Column: Benchmarking Canada’s hard rock lithium projects

Canada has actually seen a rise in acid rock lithium expedition and growth task complying with the exploration of Patriot Battery Metals’ worldwide considerable Corvette (CV5) pegmatite in Quebec in 2021, the implementation of the United States Rising Cost Of Living Decrease Act (INDIVIDUAL RETIREMENT ACCOUNT) which incentivizes “friendshoring” of supply chains, and a rally in international lithium costs that came to a head in 2022. A host of usefulness researches arised in between 2023 and 2025, the most up to date of which Adamas Knowledge benchmarked in this understanding.

Existing manufacturers of spodumene concentrate consist of the twice insolvent and re-capitalized North American Lithium mine in Quebec (a joint endeavor in between Sayona Mining and Piedmont Lithium), the Chinese-owned Tanco mine in Manitoba, and Quebec’s Whabouchi mine because of be appointed in 2025 after likewise arising from insolvency procedures.

Spodumene focuses have actually primarily been exported to China for chemical conversion. Localization of conversion ability has actually been pictured for years, yet a variety of elements consisting of the seclusion of Canada’s spodumene endowments, the limited success of spodumene concentrators along with the immaturity of lithium refining copyright and skillset growth, have actually suggested these ventures have actually fallen short to draw in financial investment.

Tesla has actually taken it upon itself and is presently appointing a conversion center in Texas (with offtake from the North American Lithium mine), while Rio Tinto is intending to appoint a conversion center in Bécancour incorporated with the Whabouchi mine in 2026.

The exceptional accomplice of Canadian acid rock lithium designers are progressively touching technological and moneying companions to help task growth. One such instance is Frontier Lithium which lately authorized a joint endeavor contract with Mitsubishi Company of Japan. Both rural and government governments have actually likewise promised financial backing for the task.

In Might this year, Frontier Lithium launched a Clear-cut Expediency Research Study for the PAK spodumene concentrator in Ontario. To standard the outcomes, Adamas Knowledge contrasted PAK to 7 chosen spodumene concentrate tasks which vary in precision from Initial Financial Analysis to Expediency Research study degrees.

Initially, funding strength is determined taking life-of-mine funding demands on a per tonne generated (lithium carbonate comparable had in spodumene concentrate) basis, gross of federal government tax obligation credit scores, such as the government Clean Modern technology Production Financial Investment Tax Obligation Credit History (CTM-ITC).

Following, predicted operating expense are gotten into the 5 price facilities– mining, handling, transportation, basic and management, and maintaining and closure. The outcomes exist on a per tonne 6.0% Li2O spodumene concentrate comparable basis.

Note: Price-dependent elements such as aristocracies and bi-product credit scores are left out. Closure prices are likewise inconsistently made up in the researches.

Frontier Lithium’s PAK displays as a high CAPEX, reduced OPEX task.

The 1.0 Mtpa concentrator is readied to set you back US$ 688M which is extremely high by international criteria. This remains in component because of the loved one seclusion of the task in northwestern Ontario.

PAK has the highest possible book quality of the team, at 1.51% Li2O.

Its fine-grained spodumene ore requires a whole-of-ore froth floatation plant, conceptually comparable to lately appointed Kathleen Valley mine in Western Australia and Ganfeng Lithium’s Goulamina mine in Mali.

The thick, up and down dipping ore bodies, offer to reduced strip proportion, low-priced open pit mining.

In spite of whole-of-ore froth floatation putting higher needs on comminution and product handling, PAK’s handling prices approach peers that have actually taken on thick media splitting up procedure layouts like the Adina and Galaxy tasks.

PAK’s concentrate transportation prices are likewise reduced, offered distribution is established for the presumptive chemical plant place in Rumbling Bay on Lake Superior, Ontario. The Seymour task shares this particular.

On the other hand, the staying 6 tasks in Quebec supply to ports on the St. Lawrence River, with straight accessibility to worldwide markets by means of sea products. On this basis, contrast of transport prices is not like-for-like.

The staying price facilities, G&A and maintaining funding, show the research supervisors’ different strategy to set you back allotment and capitalization as they concern reporting criteria (JORC vs. NI 43-101). Inevitably, these can be fixed up within stabilized reward costs, IRR or NPV computations.

To integrate both funding and running price metrics without using affordable capital designs, a reward cost is created with the devices USD per tonne SC6.0% Li2O:

Note: It is presumed the tasks target an IRR of 20%, and complete business tax obligations (rural and government) are 31.5% in Ontario and 38% in Quebec.

$ 1,500/ t SC6 is commonly taken into consideration a suitable cost to incentivize the called for quantities of spodumene concentrate to fulfill long-term need. To accomplish 20% IRR, a minimal price of return commonly approved by sector, PAK calls for a prices setting of around $1,500/ t SC6. Comparative to Canadian peers, and absolutely in a worldwide context, PAK shows limited business economics.

Optimistically, PAK’s reward cost is less than the lately built Whabouchi mine per its December 2022 pre-feasibility research. It deserves highlighting Whabouchi’s costings likewise consisted of sunk CAPEX as the “half-completed plant” was re-capitalized, and the flowsheet reenvisioned under the brand-new proprietors– Rio Tinto and the government-owned Investissement Quebec.

In concept, PAK’s usefulness research degree costings will certainly be much more traditional than fifty percent of the colleagues evaluated at PEA or PFS degrees.

PAK is likewise distinctly nobility cost-free within the colleagues. By comparison, Winsome’s Adina task will certainly pay a 4% NSR, which at $1,500 SC6 cost includes $55/t SC6 to its price account (this has actually not been taken into consideration within the above computations).

If we take into consideration Moblan and Galaxy as tactically crucial development tasks for Sayona Mining (quickly to be Elevra Lithium) and Rio Tinto, specifically, what remains are 5 front runner tasks held by detailed younger mining firms.

Simply put, it might be excessively hard for outdoors funding to join these tasks, therefore deep space of pure-play eastern Canadian spodumene possibilities diminishes, and PAK after that rates behind Adina and Shaakichiuwaanann.

With this glass-half-full viewpoint, 3rd location is a reputable setting. In our sight, the task has the possible to draw in the required funding and advancement right into building and construction, yet just in an extended, pro-cyclical cost setting, and just where friendshoring essential mineral supply chains are the order of business.

* Christopher Williams is an expert with Adamas Knowledge Battery Metals Projection Solution.