Lake Superior Lithium Project (LSLi) PEA: C$4.10B NPV, 48% IRR
Avalon Advanced Materials Inc.'s Lake Superior Lithium Project (LSLi) in Thunder Bay, Ontario, Canada has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of C$4.10B, an after-tax IRR of 48%, and initial capital of C$1.30B. The mine plan runs 30 years at about 30000 tpa LiOH per year.
Avalon Advanced Materials Inc.'s Lake Superior Lithium Project (LSLi) has reported Preliminary Economic Assessment (PEA) results for the lithium hydroxide project in Thunder Bay, Ontario, Canada. The study headlines an after-tax net present value of C$4.10B. It reflects Avalon Advanced Materials Inc.'s (AVL.TO) latest disclosed economics for the asset.
Economics. The after-tax NPV is C$4.10B. After-tax IRR is 48%. Initial capital expenditure is estimated at C$1.30B. The study models a payback period of 2.5 years.
Production and mine plan. Life of mine is 30 years. Average annual production is approximately 30000 tpa LiOH.
Resources and ownership. The company holds a 100% interest in the project.
These figures are extracted from Avalon Advanced Materials Inc.'s technical disclosures and reflect the most recent PEA on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Our Analysis
At 48% after-tax IRR, the project ranks in the top quartile of the 292 all commodities projects we track, and comfortably clears the ~15% after-tax return developers typically need to finance a build. Its after-tax NPV is well above the company's market capitalisation (roughly 126.5x, on a currency-adjusted basis) — a wide gap that can flag value the market hasn't yet priced — though dilution, financing and permitting risk usually explain part of it. Initial capital runs to about 32% of project NPV, making it capital-light; funding that build is the central execution risk. A modelled payback of 2.5 years is moderate for a project of this type. The project is located in Thunder Bay, Ontario, Canada, a factor in its overall risk profile.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.