American Lithium Files Strong PEA for Falchani Lithium Project

• After-tax NPV8 of $5.11 billion at $22,500/t LCE, tripling the previous 2019 PEA estimate
• 43 year mine life producing 2.64 Mt LCE with low costs of $5,092/t
• Initial capex of $681 million with 2.5 year pre-tax payback period
• Potential to add Sulphate of Potash (SOP) and Cesium Sulphate (CsS) by-products in later phases, increasing NPV8 to $5.58 billion
• On track to complete pre-feasibility study and permitting to move towards production

About American Lithium

American Lithium Corp. is a lithium development company focused on large-scale projects in mining-friendly jurisdictions in the Americas. With its flagship Falchani lithium project in Peru rapidly advancing towards production, this robust PEA demonstrates Falchani’s potential to be a major low-cost lithium producer. Investors have an exciting near-term opportunity with a company well-positioned to capitalize on surging lithium demand.

Falchani PEA Results

The recently filed PEA for American Lithium's Falchani lithium project in Peru outlines a large, long-life and low-cost operation. The project has an after-tax NPV8 of $5.11 billion using a conservative $22,500 per tonne lithium carbonate price estimate. The NPV has tripled compared to the 2019 PEA, demonstrating the project’s heightened economics.

The PEA is based only on lithium carbonate production in the first phases. With the potential addition of 81,556 tonnes per year of SOP and 3,796 tpa of cesium sulphate in later phases, the NPV8 could reach $5.58 billion. This demonstrates the upside in bringing these by-products into the mine plan to enhance project economics.

With initial capex estimated at $681 million, Falchani has a rapid pre-tax payback period of only 2.5 years. This minimizes capital risk exposure for investors. Total life-of-mine capex is estimated at $2.56 billion, with sustaining capex making up only $236 million over the 43 year project lifespan.

At only $5,092 per tonne, operating costs are projected to be among the lowest in the industry. This is supported by on-site access to sulphuric acid and ammonia – two of the biggest inputs for lithium production. It also benefits from Peru’s low energy costs.

The operation has a steady-state production target of 45,084 tonnes per year of lithium carbonate during Phase 2. With strong forecast economics and production scale, Falchani aims to be a major player in fulfilling rising lithium demand.

Advancing Towards Production

The Falchani lithium project demonstrates robust economics in a tier one mining jurisdiction, and American Lithium is progressing work to advance it into production.

With a completed PEA and filed EIA report, Falchani is moving through the required steps on the path towards mine development. Gathering environmental approvals and completing a pre-feasibility study are the next key milestones.

American Lithium can leverage technical partnerships and sovereign support to accelerate work in Peru. It benefits from extensive local relationships through experienced leadership and involvement of Peruvian stakeholders. This will aid the completion of studies and permitting to unlock Falchani’s value.

Major lithium producers are looking to shore up new sources of supply amid surging demand from the global energy transition. Strategic partnerships and project acquisition remain on the table as avenues to fast-track production for a company like American Lithium with a large, scalable asset in a stable jurisdiction.

Background on Falchani

The Falchani lithium project is located in the Puno province of Peru, in a well-established mining district near regional infrastructure. The project consists of eight concessions totaling 6,000 hectares, granting American Lithium access to a major hard rock lithium resource adjacent to company’s Macusani uranium project.

American Lithium has aggressively advanced Falchani since acquiring initial concessions in 2016. An initial exploration target of 1.1-1.6 million tonnes LCE was outlined that year on the basis of surface sampling and early drilling. The company has since conducted extensive exploration and resource drilling, releasing an updated resource estimate in 2021.

The latest technical report defined proven and probable reserves of approximately 90 million tonnes grading 2,563 ppm lithium – one of the largest lithium reserves held by a junior developer. The deposit also contains potassium, cesium and other by-products. Flat lying sedimentary layers allow for simple open pit mining methods over a shallow 43 meter average depth.

In 2023, American Lithium completed and filed an Environmental Impact Assessment report with Peruvian regulators. This kicked off the approval process for commercial production, demonstrating progress towards bringing Falchani into a market where major lithium supply shortfalls are forecasted from 2025 onwards.

