How Sayona Mining’s NAL Expansion Could Reshape North American Lithium Supply
Sayona Mining’s recent scoping study for its North American Lithium operation reveals a significant expansion, boosting production capacity and reducing costs while delivering robust financial returns.
- Processing capacity increased from 4,200 to 6,500 tonnes per day
- Life of mine recovery improved to 71.2% with spodumene concentrate grade at 5.4% Li2O
- Post-tax NPV(8%) of C$1,284 million and IRR of 26.4%
- Initial capital expenditure estimated at C$366 million with construction completion by end 2029
- Unit operating costs reduced to C$759/t (C1) and C$920/t (AISC) after expansion
Expansion Overview and Production Gains
Sayona Mining Limited has unveiled the results of its scoping study for the expansion of the North American Lithium (NAL) operation in Quebec, Canada. The study outlines a substantial increase in processing capacity, from the current 4,200 tonnes per day to 6,500 tonnes per day, alongside improvements in lithium recovery rates and spodumene concentrate quality. This expansion is projected to produce 315,000 tonnes per annum of spodumene concentrate at a grade of 5.4% lithium oxide (Li2O), reinforcing Sayona’s position as a leading hard-rock lithium producer in North America.
Financial Strength and Cost Efficiency
The financial metrics underpinning the expansion are compelling. The project boasts a post-tax net present value (NPV) at an 8% discount rate of C$1.284 billion, representing a C$479 million uplift over the base case. The internal rate of return (IRR) stands at a robust 26.4%, with a payback period of 46 months. Notably, the expansion is expected to reduce unit operating costs significantly, with the C1 cost dropping to C$759 per tonne and all-in sustaining costs (AISC) to C$920 per tonne, compared to the base case costs of C$935 and C$1,128 respectively.
Operational Enhancements and Infrastructure
Key to the expansion’s success is the addition of a second concentrator line and upgrades to the crushing and ore sorting circuits. These enhancements will increase plant availability to 92%, up from 89%, by enabling staggered maintenance shutdowns and improving operational flexibility. The project also includes new tailings storage facilities and expanded site infrastructure to support the increased throughput. Importantly, the expansion is fully supported by existing Ore Reserves, extending the mine life to 24 years.
Environmental and Regulatory Considerations
Sayona is advancing with environmental permits already in place for current operations, while additional approvals and community consultations are planned to support the expansion. The company emphasizes ongoing engagement with local communities and First Nations, aiming to minimize environmental impact and secure social license. The expansion footprint remains below thresholds that would trigger major provincial or federal impact assessments, although further environmental studies are underway.
Market Position and Future Outlook
With global lithium demand forecasted to outpace supply from 2030 onwards, Sayona’s expanded NAL operation is strategically positioned to capitalize on this market dynamic. The company’s CEO, Lucas Dow, highlighted the project’s role in supporting the clean energy transition by supplying critical battery materials. While funding strategies and detailed feasibility studies are forthcoming, the scoping study lays a solid foundation for Sayona’s growth ambitions in the lithium sector.
Bottom Line?
Sayona’s NAL expansion sets the stage for a stronger market presence, but securing funding and regulatory approvals will be critical next steps.
Questions in the middle?
- What are the timelines and prospects for securing necessary funding to advance the expansion?
- How will ongoing environmental consultations and permitting processes impact the project schedule?
- What further operational optimizations could enhance recovery rates and reduce costs beyond the scoping study?
