Bearing Announces Results of Definitive Feasibility Study
Vancouver, January 22, 2019 - Bearing Lithium Corp. (TSXV: BRZ) (OTCQB: BLILF) (FSE: B6K2) ("Bearing" or the "Company") is pleased to announce the results from a Definitive Feasibility Study ("DFS") for the Maricunga Lithium Project (the "Maricunga Project") prepared in accordance with National Instrument 43-101 ("NI 43-101"). The report was prepared by WorleyParsons for the Maricunga joint-venture company, Minera Salar Blanco ("MSB"), and will be filed on SEDAR (www.sedar.com) within the coming days. The Maricunga Project is wholly owned and operated by the joint-venture company, Minera Salar Blanco ("MSB") and Bearing holds an 18% interest in MSB along with Minera Salar Blanco SpA at 31% and Lithium Power International at 51%.
NI 43-101 Definitive Feasibility Study (DFS) Highlights
- The Maricunga Lithium Brine project's Definitive Feasibility Study (DFS) supports 20,000 tonnes per annum (t/a) production of lithium carbonate (LCE) over 20 years.
- Project NPV1 (levered basis) of US$1.302B before tax at 8% discount rate, providing an IRR of 29.8% and a 3.4-year payback.
- Operating cost places Maricunga among the most efficient producers with an OPEX of US$3,772 per tonne (/t) without any credits from the potassium chloride (KCl) by-product, as KCI production was not considered in the DFS.
- Project Direct Development Cost estimated at US$456M, with Indirect Costs of US$45M and Contingency Costs of US$63M, providing a total CAPEX for the project of US$563M.
- Maiden reserve estimate prepared in accordance with NI 43-101 guidelines, account for a total of 742,000 tonnes of LCE2, exceeding the project mine life production estimate.
- Project infrastructure including water rights have been secured through long term contracts for project construction and operation. Access to the National Power Grid has been granted by the corresponding authorities, thus assuring future power supply.
- DFS completed by Tier-1 engineering consultancy WorleyParsons (excluding the Reserve and Resource Estimate prepared by FloSolutions). Accuracy of Operating and Capital Cost estimates expected within a +/- 15% range.
- Discussions with major Chilean and international financial institutions to secure project development finance for the project have commenced and expected to be finalized during 2019. Approaches from international companies have been received regarding off-take agreements and future participations.
- Continuing to work with the Chilean Government and other corporate bodies to finalize all remaining licenses, agreements and operational relationships.
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1 Assumes a 50% leverage. On an unlevered basis, the pre-tax NPV is US$1.286B, providing an IRR of 23.8% and a 4.1-year payback.
2 Adjusted for 58% lithium process recovery efficiency, total LCE reserves are 430,000 tonnes.
Minera Salar Blanco's Chief Executive Officer, Cristobal Garcia-Huidobro, commented:
"The Company is very pleased to advise of the successful completion of the Definitive Feasibility Study to international standards, on its Maricunga lithium brine project, with highly experienced engineering company Worley Parsons. The strong economics detailed in the DFS confirms the overall attractiveness of the project, as previously identified in the PEA study. The project, through its Joint Venture partner company, Minera Salar Blanco, is now poised to take the project to the next stages of development. Priorities will now shift to secure financing for the project and off-take agreements for the high purity lithium carbonate output."
Bearing Lithium's Chief Executive Officer, Jeremy Poirier, commented:
"We are excited with the results of the DFS study that not only highlight the Maricunga project's economic viability but also its low-cost competitiveness relative to other lithium projects globally. This DFS marks a transformational step for the company as it firmly places the Maricunga as one of the most advanced, pre-production lithium brine projects globally."
Definitive Feasibility Study Summary and Key Highlights
The Definitive Feasibility Study (DFS) reserve estimates of 742,000 tonnes of LCE (203,000 Proven - 539,000 Probable), supports the 20,000 tonnes per annum (t/a) projected for Maricunga throughout its 20 years mine life (c.f. Figure 1). Resources were updated to a total of 2,070,000 tonnes of LCE and reclassified as Measured or Indicated Resources in conformance to NI 43-101 definitions. (c.f. Figure 2).
