PMT has released the Preliminary Economic Assessment (PEA) for its Shaakichiuwaanaan Spodumene project in Québec, Canada. The PEA outlined a two-stage development that will produce ~800ktpa of 5.5% Li2O spodumene concentrate. The project has enviable LOM cash operating costs of US$375/t and LOM AISC of US$574/t. The delineation of additional high-grade ore could further reduce operating costs and we expect the addition of CV13 will yield higher production rates for the project. Incorporating the PEA assumptions into our base case translates to 6-8% cuts to our long-term earnings. However, this is offset by lower upfront capex, and we reiterate our ASX and TSX price targets of A$1.10 and C$10.00. Exploration success can further enhance the world class development case for Shaakichiuwaanaan, and we reiterate our BUY rating on PMT.
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