Nemaska Lithium Provides Project Construction Update
Press Release
Highlights
- Project construction at both sites currently on track with timeline and budget
- Concentrate production expected to start in H2 2019 with lithium salts production expected in H2 2020
- $272.4M or 31% of the total project budget has been committed
QUÉBEC CITY, Quebec, Oct. 01, 2018 — Nemaska Lithium Inc. (“Nemaska Lithium” or the “Corporation”) (TSX: NMX) (OTC: NMKEF) is pleased to provide a construction project and development timeline update for its Whabouchi mine and electrochemical plant in Shawinigan (the “project”). Guy Bourassa, President and CEO of Nemaska Lithium will be hosting an online conference call on Monday, October 1, 2018 at 11 am EDT. The webcast can be accessed at https://edge.media-server.com/m6/p/nerewhjs and the associated presentation will be available later today for download at https://www.nemaskalithium.com/en/investors/webcast-call/. Dial-in numbers are US/CANADA Participant Toll-Free Number: (866) 353-6129 or US/CANADA Participant International Number: (409) 217-8084. The participant access code is 4097457.
As regards occupational health and safety, the Corporation is pleased to report that, up to this date, there has been no lost time due to injury during the 149,367 construction and engineering hours worked at both Whabouchi and Shawinigan sites.
Following the finalization of the project financing structure on May 30, 2018, and receipt of the first tranche payment (USD $75M) from the Orion Stream on August 23, 2018, the construction is progressing as planned and within anticipated budget allowances at both Whabouchi and Shawinigan locations.
The Corporation will report, along with the dissemination of its quarterly financial results, on the evolution of the project compared to construction schedule and budget. As of September 1, 2018, a total of $272.4M or 31% of the total project budget of $874.7M, including contingency, has been committed. The total budget of $874.7M includes $73.5M already invested by Nemaska Lithium as at November 30, 2017 and identified as sunk costs in the 2018 Feasibility Study.
Guy Bourassa, President and CEO of Nemaska Lithium said “Overall, I am pleased that we are progressing according to plan and within our budget, which includes a contingency allocation of approximately $100M, that was built into the budget as capital investment during the course of the Project. Contingency expenditures are tracking approximately 30% lower than the budget forecast as at September 1, 2018. Given that a large portion of the direct costs have already been committed, this leave more contingency that can be allocated to the indirect and owners’ costs. In addition, to the contingency built in the budget, we have deposited $40M into a restricted bank account as a cost overrun facility.”
| All amounts are in Canadian dollars Expenditures and commitments as of September 1, 2018 |
||||||
| Description | NI-43-101 Budget |
As at Sept 1, 2018 | NI 43-101 Budget remaining commitments | Estimate at completion (EAC) | Variance as at Sept. 1, 2018 |
|
| Commitments | Incurred | |||||
| Whabouchi Mine Site |
$303.6M | $146.3M | $93.0M | $167.3M | $313.6M | $10.0M |
| Shawinigan Electrochemical Plant | $470.8M | $126.1M | $41.9M | $355.3M | $481.4M | $10.6M |
| Contingency | $100.3M | $79.7M | $79.7M | $(20.6M) | ||
| TOTAL WHABOUCHI & SHAWINIGAN | $874.7M | $272.4M | $134.9M | $602.3M | $874.7M | |
As for the purchasing packages for both site, 44% of the budget has been committed for the Whabouchi mine and 23% for the Shawinigan electrochemical plant, putting Nemaska Lithium in line to complete the project construction per the timeline. The mine construction has a 12 to 15 months schedule from the date of this release, with concentrate production expected to commence in the second half of 2019. The electrochemical plant has a 24 month construction schedule from the date of this release, with production estimated to begin in the second half of 2020.
The detailed engineering for the Whabouchi mine site, excluding the electrical engineering, is 76% complete with the electrical engineering estimated to be 37% complete. Detailed engineering at Shawinigan is 20% complete and the electrical engineering has yet to start. Engineering at both sites is tracking to schedule, per the above production timeline targets.
At the Whabouchi mine site, procurement of the main equipment is completed. In addition, at Shawinigan, 10% of the equipment procurement packages have been committed representing 52% of the equipment budget. This equipment includes Flash Calciner, Acid Bake Kiln, Lithium Sulfate preparation equipment, Electrolysis, Sulfuric Acid Re-concentration equipment, Crystallization, Evaporation, Drying and Bagging equipment.
Yves Painchaud, Construction Project Manager of Nemaska Lithium, commented, “We are very satisfied with the pace of construction at Whabouchi, which is progressing rapidly in order to complete the pouring of the concrete for certain buildings and major equipment before winter. We are aiming at closing the buildings for the garage, the ore sorters and crushing in January allowing for equipment installation delivered during winter. The pouring of concrete in the concentrator building is also progressing very well and we are on schedule for the installation of the structural steel within. In Shawinigan, the site preparation is moving forward at the forecasted pace. The flash calciner area, which is located outside the main building, is being prepped and removal of the concrete slab is complete. We are preparing the area to start the piling and foundations work needed for the flash calciner. Work within the two existing buildings is also progressing at the anticipated pace and we are on schedule to have the building ready to receive equipment for the electrochemical plant. We are also making significant progress on the construction of the new administrative office in Shawinigan. The scheduled move-in date is before year-end.”
Mr. Painchaud is a senior mechanical engineer with more than 30 years of project construction experience in Québec. He has held numerous senior leadership positions throughout his career.
IBF4
