Lithium Carbonate Plants

from Brines
CAPEX and OPEX estimation and
analysis

Prepared for 10th Lithium Supply & Markets Conference

By Eduardo Montegu Gerard
June 26th, 2018

This material has been prepared by WorleyParsons based on public information available on internet.
Agenda

1. Lithium Projects in Salars (Salt

Flats)
2. How to obtain CAPEX/OPEX
3. CAPEX
4. OPEX
5. IRR
6. In closing
7. Q&A

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 Lithium Projects in Salars

• Brine is obtained from wells and

concentrated using solar evaporation, then
impurities are precipitated using reagents (lime-
soda ash) and finally Lithium Carbonate is
produced.
• Lithium Hydroxide is produced
from Lithium Carbonate
3
Lithium Triangle
South America

The Lithium Triangle is

known to be the
geographical zone located
in South America,
between Argentina,
Bolivia and Chile, where
around 66% of the
lithium reserves are
concentrated.

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Data Base Experience in Lithium Projects

Over the las 25 years, WorleyParsons has developed the following main projects:
• 1995-1996 – SQM – Basic and detailed engineering for 10 ktpa of Li2CO3
• 1998-2002 – SQM – Basic and detailed engineering for 27 ktpa and 32 ktpa of Li2CO3
• 2005-2004 – SQM – Expansion and Modifications for 40 ktpa of Li2CO3
• 2004-2010 – SQM – Corporate Projects - Expansions and Modifications
• 2010-2012 – Lithium Americas – Cauchari Project – PEA and Basic Engineering
• 2013 – Lithium One – Conceptual Engineering
• 2015-2017 – SQM Project – Lithium Carbonate and Lithium Hydroxide Plant Expansion
• 2017-2018 – Millennial Lithium Corp. – Pastos Grandes Project – PEA
• 2017-present – SQM Project – Lithium Carbonate Plant Expansion
• 2017-present – Minera Salar Blanco – Blanco Project – PEA, Feasibility Study and EIA support
• 2017-present– Lithium Americas – Lithium Nevada Project – PEA
• 2017-present – International Lithium Corp. – Mariana Project – PEA
• 2018 – present – Advantage Lithium - PEA 5
 Projects used as reference
• LithiumAmericas Project
• Client: Lithium Americas
• Date of release: April 2011-Julio 2012-May 2017
• Argentina
• Sal de Vida Project
• Client: Lithium 1
• Date of release: November 2011
• Argentina
• Proyecto Blanco
• Client: Minera Salar Blanco
• Date of release: December 2017
• Chile
• Pastos Grandes Project
• Client: Millennial Lithium Corp.
• Date of release: February 2018
• Argentina
• 3Q Project
• Neolithium
• Date of release: December 2017
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• Argentina
CAPEX and OPEX analysis
for different Brine
Lithium Projects
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Definitions – CAPEX and OPEX
CAPEX (Capital Expenditures): OPEX (Operating Expenses):
Funds used by a company to acquire, upgrade and Costs for a company to run its business operations. It
maintain physical assets which can include property, mainly includes the following items:
industrial buildings and/or equipment. Often used to
undertake new projects, investments and/or expansions.
CAPEX for Lithium Carbonate Plants mainly include the
following items:

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Source: https://www.investopedia.com/terms/c/capitalexpenditure.asp
How to CALCULATE the CAPEX/OPEX
Building a CAPEX

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 US$ / Tonne
Description - Operation Costs Total 000 US$
Li2CO3

Building an OPEX DIRECT COSTS

Chemical Reactives and Reagents

Salt Removal and Transport
1.500
500
38
13
Energy 300 9
Manpower 160 1
Catering & Camp Services 190 5
Maintenance 300 8
Transport 150 4

DIRECT COSTS SUBTOTAL 3.100 78

INDIRECT COSTS

General & Administration - Local 80 2

INDIRECT COSTS SUBTOTAL 80 2

TOTAL PRODUCTION COSTS 3.180 80

US$ / Tonne
Description Formula
Li2CO3

LITHIUM CARBONATE PLANT

Calcium Oxide CaO 670

Soda Ash Na2CO3 720
Sulphuric Acid (33%) H2SO4 4
Extractant Iso-octanol 20
Diluent SCAID 4
Boron Removal Phase Modifier C12H27O4P 3
Hydrochloric Acid (33%) HCl 50
Sodium Hydroxide (100%) NaOH 20
Carbon Dioxide CO2 20
-
CHEMICAL CONSUMPTION TOTAL 1.511

HCl kton/y 5,4

Na OH kton/y 0,5
Sol vent kton/y 0,10
Extra ctant kton/y 0,09 Na 2CO3 kton/y 2,3 Na 2CO3 kton/y 43,8

SX Primary Carbonation Secondary Carbonation

Bora tes kton/y 204,4 MgCO3 kton/y 29,2

Ca CO3 kton/y 14,6

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 CAPEX declared in PEA
600 40

CAPEX Analysis 35
500

• Projects analyzed only consider 30

Production capacity (Kton/y)

lithium carbonate production from 400
25
salars (brine)

CAPEX (MUSD)
• CAPEX values evaluated in the PEA 300 20

vary between 181 MUSD and 504

15
MUSD, considering lithium 200
carbonate plants of different
10
capacities (from 20 to 35 ktpa),
also shown in graph 100
5

0 0
Proj 1 (2011) Proj 2 (2011) Proj 3 (2011) Proj 4 (2012) Proj 5 (2017) Proj 6 (2017) Proj 7 (2017) Proj 8 (2018)
or Project number

