Is Piedmont Lithium the most undervalued lithium powerhouse in North America with a newly filed ESIA and a potential $4 billion valuation gap? We're breaking down the numbers today.
Welcome back to Kitco Mining. I'm Jeremy Szafron. All right, today we're looking at what Piedmont Lithium calls its most significant permitting milestone to date. Now, the company has officially filed its environmental and social impact assessment for the James Bay project in Quebec. I was trying to get that right. Now, this obviously moves that story beyond discovery and deeper into the formal mine authorization process. Now, the timing matters. Piedmont's 2025 feasibility study outlined a base case after-tax NPV of roughly 1.6 billion Canadian dollars on a lithium-only basis. Since then, lithium markets have strengthened materially from last year's lows, and with spodumene prices today trading as high as $2,500 a ton, it raises the question of how much more upside the market is still not fully pricing in.
Add that a strategic stake from Volkswagen, a long-term off-take agreement, and future byproduct potential from tantalum to cesium, the investment case is becoming harder to ignore here. Joining us to discuss the timeline, the economics, and of course the path forward is CEO and president of Piedmont Lithium, Ken Brinsden. Ken, thank you for joining us right now.
Pleasure to be with you, Jeremy. Thanks for the chance to meet. Uh yeah, you know, listen. I mean, today's a big one. You officially filed that ESIA with both federal and provincial governments, and you called this your most significant, you know, permitting milestone to date. For investors kind of watching the clock, I mean, why does this filing meaningfully change the risk profile for James Bay?
Oh, Jeremy, it's just the culmination of so much work by the team and our consultants that contribute to the project. Basically, 4 years worth of work in baseline studies and assessments around the development proposal. And that amount of work just cannot be sneezed at, you know, it's huge. And it's a really important sort of milestone for us to have achieved within the space of approximately 4 years since the discovery of James Bay. And so, yeah, it's the culmination of a huge amount of work and sets us on the pathway now for final mine authorization. And we estimate that that's going to occur over approximately the next 18 to 24 months.
Okay, so it's fast. I mean, you know, this filing is the result of more than 4 years, if you said it, that scientific fieldwork, engagement with the Cree Nation in Eeyou Istchee. Um you know, thankfully, Ken, this time around, we've talked a couple times, I'm finally getting these names correct. But um you know, how does that baseline work kind of help you navigate the federal public review period that starts now?
Yeah, the expectation is that you've done a significant body of work that describes the impacts in the project and the benefits that are derived for the community, Quebec, and Canada as a whole. So, it constitutes thousands of pages worth of work, and the team has done an amazing job in compiling that within what would be considered a relatively quick timeline since discovery. But that only happens because the team has put so much work in across the board, whether it's the technical studies in respect of our project, whether it's the community engagement, and of course the really important engagement with the Cree and the Cree Nation. So, that body of work is just enormous, and it really is a credit to the team that they've been able to compile it in relatively short order to facilitate the next steps that take us through to final mine authorization.
Yeah. Yeah, I mean, this isn't your first mine. I mean, look at Pilbara. But I kind of want to look at the math because that is where the investor attention is going. I mean, again, your 2025 feasibility study printed a base case after-tax NPV of about 1.6 billion Canadian dollars. And that was that lithium-only study using much lower prices. And since then, obviously, lithium prices have rebounded sharply. I think your internal and sensitivity work suggested at current spot prices around $2,500, the valuation could be closer to 5.5, you know, 5 and a half billion dollars here. I mean, is that the right way for investors to think about it? I know we've seen that bear market with the lithium equities.
Yeah, I mean, the long-run pricing that we used in the former lithium-only feasibility study was about $1,300 a ton for a ton of spodumene. And here we are today with spodumene for approximately the last 2 to 3 months having traded in the range of 2,000 to 2 and a half thousand dollars a ton. So, yeah, clearly a really significant change in the market. Demand conditions, just as an aside, are very strong, and there's reason to believe that the current impasse in Iran and where oil prices would be another shot in the arm for demand in lithium markets. And I think that's our experience, you know, the idea that demand conditions are very strong and we can be optimistic about pricing. So when that's reflected in our project, yes, it translates to a material amount of value. And just remembering, quite rightly pointed out there, Jeremy, that's lithium only. But I think most people understand we've now got this amazing opportunity in coproducts in the form of cesium and tantalum on top of the lithium-only opportunity.
Yeah. I mean, you know, you also get that strategic institutional support behind this project, very serious one. And the Volkswagen Group and PowerCo hold a 9.9% stake and a 10-year off-take agreement. Now, we've been tracking a trend on our news program where companies appear to be buying early, you know, to secure strategic supply, very similar to what we've seen in the silver market. You know, in a market where analysts still debate long-term demand, how much does having a global automotive giant in your corner kind of change the conversation with lenders and strategic partners as you move towards a final investment decision?
Well, there's a reason why groups like Volkswagen and PowerCo end up engaged, you know, with Piedmont. And it's based on that sort of fundamental condition around amazing geology and a very, very large-scale and high-grade project. So they have an enormous bain-marie in front of them of projects that they can invest in, and they've chosen Piedmont and our James Bay project. Now, that happens for a reason. And it is that, you know, it is an amazing project and it's going to be one of the very large-scale future operations supporting lithium raw material demand. That's what attracts a great partner like Volkswagen and PowerCo, their battery company. So clearly, you know, I think that's a very strong point of validation, you know, about the future of our project and our ability to keep it moving down the development pipeline and ultimately into production and later to Stakow.
Yeah. You know, that current study, and I know you just talked about this a little bit, Ken, and we should probably go into it. I mean, it was lithium only, but that's obviously not the full picture. You have that world's largest pollucite-hosted cesium deposit and significant tantalum. You know, some analysts are already modeling meaningful byproduct credits. When you update your feasibility work later this year, how could those coproducts kind of change the cost of production and the broader economics of the project?
Yeah, analysts that are looking at the project now are making their own estimates around the value that's attracted in respect of the coproduct opportunity. And today, they're in the range of approximately, you know, 100 to 200 US dollars a ton as a credit to the cost of our underlying spodumene production at just under 600 US dollars a ton on an all-in sustaining cost basis. So those coproducts are really meaningful in the future of our operation. And obviously, we're very, very keen to realize that value. So we're updating the phase lithium-only feasibility study at CV5 resource. And once that's printed later this year, that will include the effect of the tantalum byproduct credit. In addition, we'll have a scoping study or PEA that ensures we can bolt on the benefit in our CV13 deposit. Now, that's where there is ultra-high grade lithium, cesium, and tantalum. And that'll affect the overall economics in the project by its inclusion. So, these are really, really important elements in the future value around our project, and we're very, very keen to demonstrate how that unfolds. So, two parts: updated feasibility study for lithium and tantalum at CV5. And then, the overall project economics inclusive of CV13 and the lithium, cesium, and tantalum opportunity it represents.
