Project Overview

Sayona’s flagship, the North American Lithium (NAL) operation was acquired by Sayona Québec in August 2021, in partnership with Piedmont Lithium Inc (Sayona 75%; Piedmont 25%).

Forming the key part of Sayona’s Abitibi hub along with the nearby Authier Lithium Project, the restored NAL operation together with the Company’s emerging northern hub, now comprises North America’s largest lithium (spodumene) resource base.

NAL comprises 19 contiguous claims covering 582.31 and one mining lease, covering approximately 700 ha. It is situated in La Corne township in Québec’s Abitibi-Témiscamingue region. The project lies 60km north of the city of Val d’Or, a major mining service centre, and in proximity to Sayona’s Authier Lithium Project (Authier).

NAL is a brownfield open pit mining operation with a concentrator, with more than C$400 million having been invested in the operation by previous owners, including a carbonate plant. The existing plant has nameplate capacity to produce up to 220kt of spodumene concentrate or 30kt LCE per year.

Sayona plans to combine ore produced from Authier with ore produced at NAL to facilitate a significant improvement in plant performance and economics and transform both operations.

Importantly, nearly all of NAL’s power is from clean and green hydroelectricity, while it is well serviced by provincial highways and an all-weather secondary road.

In June 2022, a formal agreement was announced by Sayona Québec and Piedmont to restart spodumene production at NAL. This will ultimately include the development of a spodumene conversion facility at NAL to produce lithium hydroxide or lithium carbonate, as per the Company’s agreement with the Québec Government to develop a local downstream processing capability in proximity to the North American battery market.

The restart of NAL operations will signal the beginning of revenue generation for Sayona, another step on its journey to becoming a leading North American lithium producer. It will also support the Québec Government’s plans for a clean energy future based on the development of its own battery industry, from mining to downstream processing and EV production.

Sayona announced an estimated Measured, Indicated and Inferred Mineral Resource of 101.9 million tonnes @ 1.06% Li2O, for 1.081 million tonnes of contained Li2O (refer ASX announcement ).

Pre-feasibility study – May 2022

A pre-feasibility study (PFS) released in May 2022 confirmed the technical and financial viability of the operation, including the following key data:

  • Pre-tax net present value (NPV)(8% discount) estimated at approximately A$1 billion
  • Pre-tax internal rate of return (IRR) of 140%
  • Capital payback within two years
  • 27 year life of mine, based on estimated JORC Proved and Probable Ore Reserves of 29.2 million tonnes @ 0.96% Li2O
  • Modest capex for restart of approximately A$100 million, with upgrades planned to improve operational efficiency, grade, quality and recovery

Sayona will implement a ROM (run-of-mine) ore stockpile management system whereby diluted material, lower grade ore and higher-grade feed will be segregated and managed via a stockpile management plan to ensure consistent feed to the plant. This will allow for production campaigns of similar material, providing the concentrate plant sufficient feed stock to maximise product recovery and grade.

Sayona anticipates increased concentrator mill throughput, from 3,800 tonnes per day (tpd) to 4,200 tpd to produce a 6% Li2O spodumene concentrate.

Piedmont partnership

Upon the restart of operations, an offtake agreement with Piedmont will come into effect, whereby Piedmont is entitled to purchase the greater of 113,000 metric tonnes per year of spodumene concentrate or 50% of production from NAL. Prior to the NAL restart, the agreement provides for offtake of 60,000 tonnes or 50% of concentrate produced from ore mined at Sayona’s nearby Authier Lithium Project.

This offtake agreement will remain in place until the commencement of operation of a lithium conversion plant in Québec. At this point, spodumene concentrate produced from NAL will be preferentially delivered to that chemical plant. Any remaining concentrate not required by the conversion plant will be delivered to Piedmont.

The supply agreement is conditional upon Piedmont and Sayona agreeing to a start date for spodumene concentrate deliveries between July 2023 and July 2024, based on the development schedules of both parties.

Restart Underway

Work is currently underway for the recommencement of spodumene (lithium) concentrate production by the first quarter of 2023.

In September 2022, Sayona awarded a four-year, approximately C$200 million contract to Québec company L. Fournier & Fils for mining operations at NAL.

One of the largest such contracts signed in Québec’s mining history, the agreement will deliver significant economic benefits to the region of Abitibi‐Témiscamingue. This includes the creation of 120 new jobs, mostly recruited from the region and from the First Nations communities of Pikogan and Lac Simon.

Under the agreement, Fournier will be responsible for the supervision of all stripping and drilling, blasting, loading and transportation of ore and waste rock, the maintenance of mining roads, and all other services related to operations. Drilling and blasting work will be conducted by another local
Québec company, Dynamitage Castonguay.

Operations were scheduled to commence in October 2022, with work to be carried out continuously, 24 hours a day, 365 days a year.

As at October 2022, nearly all permitting and procurement required for the restart had been completed. During the same month, Sayona selected Québec company, Solurail Logistique Inc, to transport lithium from the NAL operation in La Corne to the Port of Trois‐Rivières for delivery to customers.

The C$43 million contract includes the rental of 110 rolling stock (railway vehicles), with the equipment to be made available for the restart of production at NAL in the first quarter of 2023.

Sayona also announced in October 2022 plans for a pre-feasibility study (PFS) on the production of lithium carbonate at NAL. Sayona is examining the options for lithium carbonate or lithium hydroxide production in Québec, as per its commitment to the Québec Government for downstream processing in the province.

The potential move downstream is a significant potential value-adding boost in enhancing the long-term value and profitability of the NAL operation.

Major engineering firm Hatch will undertake the lithium carbonate PFS, targeting completion by March 2023, in line with the recommencement of spodumene concentrate production at NAL.

Significantly, the NAL complex already includes about 50% of the facilities required to produce lithium carbonate, having been partially constructed by NAL’s previous owners.

Sayona will continue providing monthly updates on NAL’s restart, prior to the recommencement of production in the first quarter of 2023.

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