Figure 1: Maricunga Lithium Reserve Estimate
| Concession | Category | Year | Brine Vol | Li | Li | LCE |
| (Mm3) | (mg/l) | (tonnes) | (tonnes) | |||
| Old code | Proven | 1-7 | 21 | 1,051 | 22,000 | 115,000 |
| Probable | 1-18 | 42 | 1,068 | 45,000 | 241,000 | |
| Litio 1-6 | Proven | 7-14 | 14 | 1,184 | 17,000 | 88,000 |
| Probable | 14-23 | 48 | 1,170 | 56,000 | 298,000 | |
| Total | 125 | 1,117 | 139,000 | 742,000 |
Notes to the reserve estimate:
Reserves presented without accounting for lithium process recovery efficiency
The effective date for the Reserve Estimate is January 15, 2019.
The Qualified Person for this Mineral Reserve estimate is Frits Reidel, CPG
Lithium is converted to lithium carbonate (Li₂CO₃) with a conversion factor of 5.32
Numbers may not add due to rounding.
Figure 2: Updated Maricunga Mineral Resource Estimate
| Measured | Indicated | M&I | ||||
| Li | K | Li | K | Li | K | |
| Area (km²) | 18.88 | 6.43 | 25.31 | |||
| Aquifer Volume (km³) | 3.05 | 1.94 | 5.00 | |||
| Mean Specific Yield (Sy) | 0.04 | 0.11 | 0.07 | |||
| Brine Volume (km³) | 0.13 | 0.21 | 0.35 | |||
| Mean Grade (g/m³) | 48 | 349 | 128 | 923 | 79 | 572 |
| Concentration (mg/L) | 1,175 | 8,624 | 1,153 | 8,306 | 1,167 | 8,500 |
| Resource (tonnes) | 146,000 | 1,065,000 | 244,000 | 1,754,000 | 389,000 | 2,818,000 |
| Lithium Carbonate (Li₂CO₃) | 2,070,000 | |||||
| Potassium Chloride (KCl) | 5,380,000 | |||||
Notes to the resource estimate:
CIM definitions (2014) were followed for Mineral Resources.
The Qualified Person for this Mineral Resource estimate is Frits Reidel, CPG
No cut-off values have been applied to the resource estimate.
Numbers may not add due to rounding.
The M&I Resources are inclusive of those Mineral Resources modified to produce the Mineral Reserves
The effective date is December 24, 2018
Lithium is converted to lithium carbonate (Li₂CO₃) with a conversion factor of 5.32
Potassium is converted to potassium chloride (KCl) with a conversion factor of 1.91
The strong economics of the project, with a levered NPV on a pre-tax basis (8% discount) of US$1,302B, providing an IRR of 29.7% and a payback of 3.5 years, confirms the attractiveness of the project. On a pure equity basis, the pre-tax NPV is US$1,286 with an IRR of 23.8% (c.f. Figure 3).
Figure 3: Financial Model Summary (NPV, IRR, Payback)
| 100% Equity | 50/50 Debt:Equity | |||
| Pre-Tax US$M | After-Tax US$M | Pre-Tax US$M | After-Tax US$M | |
| NPV 6% | 1,738 | 1,248 | 1,726 | 1,256 |
| NPV 8% | 1,286 | 908 | 1,302 | 940 |
| NPV 10% | 949 | 653 | 987 | 706 |
| IRR | 23.8% | 21.0% | 29.8% | 26.7% |
| Project Payback | 4.1 yrs | 4.2 yrs | 3.4 yrs | 3.4 yrs |
The project has a potential to generate total life of operations revenues of US$6.93B and EBITDA (earnings before interest, taxes, and depreciation) of US$5.07B. After-tax cash flow over the life of the project is presented in Figure 4.
