Surge Battery Metals has unveiled the results of a preliminary economic assessment (PEA) for its Nevada North Lithium Project (NNLP), highlighting its potential as a long-life, low-cost producer of battery-grade lithium for the U.S. market. The PEA was completed by M3 Engineering & Technology in partnership with Independent Mining Consultants.

The assessment outlines a two-phase development plan for the lithium project, which is designed to support a 42-year conventional open-pit mining operation. Over the life of the mine, approximately 205 million tonnes of mineralized material are expected to be extracted, with an average lithium grade of 4,016 parts per million.

Initial mining activities will target shallow, high-grade sections of the resource. The project's lithium carbonate equivalent (LCE) resource is currently estimated at 8.65 million tonnes. Phase 1 of the project envisions processing 2.58 million tonnes of ore annually. In Phase 2, which is scheduled to begin in year four, the processing capacity will double to 5.15 million tonnes per year, bringing the average annual throughput to 4.88 million tonnes over the life of the mine.

The NNLP is forecast to produce 86,300 tonnes of battery-grade LCE annually at an average recovery rate of 82.8%. Peak production is projected in year six, reaching 109,100 tonnes.

Capital costs for the project are substantial. Phase 1 construction is expected to require $2.97 billion, which includes $23 million in mine-specific capital expenditures. Phase 2 will add another $2.35 billion. Including $1.51 billion in sustaining capital, the total estimated capital investment stands at $6.86 billion.

The economic model used in the PEA assumes a base LCE price of $24,000 per tonne. Under these conditions, the project carries an after-tax net present value (NPV), discounted at 8%, of $9.21 billion and an internal rate of return (IRR) of 22.8%. The operating cost is estimated at $5,097 per tonne of LCE, attributed largely to the project's shallow, high-grade resource. The payback period is projected at 4.7 years.

Following the PEA announcement, Surge Battery Metals’ stock surged 15.8% to C$0.33 per share in Toronto, lifting the company’s market capitalization to approximately C$59 million ($43 million).

“NNLP could potentially be a major low-cost producer of battery-grade lithium carbonate for the United States battery industry,” said CEO Greg Reimer. “The combination of low opex, strong ROI, and the ability to produce up to 109,100 tonnes of battery-grade lithium annually demonstrates the Tier 1 status of NNLP.”