CAPEX Production capacity

14.000 to 25.000 USD/TPY

* Values updated to May 2018

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All information used in this analysis available at www.sedar.com This material has been prepared by WorleyParsons based on public information available on internet.
 CAPEX declared in PEA
600 40

35
500

30

400

Production capacity (Kton/y)

25
CAPEX (MUSD)

300 20

15
200

10

100
5

0 0
Proj 1 (2011) Proj 2 (2011) Proj 3 (2011) Proj 4 (2012) Proj 5 (2017) Proj 6 (2017) Proj 7 (2017) Proj 8 (2018)
Project number

CAPEX Production capacity

CAPEX today 14.000 to 25.000 USD/TPY 12

This material has been prepared by WorleyParsons based on public information available on internet.
CAPEX Analysis - Distribution by item (%)

Main contributors to the CAPEX:

• Evaporation ponds
• Lithium carbonate plant
• Others (which include EPCM, freight
and insurance, startup, owner´s
cost, customs duties, among others)

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This material has been prepared by WorleyParsons based on public information available on internet.
OPEX Components

• Chemicals
• Energy
• Manpower
• Maintenance
• Catering & Camp Service
• Transport

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 OPEX declared in PEA
OPEX Analysis 4,000 40

35

Plant Production Capacity (ktpa)

30

mUSD/ton Li2CO3
3,000
25
• Opex today varies between 2,500 and 20
4,000 USD/ton Li2CO3 15
2,000
• Projects defined both in Argentina and 10

Chile 5

1,000 0
Proj 1 (2011) Proj 2 (2011) Proj 3 (2011) Proj 4 (2012) Proj 5 (2017) Proj 6 (2017) Proj 7 (2017) Proj 8 (2018)
Project number

OPEX 2,500 to 4,000 USD/ton OPEX Average Capacity (ktpa)

* Values updated to May 2018

15
Source: NI 43-101 for each Project.
All information used in this analysis is available at www.sedar.com
This material has been prepared by WorleyParsons based on public information available on internet.
 OPEX declared in PEA
4,000 40

35

30

Plant Production Capacity (ktpa)

3,000
25
mUSD/ton Li2CO3

20

15
2,000

10

1,000 0
Proj 1 (2011) Proj 2 (2011) Proj 3 (2011) Proj 4 (2012) Proj 5 (2017) Proj 6 (2017) Proj 7 (2017) Proj 8 (2018)
Project number
OPEX Average Capacity (ktpa)

OPEX today 2500 to 4000 USD/ton

Projects defined both in Argentina and Chile 16

This material has been prepared by WorleyParsons based on public information available on internet.
OPEX Analysis - Distribution by item (%)

Main contributors to the OPEX:

• Reagents
• Salt removal
• Energy

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This material has been prepared by WorleyParsons based on public information available on internet.
 IRR After Tax
IRR Analysis 50%

• The analysis is valid for the 40%

production of lithium carbonate using

brines obtained from salars

Percentage (%)
30%

20%

10%

IRR 20 % to 30% 0%
Proj 1 (2011) Proj 2 (2011) Proj 3 (2011) Proj 4 (2012) Proj 5 (2017) Proj 6 (2017) Proj 7 (2017) Proj 8 (2018)
Project number

18
All information used in this analysis available at www.sedar.com This material has been prepared by WorleyParsons based on public information available on internet.
IRR After Tax
IRR After Tax
50%

40%

30%
Percentage (%)

20%

10%

0%
Proj 1 (2011) Proj 2 (2011) Proj 3 (2011) Proj 4 (2012) Proj 5 (2017) Proj 6 (2017) Proj 7 (2017) Proj 8 (2018)
Project number
19

This material has been prepared by WorleyParsons based on public information available on internet.
Potential aspects that could
improve/destroy a CAPEX and/or OPEX
• Brine Process
• Lack of Pilot Plant
• Weather Conditions
• Distances
• Differences in projects between soil
mechanics/topography
• ………

………to be continued
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In Closing

 New projects will be located in

locations increasingly further and of
difficult access
 The CAPEX/ton LCE, will continue
growing
 The OPEX/ton LCE, will continue
growing
 IRR will continue to be profitable

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Lithium Projects
Our continuous work over the last 25 years in brine processing, allows us
to offer:
• An understanding of the client’s requirements
• Capability and experience to define processes involved in each project
• Applying the lessons learned
• Market knowledge and bench-marks with existing plants
• Fit of purpose for junior lithium companies
• Programming of the project, from prefeasibility to plant start-up
• An in house database for all costs and prices required for the
estimation of CAPEX and OPEX.
• Specialists in all disciplines (Process, Mechanical, Piping, Civil,
Structural, Electrical, Instrumentation & Control, cost estimation,
Scheduling) with extensive experience in Lithium Projects.
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&
DISCLAIMER
This presentation has been prepared by a representative of WorleyParsons.

The presentation contains the professional and personal opinions of the presenter, which are given in good faith. As such, opinions presented herein may not always necessarily reflect the position of WorleyParsons as a whole, its officers
or executive.

Any forward-looking statements included in this presentation will involve subjective judgment and analysis and are subject to uncertainties, risks and contingencies—many of which are outside the control of, and may be unknown to,
WorleyParsons.

WorleyParsons and all associated entities and representatives make no representation or warranty as to the accuracy, reliability or completeness of information in this document and do not take responsibility for updating any information
or correcting any error or omission that may become apparent after this document has been issued.

To the extent permitted by law, WorleyParsons and its officers, employees, related bodies and agents disclaim all liability—direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of
WorleyParsons and/or any of its agents)—for any loss or damage suffered by a recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information.