Western Lithium USA Corporation, is pleased to announce that it has received a milestone payment of US$1.5 million pursuant to the Royalty Purchase Agreement with Orion Mine Finance (Master) Fund I LP ("Orion"), the Company's largest shareholder and a major New York investment fund, to be put towards building the planned Lithium Demonstration Plant expected to be operational in the fourth quarter of 2014.
Western Lithium intends to use the plant to collect design data for a definitive feasibility study and to demonstrate the viability of producing low cost lithium carbonate from its Kings Valley lithium-rich hectorite clay deposit in Nevada (the "Project"). The Company has received a USA patent for its proprietary process for separating lithium and potassium byproduct compounds from lithium-rich clays (see news release dated May 9, 2013). Based on its NI 43-101 Prefeasibility Study, the Project is forecast to have a comparably low first-quartile cost structure against new and incumbent lithium producers, and to generate a net present value of US$552 million at a discount rate of 8% (see SEDAR filing dated January 27, 2012).
"In 2014, we see potential for renewed interest towards the expansion of the lithium sector, due to the rising adoption by mainstream consumers of hybrid, plug-in and electric vehicles, and energy storage devices that use lithium ion batteries. Lithium ion technology is becoming ubiquitous in products ranging from lithium battery powered bikes to garden tools. We are aggressively planning to have the Lithium Demonstration Plant operational in Germany in the fourth quarter of 2014, at a fully permitted facility complete with utilities and laboratory support," said Western Lithium CEO, Jay Chmelauskas. "We will invite potential strategic partners, investors and stakeholders to visit the demonstration plant in Germany, where we expect to be able to demonstrate the advantages and cost competitiveness of producing lithium carbonate from our unique lithium clay."
Mr. Chmelauskas added that, "This summer, our HECTATONE™ Organoclay Plant in Nevada is scheduled to begin making specialty drilling fluid additives designed to provide viscosity, lubrication and reduced pressure loss for drilling applications. The use of directional drilling and fracking technology is opening up vast new deposits of oil and gas throughout the world and is considered to be at its early stages with tremendous potential global growth ahead for the drilling sector. Our strategy that was first outlined in the fall of 2012, to position the Company to benefit from two major investment themes: the growth of oilfield fracking and offshore drilling applications, and the growth of the lithium ion battery industry, is now coming to fruition in 2014."
Basic engineering for the Lithium Demonstration Plant was completed by URS Corporation (Denver, USA) and K-UTEC AG Salt Technologies (Germany) in conjunction with IBU-TEC Advanced Materials AG (Germany). The design is based on running calcination and crystallization on a 24-hour basis with the rest of the process on an 8-hour basis based on the equipment sizing. It is anticipated that our lithium clay will be calcined at a rate of 12 tonnes per day and battery grade lithium carbonate will be extracted at a rate of 60 kg per day. During the operation, approximately 280 kg per day of fertilizer grade potassium sulphate will also be recovered as a byproduct. The plant includes all the key process equipment envisioned for the commercial facility at a size that will allow easy scale up to the commercial design.
In preparing for the Lithium Demonstration Plant, Western Lithium has conducted a verification large bulk test of approximately 1.5 tonnes at IBU-TEC calcination facility in Germany to obtain the operating profiles necessary for the calciner design. The operation was run for three days at a maximum capacity rate of 1.2 tonnes per day and indicated good correlation with the design criteria selected for the Project's NI 43-101 Prefeasibility Study. The calcine test also demonstrated good lithium extraction performance (85%-92% water leach recovery) in-line with the Prefeasibility Study.
The Lithium Demonstration Plant is intended to establish the cost competitiveness of Western Lithium's technology and potential process control advantages of extracting lithium from the lithium-rich clay, in order to attract additional funding to build the Project.
The US$1.5 million funding is part of the strategic investment by Orion (see news release dated September 23, 2013). Additional funding of US$4 million (for a total of US$22 million) remains available from Orion, pursuant to the Royalty Financing, which funds are expected to be drawn down in the next several months subject to the completion of certain corporate milestones, including the advancement of the HECTATONE™ Organoclay Plant located in Fernley, Nevada, which is scheduled for commissioning in the summer of 2014.
Source: http://www.westernlithium.com/