Operational Overview

The Falchani operation outlined in the PEA starts with a 23,145 tonne per year lithium carbonate plant in Phase 1. This triples to 45,084 tonnes in a Phase 2 expansion before a third expansion takes the project to peak annual output of 72,624 tonnes by Phase 3.

Feed for processing will come from a conventional open pit mine feeding a standard crush and grinding circuit to liberate lithium bearing minerals. Concentration will occur on-site through flotation methods. The resulting spodumene concentrate averages 4.2% Li2O over the life of the project. It will then undergo sulphation and three-stage conventional lithium carbonate precipitation and refining to produce battery-grade product.

In Phase 1 only lithium carbonate is considered, but Phase 2 introduces SOP and cesium sulphate circuits. Adding sulfate of potash capacity provides American Lithium flexibility to bring KCl fertilizer production on-stream later. This aligns with national priorities to develop domestic Peruvian fertilizer capacity. Enhanced economics from the by-products in Phase 2 boosts project value.

The PEA mine plan uses a lithium carbonate price assumption of $14,250 per tonne starting in 2024, rising to $22,500/t in later years. Upside price potential is likely considering 2023 prices over $70,000 per tonne and most analyst forecasts still pointing to supply deficits. The company can leverage higher pricing with one of the industry’s lowest operating cost profiles.

The Region

Southern Peru has seen rapidly increasing mining investment as companies capitalize on mineral riches, availability of land and access to infrastructure. The region is known for hosting numerous producing mines, emerging developers and world class deposits yet to be unlocked.

American Lithium is well established in Peru through years of engagement and social initiatives around its Falchani and Macusani projects. Relationships with communities provide a strong local foundation and social license supporting development work.

Several key factors make its Puno province location favorable, including a skilled workforce, key transport route access, proximity to the regional capital city, and surplus power availability from Peru’s national grid. Supportive national mining policies and initiatives to fast-track projects also boost the investment appeal.

When in production, Falchani is projected to provide substantial tax revenues along with over 2,000 direct and indirect jobs for the local economy. Community interest agreements and social contributions further extend project benefits throughout the region.

Upside Potential

While the current 43-101 technical report provides a blueprint for lithium carbonate production, American Lithium’s extensive concession footprint allows considerable upside expansion beyond the PEA scope.

The existing mine plan occupies only a portion of the current resource, which has been drilled over an approximate 5 km strike length compared to 3 km of focus initially. Significant exploration potential exists to expand the mineralized area along trend and at depth.

In addition, American Lithium has highlighted the potential for a standalone SOP fertilizer operation if potash prices rebound. The company can also produce KCl fertilizer as an alternate product. Cesium offerings may likewise be expanded above the envisaged amount.

These factors speak to the inherent opportunities to enhance Falchani beyond the project’s already robust projected economics. American Lithium maintains a dominant claim position in a proven lithium-potassium-cesium district ripe for sizable resource growth.

Leadership & Positioning

American Lithium is led by a management team and board with decades of exploration and operational experience in South America.

The company is well funded, having closed an oversubscribed $35 million financing round in late 2021. Cash on hand will fuel all activities central to advancing Falchani over at least the next 18-24 month horizon.

American Lithium is strategically positioning itself to answer rising lithium demand at a time when most new projects face long development timelines. Early movers able to deliver new production soonest stand to create significant investor value.

By pursuing multiple major lithium assets concurrently, American Lithium has successfully accelerated work timelines and expanded resource access beyond most peer development companies. It now controls over 18 million tonnes of lithium carbonate equivalent resources in the Americas – including the large, high-grade Falchani deposit able to achieve commercial output faster than the industry average.

Conclusion

American Lithium has clearly outlined the potential for a world-class lithium operation at Falchani. With low operating costs, minimal capital intensity and jurisdictional advantages, the PEA results highlight Falchani’s prospects to be a globally leading lithium mine that strategically positions American Lithium to capitalize on surging lithium demand.

As Falchani rapidly progresses towards production over the coming 12-24 months, investors have an exciting opportunity to position alongside a potential lithium industry leader just as accelerating EV adoption is set to drive a generational bull run in lithium. Near-term catalysts from permitting and project milestones provide avenues for substantial value appreciation. American Lithium represents a prime electric vehicle supply chain investment as the world enters a clean energy transformation relying on expansive battery metals supply.