Rock Tech has reached a significant milestone in the preparation of construction of its lithium hydroxide converter in Guben, Germany: The Front-End Loading stage 3 study, or FEL3 has been published.
Profitability, one of the key results, has been estimated to a post-tax NPV (8%) of 1,194 million Euros, which is an increase of 43 percent compared to the previous Bankable Project Study. In particular, the increased long-term price assumptions of analysts lead to higher margin calculations.
It will be the last basic engineering study and prepares the project to move to construction phase including final procurement negotiations and detailed engineering design. The study includes detailed specifications for construction, commissioning, start-up, and operation, along with a purchase-ready major equipment cost estimates.
The FEL3 results in a much more accurate cost estimate with a variance of only +/-10% (AACE Class 2) and is based on existing definite offers of mainly European suppliers and service providers supporting purchase-ready major equipment cost estimates. Despite this enhanced accuracy, it can be clearly noted that the planning of capital expenditures remains stable and only increases by 4%, mainly due to inflation.
A competitive tendering process has been kicked off, with the assistance of an independent expert, to appoint an Engineering, Procurement and Construction Management (EPCM) partner for project execution. Rock Tech has also selected Deutsche Bank AG as a highly experienced placement agent, with a proven track record in major equity financings, for the Company’s Converter-related financing.