade for underground resources was calculated at 0.62% Li2O , but rounded to 0.60% Li2O; it used identical costs and recoveries, except for mining costs being at C$100/t. Cut‐off grades will be re‐evaluated in light of future prevailing market conditions and costs.

8. The MRE was prepared using Leapfrog Edge and is based on 247 surface drillholes. The resource database was validated before proceeding to the resource estimation. Grade model resource estimation was interpolated from drillhole data using OK and ID2 interpolation methods within blocks measuring 5 m x 5 m x 5 m in size and subblocks of 1.25 m.

9. The model comprises 49 mineralised dykes (which have a minimum thickness of 2 m, with rare exceptions between 1.5 m and 2 m).

10. High‐grade capping was done on the composited assay data. Capping grades was fixed at 2.3% Li2O. A value of zero grade was applied in cases where core was not assayed.

11. Fixed density values were established on a per unit basis, corresponding to the median of the SG data of each unit ranging from 2.70 g/cm3 to 3.11 g/cm3. A fixed density of 2.00 t/m3 was assigned to the overburden.

12. The MRE presented herein is categorised as Measured, Indicated and Inferred Resources. The Measured Mineral Resource is limited to 10 m below the current exposed pit. The Indicated Mineral Resource is defined for blocks that are informed by a minimum of two drillholes where drill spacing is less than 80 m. The Inferred Mineral Resource is defined where drill spacing is less than 150 m. Where needed, some materials have been either upgraded or downgraded to avoid isolated blocks and spotted‐dog effects.

13. The number of tonnes (metric) was rounded to the nearest hundred thousand and the number of contained Li2O tonnes was rounded to the nearest hundred.

Notes:

1. The Competent Person is responsible for the 2023 Ore Reserves estimate. The previous estimate is given as additional information to the reader but it has been superseded by the 2023 Ore Reserves estimate.

2. Ore reserves are measured as dry tonnes at the crusher above a diluted cut‐off grade of 0.60% Li2O.

3. Probable Ore Reserves include 347kt of ore at 0.96% Li2O currently stockpiled at the crusher pad.

4. Ore Reserves result from a positive pre‐tax financial analysis based on a variable 5.4% to 5.82% Li2O spodumene concentrate average selling price of US$1,352/t and an exchange rate of 0.75 US$:1.00 C$. The selected optimised pit shell is based on a revenue factor of 0.6 applied to a base case selling price of US$1,273/tonne of concentrate.

5. Topographic surface as of 31 December 2022 and mining forecast was used to adjust for 31 March 2023.

6. The reference point of the Ore Reserves Estimate is the NAL crusher feed.

7. In‐situ mineral resources are converted to Ore Reserves based on pit optimisation, pit design, mine scheduling and the application of modifying factors, all of which support a positive LOM cash flow model. According to the JORC Code, inferred resources cannot be converted to Ore Reserves.

8. The waste and overburden to ore ratio (strip ratio) is 8.3.

9. The Ore Reserves for the Project have been estimated by Mélissa Jarry, P.Eng. OIQ #5020768, a Competent Person as defined by JORC. The effective date of the estimate is 27 March 2023.

10. Totals may not add up due to rounding of significant figures.

The NAL Ore Reserves Estimate has been classified according to the underlying classification of the Mineral Resource Estimates and the status of the modifying factors. The status of the modifying factors is generally considered sufficient to support the classification of Proved Ore Reserves when based upon Measured Mineral Resources and Probable Ore Reserves when based upon Indicated Mineral Resources. For further information on the applicable modifying factors for the NAL Ore Reserves Estimate, refer to the ASX announcement.

Piedmont partnership

Upon the restart of operations, an offtake agreement with Piedmont has come into effect, whereby Piedmont is entitled to purchase the greater of 113,000 metric tonnes per year of spodumene concentrate or 50% of production from NAL.

This offtake agreement will remain in place until the commencement of operation of a lithium conversion plant in Québec. At this point, spodumene concentrate produced from NAL will be preferentially delivered to that chemical plant. Any remaining concentrate not required by the conversion plant will be delivered to Piedmont.

In June 2022, a formal agreement was announced by Sayona Québec and Piedmont to restart spodumene production at NAL. This ultimately includes the development of a spodumene conversion facility at NAL to produce lithium hydroxide or lithium carbonate, as per the Company’s agreement with the Québec Government to develop a local downstream processing capability in proximity to the North American battery market.

Production Ramp-up

In August 2023, Sayona announced the first commercial shipment of spodumene concentrate from NAL, positioning it as North America’s leading producer of hard rock lithium.

The Honourable François‐Philippe Champagne, Minister of Innovation, Science and Industry of Canada, said: “Critical minerals are essential to the green and digital economy of tomorrow. The growing demand and limited supply of these minerals represents a generational economic opportunity for Canada. Thanks to companies such as Sayona, we continue to position Québec and Canada as a leader and strategic partner of choice for the battery and electric vehicle industry.”

In March 2023, Sayona announced the successful restart of spodumene concentrate production at NAL. The successful restart was achieved on time and within budget, in a major milestone for Sayona together with Québec’s battery minerals industry.

The restarted NAL plant has a target annual production capacity of up to 226,000t of spodumene concentrate and is powered primarily by low cost, sustainable hydropower.

In June 2023, Sayona announced a preliminary carbonate technical study, showing that the NPV of a fully integrated NAL operation including downstream processing could exceed A$5 billion (pre-tax, 8% discount rate).

The NAL operation has produced approximately 140,000 tonnes of spodumene concentrate since its restart, with the joint venture targeting the achievement of steady state production in 2024.

In May 2024, Sayona announced the discovery of new high-grade zones at NAL, offering a focal point for potential future mining options.

Pictured: AAL Moon departs port in Québec in August 2023, with the first shipment of NAL spodumene concentrate for the international lithium market.

Projects

 

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