All amounts are in U.S. dollars unless otherwise indicated.
TORONTO, July 20, 2016 /CNW/ - Enirgi Group Corporation ("Enirgi Group" or the "Company"), is pleased to announce its strategy for lithium production at its 100% owned Salar del Rincón commercial lithium carbonate development project (the "Rincón Project"), located in the Province of Salta, Argentina. The global demand for lithium is expanding rapidly in response to the growing needs of the electric vehicle and power storage markets. This strategy sets out a pathway for the creation of a global lithium business centred around Enirgi Group's assets in Argentina.
Enirgi Group's President and CEO, Mr. Wayne Richardson, has recently been in Argentina to brief key stakeholders at the federal and provincial levels regarding Enirgi Group's overall lithium strategy and the Company's plans to emerge as a leading high quality, low cost producer of lithium compounds. Mr. Richardson unveiled a strategy to develop and invest in lithium production in Argentina utilizing the Company's proprietary Direct Extraction Process Technology ("DEP Technology") for lithium brines, and to position Argentina and Enirgi Group at the centre of the global lithium supply chain.
| HIGHLIGHTS OF ENIRGI GROUP'S LITHIUM STRATEGY
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Mr. Richardson commented, "Enirgi Group's plans are well advanced and through the development of our disruptive direct extraction process technology, we are able to produce high quality lithium product from raw brine to bag within 24 hours, radically reducing the processing time through the elimination of pre-concentration ponds. Not only does this ensure efficient use of capital, we believe that our process yields the highest recovery rates in the industry and has a very low environmental impact. These features provide us with a competitive edge and the confidence to announce and prosecute our plans to become one of the world's leading high quality, lowest cost quartile producer of lithium compounds with a target to bring the first 50,000 tonnes of production online in 2019."
Rincón Project Development
Since 2008, Enirgi Group and its parent, The Sentient Group of Global Resource Funds ("Sentient Group"), have been actively progressing the Rincón Project. Combined they have invested approximately $200 million in the Rincón Project, including, acquisition costs, mineral resource and reserve definition, proprietary technology development and testing and infrastructure construction. The Company has significant operational and lithium sales experience having undertaken a campaign of operations at the Salar del Rincón and the construction of a commercial scale demonstration plant. Enirgi Group's Chemicals Division employs over 85 individuals on site and in Salta, Argentina, including key geological, operational, legal, financial and administrative staff.
The Chemicals Division is supported by a team of over 100 professional engineers, mechanical tradesmen and electrical tradesmen from Enirgi Group's Innovation Division in Sydney, Australia.
Enirgi Group's exploration, drilling and resource definition work at the Salar del Rincón has been undertaken in conjunction with SRK Consulting (U.S.), Inc. ("SRK") over the past seven years. The geological work has resulted in three independent mineral resource estimates produced by SRK with each providing greater certainty of the Salar del Rincón's mineral resource potential. The resource estimates were followed by a pre-feasibility study on the Rincón Project in 2015 and, most recently, the DFS on the Rincón Project, as previously announced by the Company on July 7, 2016.
Direct Extraction Process Technology
Enirgi Group's Innovation Division has developed its proprietary DEP Technology in conjunction with the Australian Nuclear Science and Technology Organisation ("ANSTO"). The DEP Technology has undergone successful lab, bench and demonstration scale testing and was validated by ANSTO as part of the DFS. A notable highlight of the innovative DEP Technology is that it does not utilize a network of solar concentration ponds which, as a result, will significantly minimize impact on flora and fauna. Additionally, it is economical – the DFS estimates a total cash operating cost of $2,070 per tonne of LCE, which is anticipated to fall within the lowest-cost quartile when compared to other lithium brine and hard rock producers. The successful working relationship between Enirgi Group's Innovation Division and ANSTO has resulted in a formal research relationship between the parties on lithium brine extraction technologies pursuant to a lithium project development agreement.
Rincón Plant Construction
The DFS supports the construction of the Rincón Plant with an ungeared NPV (9%) of $1.36 billion and a 24.5-year mine life. The capital expenditure for the Rincón Plant is projected at approximately $720 million (including contingency).
Enirgi Group is currently in discussions with Sentient Group and other strategic partners with respect to funding options for the Rincón Plant, which may include applying to list Enirgi Group on a major North American stock exchange.
