Tim McGowen: And, Dougal, we’ve got some questions on funding. But, first up, the lithium carbonate refinery near NAL is kind of partially constructed, with a PFS for the lithium refinery due out shortly. Can you paint a picture of what becoming Canada’s first vertically integrated lithium developer might look like, and how will that project be funded?
Dougal Elder: That’s a great point, Tim. And I think, you know, that’s the really key message with the NAL carbonate plant. It’s a partially constructed carbonate plant that we purchased two years ago from the Quebec government as part of the NAL acquisition, and if we can get that into operation by the end of 2026, NAL would be the first and only integrated lithium chemical producer in North America for supply into North America. So, I think that’s a very significant opportunity, not only for Sayona together with our partners at Piedmont Lithium (ASX:PLL), but also for the province of Quebec, you know, to be the primary and a significant supplier of lithium chemicals sourced from North America into North America. So, I think that’s a very substantial opportunity that awaits, and we’re looking to progress that rapidly. As you mentioned, there’s a PFS underway for the carbonate facility. That’s due back at the end of April. That work has been undertaken by Hatch, and they’ve been studying the carbonate plant for a number of years, so they’ve got a very good understanding of that facility. We’re expecting a capital cost of around US$300m to complete that plant. And just to put that into context, the single biggest piece of equipment that is required is the crystalliser, which is around $75m. So, you know, the PFS will obviously give us detail around the economics, timelines and capital costs, but we’re very excited with the opportunity and we could expect some, you know, very promising and favourable NPVs relating to the economics of capturing higher value-added margins from downstream refining onsite at NAL.
Tim McGowen: And, of course, Dougal, you released a combined DFS for Authier and NAL. What was the importance of kind of releasing this in a combination?
Dougal Elder: I think it speaks to the value of the hub-and-spoke strategy that Sayona implemented when we purchased North American Lithium two years ago together with our partners, Piedmont Lithium. You know, I think having Authier there as a satellite deposit to support the ore body at NAL and the additional steps that we’ve taken to have the earning right to earn into a 51 per cent interest in the Vallée joint venture, which is the neighbor to NAL, is really about growing the resource space around the NAL concentrator to provide more tonnes at a better grade for a longer life of mine, which, ultimately, potentially, will end up being translated into more downstream lithium chemicals from the NAL concentrator and carbonate plants.
So, I think the other unique opportunity that NAL offers is that, if the joint venture proceeds with completing the construction of the carbonate plant, it represents an opportunity to take ore from 1 per cent in the ground to a 99 per cent lithium chemical, all within two kilometres of the original ore source at the lowest carbon footprint in North America. So, not only is it favourable on a economic perspective, but also from a carbon footprint perspective. NAL’s integrated downstream operation provides a really fantastic opportunity for Quebec and North America.
Tim McGowen: And, Dougal, you’ve been busy, let’s talk about today’s announcement. You’ve released a massive increase in your resource at Moblan, where you’re in partnership, of course, with the Canadian government and where you plan to create a vertically integrated lithium hydroxide hub. What are the strategic advantages of that? And, once again, how might that be funded?
Dougal Elder: Yeah, I think that’s a really good point, Tim, about, you know, the partnership that we have at both our hubs. So, we have a partnership model with Piedmont Lithium at NAL, the Abitibi Hub. That’s a 75 per cent Sayona, 25 per cent Piedmont partnership. And the partnership we have in the north with Moblan is with the Quebec government. Sayona has 60 per cent of that project and the government has 40 per cent. And I think, talking to Moblan specifically, we think it’s very strategically important to have the government as a partner in that project because Moblan represents an opportunity that is significantly larger than NAL. It could be multiples larger than NAL in terms of potential production capacity. So, having the government there as a partner with a vested economic interest in the asset aligns us with the government in terms of rapidly moving through the permitting process, but also with the potential funding equation.
And I think, when we talk to funding around Moblan, we are looking at a puzzle where you’re potentially looking at contributions from the JV partners, being Sayona and the government, you’re potentially looking at debt finance, potentially contribution from governments, and also, you know, there may be offtakers or OEM or car-makers in the mix as well, and there’s various mechanisms around that. So, that’s a piece of work that we are working through at the moment, and we may have news on that later in the year. But certainly I think the opportunity with Moblan is significant. We’ve already demonstrated with the news today that Moblan is one of the largest single deposits in North America. It’s very high grade, it’s low strip, a very favourable ore body, and we’re certainly very excited about the opportunity to further grow that resource base and increase the grade as we move through this year.
Tim McGowen: And in regards to that resource base, you’re drilling a further 60,000m, I understand, in 2023. Is this activity mainly infill drilling to better define the deposit or are you still looking to increase the resource further?
Dougal Elder: Yeah, it’s both. So, the infill drilling will be focused on moving part of the resource base that’s in the inferred category back into indicated, similar to the drilling that we’re doing at NAL this year. But I think the upside opportunity is about connecting the pegmatites, the main and inter pegmatites, to the Moleon in the east. There’s a patch of ground there where we’re looking to define, you know, the extent of the mineralisation down depth, but also to connect the ore bodies that we’ve already established. So, I think we’re looking to further grow that resource base within the Moblan property this year and, as you mentioned, a 60,000m drill program that is already underway, and that’ll be progressing through this year.
I think the other point to note is that we still have a significant portion of ground potentially, particularly to the east of Moblan, which is the Troilus claims that we acquired last year. The Moleon pegmatites that we have established with the resource upgrade today sit right on the eastern boundary with Troilus. So, there’s the potential that that mineralisation continues east into those claims, which are completely unexplored for lithium. So, the regional opportunity in the Northern Hub we think is significant, but our focus this year is really around, you know, converting those resources on the Moblan property, looking for potential exploration upside to grow that resource base on Moblan, and then we’ll be moving outward to, you know, further explore the regional opportunity, starting with the Troilus claims moving forward.