Lithium Universe (ASX: LU7) PFS Values Brownsville Refinery at US$787 Million

Lithium Universe has outlined a US$607 million lithium conversion project in Texas that could generate annual EBITDA of about US$161 million.

The Brownsville pre-feasibility study estimates a pre-tax net present value of US$787 million at an 8% discount rate. It also forecasts a 21% pre-tax internal rate of return and a 3.9-year steady-state payback period.

Post-tax NPV is estimated at US$531 million.

Brownsville Targets 18,270 Tonnes a Year

The proposed refinery is designed to produce up to 18,270 tonnes of battery-grade lithium carbonate annually over 20 years.

Brownsville would process about 140,000 tonnes of spodumene concentrate each year. The study assumes 86% plant availability and 88% lithium recovery.

Full production is expected after a three-year ramp-up.

At steady state, annual revenue is estimated at US$383 million. Operating costs are forecast at US$222 million, including spodumene feedstock.

Conversion costs excluding spodumene are estimated at US$3,566 a tonne. Total operating costs including feedstock are forecast at US$12,148 a tonne.

That supports a modelled gross margin of US$8,822 a tonne, or 42%.

The model assumes long-term prices of US$1,170 a tonne for SC6 spodumene and US$20,970 for lithium carbonate. Lithium carbonate pricing was the largest driver in the project’s sensitivity analysis.

Capital Requirement Reaches US$607 Million

Initial capital expenditure is estimated at US$607 million, including about US$130 million of contingency.

The allowance addresses construction, supply-chain and geopolitical risks. The PFS carries an estimated accuracy range of minus 30% to plus 30%.

Lithium Universe expects funding of about US$620 million to US$650 million will likely be required. No project financing is currently in place.

Options include conventional debt, government-backed funding and strategic equity. The company has indicated it could offer up to 49% of the project to strategic investors.

The figures remain study estimates rather than operating results. Brownsville still requires engineering, permits, site tenure, financing and a final development decision.

Texas Economics Improve on Bécancour

The Brownsville study produced stronger economics than the definitive feasibility study for Lithium Universe’s Bécancour project in Québec.

Brownsville’s pre-tax NPV is about 10% higher. Annual EBITDA rises to US$161 million from US$148 million.

The improvement reflects lower labour, natural gas, soda ash, maintenance and logistics costs. Texas labour costs are estimated at about 24% below Québec levels.

Deep-water access at the Port of Brownsville also provides shorter shipping routes from West Africa.

Lithium Universe has a binding agreement with Norah Mining for up to 80,000 tonnes of Nigerian spodumene annually. Supply remains subject to the producer successfully starting and maintaining operations.

From Study to Development

Brownsville is intended to address limited hard-rock lithium conversion capacity in North America. It would process imported spodumene domestically for electric-vehicle and energy-storage supply chains.

Lithium Universe will now advance a definitive feasibility study, detailed engineering and environmental work.

The company must also secure long-term port tenure and progress permitting. Feedstock, financing and partnership discussions will continue alongside that work.