Impact: Positive
Grounded Lithium announced results from a PEA for its flagship Kindersley Li brine project in Saskatchewan. Development of Kindersley is planned over several phases, with Phase 1 assuming production of 11kt of battery-grade, lithium hydroxide monohydrate (LHM) per year, yielding an after-tax NPV8% of ~$1.3B and an IRR of 49.5%. In line with other studies, we believe these are very positive metrics, especially considering current inflationary pressures plaguing the industry. While the PEA outlines a 20-year LOM, we expect the current 4.2Mt LCE resource, which has additional room to grow, supports a longer mine life and additional phases of production. With the PEA complete, investors should remain focused on the construction of the field pilot plant (2024), which we believe is the next major de-risking step for the project. We also note, that while share prices in the lithium sector have contracted somewhat, we maintain our positive, long-term, outlook on the market, driven primarily by the growing demand in the battery-storage and electric vehicle industries.
