Consolidated Lithium gives Kwyjibo rare earths project a $1.4B value

Consolidated Lithium Metals (TSXV: CLM; US-OTC: JORFF) put a $1.4-billion (US$987 million) after-tax net present value on its Kwyjibo rare earths project in Quebec, which hosts a resource made up of one-fourth heavy rare earths.

The updated preliminary economic assessment (PEA) for Kwyjibo, about 650 km northeast of Quebec City in the Côte-Nord region, estimates a 35% after-tax internal rate of return (at 8% discount), two-year payback and $881-million development cost. The underground mine is to produce an average 9,800 tonnes of total rare earth oxides (TREO) a year over 10 years.

“As North America works to establish strategic rare earth stockpiles to strengthen domestic supply chains, Kwyjibo is well positioned to contribute to this objective,” CEO Richard Quesnel said in a Thursday news release.

The study highlights Kwyjibo’s relatively high proportion of valuable heavy rare earths, particularly dysprosium and terbium, alongside economics that could support development of an underground mine in Quebec.  

Shares rose 25% or 1.5¢ to 7.5¢ apiece Thursday in Toronto, which gives it a market capitalization of $41 million.

The new PEA updates a 2018 study prepared for SOQUEM, a subsidiary of Investissement Québec, and recasts Kwyjibo as a smaller-footprint underground mine with processing moved off the mine site.

Critical resource

Dysprosium, terbium, neodymium, praseodymium and yttrium would account for 91% of project revenue. Critical rare earth oxides make up 45.5% of Kwyjibo’s rare earth distribution, including 24.5% of the heavy rare earths dysprosium, terbium and yttrium, and about 20% of light rare earths neodymium and praseodymium.

Kwyjibo hosts 8.48 million measured and indicated tonnes grading 2.45% TREO, for about 208,000 contained tonnes. Inferred resources add 1.83 million tonnes grading 3.27%, for about 60,000 contained tonnes.

The Josette Northeast zone carries the higher grade, with 4.14 million measured and indicated tonnes grading 3.42% TREO. Josette Southwest adds 4.34 million measured and indicated tonnes grading 1.53%.

Operating costs are pegged at $17.50 per kg of TREO, against assumed oxide revenue of $79.75 per kilogram.

The project covers 81 claims across 43.8 sq. kilometres. Mineralization has been traced over about 1.2 km of strike and to 300 metres depth and remains open at depth and along parts of strike. The resource is based on 109 surface drill holes totalling 19,168 metres.

Mine plan

The updated plan trims the Kwyjibo mine site to 300,000 sq. metres – about three soccer fields – and removes the crusher, concentrator, processing plant, ore stockpile, waste rock dump and surface tailings from the mine.

A 190,000-sq.-metre processing complex would sit about 80 km south of the deposit at an industrial site near Quebec hydro power. The site is about 10 km west of the 25-megawatt (MW) Courbe-du-Sault hydro plant and less than 3 km from two high-voltage transmission lines.

The project would need about 35 MW of power. Consolidated Lithium says the deposit’s mineralogy avoids conventional roasting, a costly and power-heavy step used in some rare earth flowsheets.

Non-inert process waste would be returned underground as cemented backfill. Inert, non-acid-generating waste is to go to a lined 660,000-sq.-metre dry-stack area within the processing complex. A 144-km access road would link the mine and plant, with sealed trucks moving ore and residues.

Consolidated Lithium can earn up to 80% of Kwyjibo under a definitive option agreement with SOQUEM. The agreement gives the Toronto-based junior a development asset outside its six lithium exploration projects in Quebec’s Abitibi region.

The company estimates Kwyjibo would support 700 construction jobs, 300 direct jobs and 900 indirect jobs.

Next steps

The project needs more metallurgical work, permits, a feasibility study and agreements with nearby communities before it can advance toward construction.

Consolidated Lithium plans consultations with the Innu of Takuaikan Uashat Mak Mani-Utenam, the Innu of Ekuanitshit and communities across the Minganie regional county municipality. It also plans more processing studies to test whether the proposed flowsheet and underground return of some process waste can meet environmental requirements.