Concurrent with progressing the detailed engineering of the Rincón Plant, Enirgi Group is evaluating the ability to produce lithium hydroxide in addition to lithium carbonate. The Company expects to undertake final demonstration scale tests on site in early 2017, prior to commencing formal construction of the initial 50,000 tpa LCE plant. The DFS estimates an 18-24 month construction schedule from the date of commencement of construction of the Rincón Plant. Subject to receipt of necessary funding and final permitting, the Company is targeting first production from the Rincón Plant in 2019.
Refer to Figure 1 – Initial 50,000 tpa Rincón Plant General Layout (3D Isometric View)
Refer to Figure 2 – The modular lithium demonstration plant tested in Sydney, Australia with brine sourced from the Salar del Rincón
Argentina Investment
The Company believes that Argentina is well-positioned to accelerate the development of its lithium-rich brine deposits to become a world leader in lithium production.
"Our investments to date in Salta Province have been well received by government which continues to be a strong supporter of the Rincón Project," noted Mr. Richardson. "Salta's reputation as a leading Province in Argentina for both geological attractiveness and mining regulation is well deserved. When this is combined with the new federal government's recent initiatives to stimulate the mining industry through the elimination of taxes on mining exports and the relaxation of restrictions on the import of goods and foreign exchange requirements, we see Argentina quickly positioning itself to advance to the forefront of future lithium development and production."
Regional Processing Facility
The Company believes that the economic fundamentals for lithium brines in Argentina will support scaling-up production at the Rincón Plant in the future beyond the current planned production capacity of 50,000 tpa of LCE.
"Roskill Consulting Group Ltd. and Global Lithium LLC are both forecasting significant increases in demand for lithium compounds by 2020 beyond current production estimates that will need to be filled by expansion from current lithium producers or new lithium projects coming on-line. Enirgi Group's studious approach to developing its lithium brine resource and direct extraction process technology allows us to understand the challenges facing new entrants in the lithium brine production market, particularly if the new entrants attempt to develop new extraction and processing techniques or attempt to improve on the relatively expensive traditional evaporative brine extraction techniques", noted Mr. Anthony Deal, Enirgi Group's VP Corporate Development. "Accordingly, large-scale, well-funded producers with low-cost technologies will be the best positioned to meet the anticipated lithium production gap."
The Salar del Rincón's geographic location, relative to other lithium-rich brine deposits situated in the lithium triangle (Argentina, Chile, Bolivia), positions the site favourably to unlock the region's lithium brine resources through a regional processing facility. The Salar del Rincón is also situated in close proximity to key infrastructure, including existing natural gas pipeline, electricity, rail and road transport that is required to build and support a regional processing facility and its expanded production capacity.
Refer to Figure 3 - Location of the Salar del Rincón, Salta Province, Argentina
The Rincón Plant's modular design would allow it to scale-up production capacity beyond the initial 50,000 tpa LCE nameplate capacity contemplated in the DFS to meet increased demand, should market conditions warrant. The Company owns nearly 100% of the lithium mining rights on the 232 km2 halitic zone of the Salar del Rincón and will plan to undertake the geological work necessary to convert additional mineral resources into mineral reserves as part of a feasibility program on an expanded Rincón Project.
In addition, Enirgi Group's Chemical Division and Innovation Division are working on strategies to leverage the application of the DEP Technology to other lithium brine resources in the region. The strategies may include the application of DEP Technology at other lithium salars, adapting the technology to produce an intermediate grade product at other regional lithium salars with final processing at the Salar del Rincón, and/or securing and supplying brine feedstock for the Rincón Project from other lithium brine salars.
"We are examining strategies that could involve the expansion of the Rincón Project into a Regional Processing Facility for lithium brines with the potential to meet 25-30% of future estimated global demand", noted Mr. Richardson.
Qualified Person
The DFS was summarized in the form of an independent technical report dated June 3, 2016 (with an effective date of February 24, 2016) prepared in accordance with NI 43-101 of the Canadian Securities Administrators and Staff Notice 43-704 of the Ontario Securities Commission. A summary of the DFS is included the Company's news release dated July 7, 2016 disseminated on MarketWired. The material scientific and technical information relating to the DFS contained in this news release has been reviewed and approved by Mr. Terry Braun, P.E., Principal Consultant, SRK Consulting (U.S.) Inc., an independent Qualified Person within the meaning of NI 43-101.
