Lithium Universe (ASX: LU7) is pleased to announce the results of its Definitive Feasibility Study (DFS) for the Bécancour Lithium Carbonate Refinery in Québec, Canada. The Company previously released a Preliminary Feasibility Study in October 2024. The follow-up DFS confirms the viability of a strong lithium conversion project, even within a below-average pricing environment. The Company plans to build a reliable, low-risk lithium conversion refinery with an annual capacity of up to 18,270 tonnes, utilising proven expertise from the Jiangsu processing model. The facility will produce environmentally friendly, battery-grade lithium carbonate. The Company aims to establish a Canadian-based lithium chemicals business, purchasing spodumene feedstock from both domestic suppliers and international markets, including Brazil and Africa and producing a battery-grade lithium carbonate product. This aligns with the Company’s broader vision of contributing to the North Atlantic lithium supply chain and closing the Lithium Conversion Gap.


The project’s economics continue to be highly favourable, even with conservative price assumptions. The refinery is economically viable with a pre-tax Net Present Value (NPV) of approximately US$718 million, using an 8% discount rate, and a pre-tax Internal Rate of Return (IRR) of around 21.0%. The full rate payback period is estimated at 3.9 years. The financial model is built on cautious price forecasts of US$1,170 per tonne for spodumene concentrate (SC6) and US$20,970 per tonne for battery-grade lithium carbonate equivalent (LCE). LU7’s directors believe they have a reasonable basis for using the assumed price in the study of US$20,970 per tonne for battery-grade lithium carbonate. Key operational assumptions include 86% plant availability and 88% lithium recovery. At full production capacity, the project is expected to generate approximately US$383 million in annual revenue, with costs totalling around US$236 million, leading to an annual EBITDA of approximately US$148 million and a gross margin of in the region of 39%. Post-tax, the NPV at an 8% discount rate is estimated at approximately US$449 million. The capital cost for the project is estimated at US$549 million, which includes a contingency of US$51 million.


The capital cost has risen by 11% compared to the PFS, primarily driven by the inclusion of a Zero Liquid Discharge (ZLD) system (US$30 million) to enable the recycling and reuse of all process water on-site. Additional factors, such as escalation and updated pricing quotes, also contributed to this modest increase. The capital costs estimate is based on advanced design specifications from the Jiangsu Lithium Refinery model, ensuring robust financial planning and projection. These factors highlight the project’s strong financial viability, even under conservative pricing conditions.