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Pre-Feasibility Study

Highlights of the Prefeasibility Study:

Clearwater Pre-Feasibility Study Technical Details:

The completion of the Pre-Feasibility Study (PFS) is significant milestone for E3 Lithium. The PFS outlines the detailed process to produce battery grade lithium hydroxide and reports the first lithium-in-brine proven mineral reserves in Canada. The PFS was completed by Sproule Associates Limited, Matrix Solutions Inc, Sedgman Canada Ltd and Stantec Inc.

The completion of the PFS positions the Clearwater Project as a sustainable source of lithium in the stable and reliable jurisdiction of Alberta.

Clearwater Project Summary

Metric Units Value
Initial Production Tonnes LHM/year 32,250
Average Production (50-year) Tonnes LHM/year 25,850
Total Initial Capital (CAPEX) M US$ 2,465
Total Sustaining & Abandonment Capital M US$ 1,799
Annual Operating Cost (OPEX) M US$ 187
Initial Operating Costs (OPEX/tonne) US$/tonne 6,200
Average Operating Costs (OPEX/tonne) US$/tonne 7,250
Average LHM Price (BMI) US$/tonne 31,344
Average Annual EBITDA1 M US$ 531
IRR (pre-tax) % 29.2
IRR (after-tax) % 24.6
NPV8 (pre-tax) M US$ 5,178
NPV8 (after tax) M US$ 3,717
Payback Years 4.25

All prices quoted in this news release are USD unless otherwise stated.

Mineral Resources and Reserves

The Bashaw District includes an updated 18.4 Mt LHM (16.2 Mt LCE) Measured and Indicated mineral resource estimate, leveraging the same methodology as described in E3’s news release dated March 21, 2023.  Additional lithium grade sampling results modified the P50 grade concentration to 75.5 mg/L, resulting in an increase in the total estimated resource volume.

 Bashaw District Mineral Resources2
Original Lithium in Place (OLIP)		 Li
(tonnes)		 LCE   
(tonnes)		 LHM 
(tonnes)
 TOTAL 3,046,800 16,218,100 18,421,000
 Indicated Mineral Resource 1,790,500 9,530,900 10,825,450
 Measured Mineral Resource 1,256,300 6,687,200 7,595,500

The Clearwater Project’s Proven and Probable lithium brine mineral reserve is 1.29 Mt LHM (1.13 Mt LCE). The Clearwater Project mineral reserve is contained within the Bashaw District Measured and Indicated lithium mineral resource, totaling 18.4 Mt LHM (16.2 Mt LCE). Measured resource estimates can be converted to proven or probable reserve estimates, and indicated resource estimates can be converted to probable reserves estimates.

Clearwater Project Reserves3 Li
(tonnes)		 LCE
(tonnes) 		 LHM
(tonnes)  
TOTAL 213,750 1,137,850 1,292,400
Proven Reserves – initial 5 years 26,500 141,200 160,350 
Probable Reserves – 6 to 50 years 187,250 996,650 1,132,050 

Clearwater Project’s initial production and nameplate capacity is projected to be 32,250 tonnes of lithium hydroxide per year. The Clearwater has a projected production life of 50 years. Over this time, the lithium grade declines over the 50-year period as mixing occurs within the reservoir drainage pattern. This projection is based on a thorough analysis that informed the creation of a detailed reservoir development plan. Production values were determined based on comprehensive reservoir data, to ensure a solid foundation for future operations.

The mineral reserve estimate uses an average lithium price of $31,344 per tonne LHM, and uses negative cash flow as the economic cut-off, which was not realized within the 50-year production life of the project.  The total reserve volumes account for 38% of the mineral resource volume within the project area.  Capital cost estimates used industry standard estimating practices for a Class 4 estimate.  Operating cost estimates were compiled using vendor and engineering data.

The Lithium Production Process

Extraction Of Lithium Brines

The Leduc Reservoir is a well understood ancient reef complex that has exceptional flow rates and deliverability due to favourable rock properties and pressure. A geologic model and subsequent reservoir production model were completed to provide estimates on the brine volume, lithium concentration and producible brine across the Bashaw District. These models were further used to develop the production plan that provided the wells, layout and volumes to be delivered to the Central Process Facility (CPF).

The reservoir drainage model is based on a standard “5-Spot” well network pattern. A total of 38 well pads would produce the required lithium enriched brine: 19 well pads with 4 producing wells and 1 injection well; and 19 well pads with 1 producer and 4 injection wells. The drainage area will have a total of 93 lithium brine producing wells and 93 wells reinjecting the lithium depleted brine. Over time, lithium grade would decline as reinjection brine reaches the production well.  Workovers are planned to optimize recovery factor by modifying the well completions. This results in a decline in the production of lithium hydroxide over the 50-year life of the project from 32,250 tonnes LHM per year initially to an average volume of 25,850 tonnes LHM per year.

Brine Production Network: The 38 well pads will be connected via a series of local pipelines to the CPF. These pipelines are underground, similar to oil and gas pipeline networks in Alberta.

