BRETT LYNCH
SAYONA MINING MANAGING DIRECTOR
Australian lithium exploration company Sayona Mining is seeking to add to its suite of lithium projects in WA and Quebec. The company’s target customer segment is the lithium-ion battery market, including carmakers. Sayona is currently bidding to acquire the North American Lithium (NAL) mine in Quebec, supported by New York-based investment company Obsidian Global. Mike Cooper spoke with managing director Brett Lynch about its flagship Authier project in Quebec and its ambitions for NAL, WA projects, and the state of play in the lithium market. Q. Sayona said in a recent market update that it was seeing an upturn or recovery in the lithium market: can you elaborate on this please? Why is this recovery happening?
The ASX-listed lithium sector has had a positive start to 2020 thanks to German automaker BMW’s $600m investment in Australian lithium, Tesla’s delivery of Shanghai-made Model 3 cars, China’s decision to maintain electric vehicle subsidies, and investments by automakers and others that have highlighted the strength of lithium demand.
For Sayona, our success in securing US investor support follows our recent securing of an agreement with the First Nation Abitibiwinni concerning our flagship Authier Lithium Project in Quebec, Canada.
It also reflects increasing market confidence in the potential for our turnaround strategy at the North American Lithium ( NAL) mine, which Sayona is currently bidding for backed by a world-class bid support team.
NAL has a nameplate capacity of 180,000tpa for spodumene and produced 114,000t of the mineral in 2018.
The operation will have the potential to produce battery-grade lithium carbonate following further investment.
Analyst forecasts point to a growing lithium supply deficit emerging this decade and with the continued growth in demand for EVs and energy storage we are very confident in the outlook, particularly given our projects’ proximity to North American battery markets.
Q. Sayona is looking to acquire a lithium mine in Quebec. Why is it interested this asset in particular, is it its proximity to its Authier project? Does the new mine acquisition require any new investment or re-equipping?
Sayona has assembled a world-class bid support team for NAL and we are very confident of achieving a successful turnaround.
NAL has an existing concentrator that Sayona aims to feed with spodumene ore from not only NAL but also our Authier project, together with potentially our emerging Viau-Dallaire prospect, putting NAL at the centre of our lithium hub strategy.
Some investment will be required to restart operations, however, this will be minimal considering the C$400m (A$444m) previously invested at NAL.
Sayona will be bringing operational expertise combined with engineering, environmental, financial and technical know-how that will be of enormous benefit to NAL.
Importantly, Sayona has the unique advantage of being able to blend ore supplied from the company’s Authier project with NAL to achieve a significant improvement in plant performance and economics.
Sayona looks forward to continuing our close engagement with key parties and delivering a bid that ensures a successful turnaround.
Q. Sayona has its own lithium project in Authier in Canada, and two exploration projects — one in the Pilbara and another in Canada. How far along are these in terms of development and when are they going into production?
Sayona’s flagship Authier project in Quebec is currently progressing through the approvals process, including a new environmental impact statement and ongoing community consultation.
Approval is expected by late 2020, and thanks to support from the Quebec Government for the province’s lithium industry, which it has described as a “jewel for Quebec”, we are confident of winning approval.
Pending such approval, construction could start as early as 2021 and mining operations in 2022, with the potential to generate new jobs and investment for the local community while also supporting our lithium hub strategy, based around NAL (pending the conclusion of the bid process).
Also in Quebec, the nearby Viau-Dallaire prospect is showing great potential to become a new lithium deposit, being located just 82km south-west of Authier and with mineralisation open in all directions.
In WA, Sayona signed in August 2019 an earn-in agreement with leading lithium producer Altura Mining to develop Sayona’s exploration portfolio in the world-class Pilgangoora lithium district.
Under the agreement, Altura has committed to spending $1.5m on exploration over three years to earn a 51pc stake. This agreement offers the potential for new lithium discoveries while allowing Sayona to maintain our focus on our more advanced Canadian projects.
Q. What type of lithium product is Sayona going to produce and what will be the target market or markets for this? Is it for electric vehicles, or industrial or household batteries or other uses?
The revised definitive feasibility study (DFS) for Sayona’s Authier project, released in November 2019, projected annual average spodumene production of 114,116t, with a life of mine of 13.8 years.
However, a previous study showed the potential for increased value from producing lithium carbonate/hydroxide, both high-value products used in the lithium-ion battery industry.
Given Quebec’s proximity to North American battery markets, it is envisaged that the United States will be the target market for the company’s production, such as Tesla’s gigafactories, helping to power the clean energy revolution in transport and electricity.
Sayona is fully aligned with Quebec’s plans to develop a downstream processing industry that capitalises on the strength of battery demand and offers superior returns to stakeholders.
Q. When does Sayona expect to start production of lithium at its minesites and how will it get its product to market?
As indicated above, it is envisaged mining operations could commence at Authier as early as 2022.
However, Sayona could commence production at an earlier date pending the outcome of its bid for the North American Lithium mine.
Q. What is Sayona’s forecast for lithium prices in the near term, say the next three years? What demand and supply factors are at play?
The revised DFS for Sayona’s Authier project included pricing forecasts from engineers Hatch, which estimated an average spodumene price of US$693/t for the life of mine.
Q. The company has lined up an investment partner in New York-based investment fund Obsidian Global for its Quebec mine acquisition. Does it have other investors lined up or interested in investing in the company?
Certainly. Sayona is delighted with the support of investors including our new US investors and their confidence in our outlook.
The recent upturn in the lithium sector together with our bid for NAL has attracted significant interest and we welcome new investors seeking to support our strategy of becoming one of Canada’s largest lithium miners.