ABOUT ENIRGI GROUP
Enirgi Group is a privately held specialty chemicals and diversified industrial company with six unique divisions that own and operate a portfolio of high-quality assets and operations located around the world. Enirgi Group's Chemicals Division is advancing the development of Enirgi Group's lithium project located in the province of Salta, Argentina. Enirgi Group is focused on developing innovative technologies to sustainably progress a number of development projects around the globe with the goal of becoming a leading low-cost, high quality producer of specialty chemicals and energy storage solutions.
Enirgi Group is wholly-owned by Sentient Group. The Sentient Group Limited is an independent private equity investment firm specializing in the global resources industry with over $2.7 billion of assets under management in metal, mineral and energy assets across the globe.
Cautionary Note Regarding Forward looking statements
This news release contains forward-looking statements about the Company, the Rincón Project and its business. Forward-looking statements are statements that are not historical facts and are based on certain assumptions relating, but not limited to: resource and reserve estimates, estimated NPV, anticipated mining and processing methods for the Rincón Project, the estimated economics of the Rincón Project, estimated capital costs, timing for commencement of construction and production from the Rincón Project, receipt of necessary funding and permitting for the Rincón Project, the successful commercialization of the Direct Extraction Process, the listing of Enirgi Group on a stock exchange, the expansion of the Rincón Project into a Regional Processing Facility, the application of the DEP Technology to other lithium salars, the ability of Enirgi Group to meet any amount of future lithium demand from its production and global lithium demand and consumption. While the Company considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. The forward-looking statements in this news release are subject to various risks, uncertainties and other factors that could cause the Company's actual results or achievements to differ materially from those expressed in or implied by forward looking statements. These risks, uncertainties and other factors include, without limitation, risks related to uncertainty in the demand for lithium and pricing assumptions; uncertainties related to raising sufficient financing to fund the project in a timely manner and on acceptable terms; changes in planned work resulting from logistical, technical or other factors; not meeting a stock exchange's listing or eligibility requirements; the possibility that results of work will not fulfill expectations and realize the perceived potential of the Company's properties; uncertainties involved in the estimation of lithium reserves and resources; the possibility that required permits may not be obtained on a timely manner or at all; the possibility that capital and operating costs may be higher than currently estimated and may preclude commercial development or render operations uneconomic; the possibility that the estimated recovery rates may not be achieved; risk of accidents, equipment breakdowns and labor disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in the work program; and risks related to projected project economics, recovery rates, and estimated NPV and anticipated IRR and other factors. Forward-looking statements are based on the beliefs, opinions and expectations of the Company's management at the time they are made, and other than as required by applicable securities laws, the Company does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances, should change.
SOURCE Enirgi Group Corporation
Image with caption: "Figure 1 - Initial 50,000 tpa Rincón Plant General Layout (3D Isometric View) (CNW Group/Enirgi Group Corporation)". Image available at: http://photos.newswire.ca/images/download/20160720_C5335_PHOTO_EN_736879.jpg
Video with caption: "VIDEO: Figure 2 - The modular lithium demonstration plant tested in Sydney, Australia with brine sourced from the Salar del Rincón". Video available at: http://stream1.newswire.ca/cgi-bin/playback.cgi?file=20160720_C5335_VIDEO_EN_737761.mp4&posterurl=http%3A%2F%2Fphotos.newswire.ca%2Fimages%2F20160720_C5335_PHOTO_EN_737761.jpg&order=2&jdd=20160720&cnum=C5335
Image with caption: "Figure 3 – Location of the Salar del Rincón, Salta Province, Argentina (CNW Group/Enirgi Group Corporation)". Image available at: http://photos.newswire.ca/images/download/20160720_C5335_PHOTO_EN_736883.jpg
Enirgi Group Corporation, Jessica Helm, VP Corporate Communications, 1 Adelaide Street East, Suite 3001, Toronto, Ontario, Canada M5C 2V9, P | + 1 416 956 5122 E | [email protected] W | enirgi.com
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