Pretreatment: The pretreatment process for brine from the Clearwater area will involve receiving the brine at 70°C and 800 kPa. The water/gas mixture is depressurized to release about 80% of dissolved gas, mainly H₂S. The majority of the remaining gas is captured in a Vapour Recovery Unit in the holding tank. The entrained gases are collected from the brine and re-injected into another reservoir that has no economic value. The brine’s low total suspended solids are expected to be less than 350 mg/L, which would eliminate the need for filtration before DLE. 

Direct Lithium Extraction: Lithium chloride would be extracted from degassed brine through a DLE process using an aluminate-based sorbent in a continuous separation process. This process involves columns cycling across operating modes, controlled by dedicated valves.

The process produces no waste streams and requires no chemical treatment within the DLE process.

Purification and Volume Reduction: The Lithium chloride stream from DLE would then undergo purification and concentration to remove contaminants, reduce volume, and recover water for reuse; this involves filtration, reverse osmosis, nanofiltration, and conventional ion exchange processes. The last step of water reduction involves evaporating with a Mechanical Vapor Recompression (MVR) unit, an energy efficient method. The system deploys a “Zero Liquid Discharge” philosophy that recycles all available received water from the various process steps back into an evaporator to produce purified water for use in the Desorption step of the DLE system. 

Conversion to Lithium Compounds: The purified lithium chloride would then be converted into lithium carbonate using a chemical precipitation process. The slurry of lithium carbonate is then converted using a similar process into lithium hydroxide. The final lithium hydroxide stream is crystalized into a salt that can be sold directly into the battery cathode manufacturing process.  

The only industrial waste that leaves the CPF is calcium carbonate generated during the production of lithium hydroxide. This product is used in cement and could have a market in Alberta or elsewhere. While the PFS has assumed this would be disposed of, there is potential this calcium carbonate can be sold, thereby adding a secondary revenue stream and eliminating all external waste.

Overall, the processing plant is expected to operate at a lithium recovery of 90.4% and an on-time factor of 92%.

Lithium Packaging: The dried lithium hydroxide will be screened and transferred to storage silos through a CO2-free system, packaged in bulk bags via automated stations, and then conveyed to the loading station for storage and transportation. 

Capital Costs

The upfront capital costs of the Clearwater Project assume an initial production and nameplate capacity of 32,250 tonnes LHM per year are $2.47 B and are inclusive of the wells, pipelines, processing facility and include 10% contingency on the wells and pipelines and 20% contingency on the plant infrastructure. It does not include the capital for the power generation of carbon sequestration, which has been planned to be built by a 3rd party power provider locally in Alberta where the costs are incorporated into the operating costs for the price of power.

Section Installed Cost (US$ 000’s)
Brine production and brine injection wells 378,496
Brine production and injection pipelines 448,134
Brine Treatment 448,146
Lithium Extraction and Purification Unit 403,971
Lithium Carbonation Unit 106,803
Lithium Hydroxide Unit and packaging 148,341
Chemical Handling 52,741
Site Preparation (Allowance) 31,095
Buildings (Allowance) 49,751
First Fills 55,970
Contingency 342,028
Total CAPEX 2,465,476

Operating Costs

The initial operating costs (OPEX) for the project is projected at$ 6,200/tonne LHM. Over the life of the project, production declines and the average OPEX over the life of the project increases to $ 7,250/tonne LHM. The all-in average OPEX, including sustaining and abandonment capital, over the life of the project is projected at $8,250/tonne LHM.

Description Percentage of Initial Operating Costs
Well Servicing 3%
Pipeline Leak Detection <1%
Maintenance 12%
Chemicals and Trucking 33%
Power and Natural Gas 39%
Waste Disposal 2%
Operations Personnel 9%
Miscellaneous Cost 2%
Total Annual OPEX 100%

Infrastructure

The Clearwater Project will be strategically located within an approximate 10km radius of essential infrastructure, including power and roads, to minimize the expenses related to infrastructure development. Extended infrastructure, such as railway and natural gas, are within approximately 25km of the site. The project is within 2km of a major highway which ensures year-round access and convenient equipment delivery while providing local stimulus and access for staff from nearby towns and cities and eliminating the need for remote camps.

Sustainability

E3 Lithium is committed to environmental sustainability and is developing processes that aim to make the Clearwater Project as sustainable as possible, ensuring the plant operates with minimal environmental impact.

Water Usage:

Land Use:

Clearwater Project facility has relatively small footprint compared to traditional lithium projects2

Carbon Emissions:

1: The mineral resources, mineral reserves, economic details and other technical information contained within this page are part of E3 Lithium’s Clearwater Pre-Feasibility Study, outlined within the June 26, 2024 news release titled “E3 Lithium Outlines Clearwater Project Pre-Feasibility Study and Confirms Brine Reserves and is available on the E3 Lithium’s website (e3lithium.ca/newsroom/news-releases) and SEDAR+ (www.sedarplus.ca).

2: Based on ~300 acres for the clearwater project, based on ~3300 acres of Greenbushes lithium mine, based on approximately ~8000 acres of Salarde Atacama

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