Figure 4: Annual Cash Flow
To view an enhanced version of Figure 4, please visit:
https://orders.newsfilecorp.com/files/4802/42343_d6d6b60c24d5cb0a_005full.jpg
Operating Cost (OPEX) of US$3,772, places Maricunga among the most efficient producers (c.f. Figure 5 and Figure 6). Production process design, as well as future supply contract for the equipment and production plant, was awarded to Tier-1 German company GEA Messo, one of the leading suppliers in the lithium industry.
Figure 5: Lithium carbonate cash cost curve, including royalties, 2027 (US$/t)
To view an enhanced version of Figure 5 , please visit:
https://orders.newsfilecorp.com/files/4802/42343_d6d6b60c24d5cb0a_006full.jpg
Figure 6: Lithium carbonate cash cost curve, excluding royalties, 2027 (US$/t)
To view an enhanced version of Figure 6, please visit:
https://orders.newsfilecorp.com/files/4802/42343_d6d6b60c24d5cb0a_007full.jpg
DFS price estimates were delivered by Roskill Consulting Group ltd ("Roskill"). Roskill forecasts that the average annual price (in real terms) during the life of the project for battery grade lithium carbonate will be US$ 14,400 /t.
With all the necessary project infrastructure including water and power supply, as well as road and port access now secured, priorities now will shift to secure construction financing for the project. Discussions with major Chilean and international financial institutions to secure project finance for the project have commenced and expected to be finalized during 2019. Also, a number of international companies have approached the joint-venture company for off-take agreements and potential equity participations.
Don Hains, P.Geo., who is a technical consultant to the Company and is a qualified person within the context of National Instrument 43-101, has read and takes responsibility for this news release.
About Bearing Lithium Corp.
Bearing Lithium Corp. is a lithium-focused mineral exploration and development company. Its primary asset is an 18% interest in the Maricunga Lithium Brine Project in Chile. The Maricunga Project represents one of the highest-grade lithium brine salars globally and the only pre-production project in Chile. Over US$30 million has been invested in the Maricunga Project to date and all expenditures through to the delivery of a Definitive Feasibility Study have been fully-funded by the earn-in joint-venture partner.
ON BEHALF OF THE BOARD
Signed "Jeremy Poirier"
Jeremy Poirier, President and CEO
FOR FURTHER INFORMATION PLEASE CONTACT:
Jeremy Poirier-- President and CEO Bearing Lithium - Telephone: 1-604-262-8835Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Statements Regarding Forward Looking Information
This press release includes certain "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of applicable Canadian and United States securities legislation including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein, without limitation, statements relating the future operating or financial performance of the Company, are forward-looking statements.
The words "expect", "target", "estimate", "may", "will" and other similar expressions identify forward-looking statements. These forward-looking statements relate to, among other things, mineral reserve and resource estimates, grades and recoveries, financial forecasts including the net present value and after-tax internal rate of return estimates of the Maricunga Project, projected tax rates, the anticipated life of operations, annual production expectations including cash flows, capital costs, expected operating costs and construction financing. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Bearing's ability to predict or control and may cause Bearing's actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, strategic, legal, planning and other risks, the impact of changes in, or to the enforcement of, laws, regulations and government practices, potential defects in title to the Maricunga Project that are not known as of the date hereof, the occurrence of unexpected financial obligations, fluctuations in the price of lithium and other commodities, fluctuations in the currency markets, changes in national and local government, legislation, taxation, controls, regulations and political or economic developments, risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and flooding), risks related to operational matters and geotechnical issues, the success of future exploration and development activities, the occurrence of any labour unrest, the ability to accurately predict decommissioning and reclamation costs, the risk of budget and timing overruns, potential opposition to the Maricunga Project by local communities and the ability to secure construction financing. Such forward-looking statements are also based on a number of assumptions which may prove to be incorrect including changes in Maricunga Project parameters as plans continue to be evaluated as well as those factors disclosed in the Company's documents filed from time to time with the securities regulators in the Provinces of British Columbia and Alberta. Accordingly, readers should not place undue reliance on forward-looking statements. Bearing undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law.
