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(Kitco News) – Lithium producer Allkem (TSX: AKE) announced today that the Company and International Finance Corporation (“IFC”) have signed a non-binding project finance facility term sheet (“IFC Loan”) for the Sal de Vida lithium project in Argentina.
According to the company statement, IFC’s proposed investment includes a US$200 million debt package, including up to US$100 million from IFC with a term of up to 9 years and the remainder being funded by a consortium of commercial banks.
“The IFC loan and its key terms reflect current market conditions for this facility type, loan size, tenor and region. The financing structure proposed by IFC will provide Sal de Vida with a diversified international lender group in an asset-level syndicated loan agreement and will help de-risk the project’s capital structure,” Allkem said in a statement.
Importantly, the company added that the facility is expected to close before the end of 2022, subject to the finalization of the terms of the facility, legal due diligence, Allkem board approval, IFC management approval and the World Bank Group board of directors.
The Sal de Vida Stage 1 project is designed to produce 15 ktpa of predominantly battery grade lithium carbonate. The 2022 Feasibility Study estimated capital expenditures at $271 million and cash operating costs at $3,612 per tonne.
Construction started in January 2022.
The stage 1 project economics include a pre-tax net present value of $1.23 billion at a 10% discount rate, a pre-tax internal rate of return of 50% and a payback period of 1.75 years from the start of commercial production.
Allkem is a lithium chemicals specialist company with a global portfolio of diverse projects. The Company’s portfolio includes lithium brine and borax operations in Argentina, a hard rock lithium operation in Australia and a lithium hydroxide conversion plant in Japan
IFC – a member of the World Bank Group – is the largest global development institution focused on the private sector in emerging markets. In FY2022, the IFC provided a record $32.8 billion to private companies and financial institutions in developing countries.
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