The Piedmont Lithium Inc (ASX: PLL) share price is falling on Wednesday morning.
At the time of writing, the lithium developer's shares are down 2% to 77.5 cents.
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Why is the Piedmont Lithium share price falling?
The Piedmont Lithium share price has come under pressure today following the release of its bankable feasibility study (BFS) for the Carolina Lithium Project in North Carolina, United States.
According to the release, the study confirms that Carolina Lithium could be one of the world's largest and lowest-cost producers of lithium hydroxide in a highly favourable location to supply the rapidly growing electric vehicle supply chain in the United States. It also highlights that the project has a sustainability footprint that is superior to incumbent producers.
The BFS indicates that the after tax net present value of the project is US$2 billion and expected to generate steady-state EBITDA of US$459 million over the first 10 years of operations. The latter is expected to be achieved with steady-state lithium hydroxide cash costs of US$3,657 per tonne and an all-in sustaining cost (AISC) of US$4,377 per tonne for the first 10 years.
Judging by the Piedmont Lithium share price performance, it appears as though investors were hoping for even stronger numbers.
Though, it is worth noting that management sees opportunities for further economic upside at higher lithium prices. For example, based on current spot prices, the project has a net present value of US$4.55 billion.
What's next?
Piedmont Lithium is now looking ahead to making a final investment decision on the project in 2022.
President and Chief Executive Officer, Keith D. Phillips, commented: "We will soon commence detailed engineering for the Project with a view to a final investment decision in 2022. We are actively engaged in project financing discussions, including possible debt finance via the U.S. Department of Energy's Advanced Technology Vehicle Manufacturing loan program, and potential strategic equity investments via the partnering process being coordinated by our financial advisors."
"An important priority for 2022 will be the evaluation of expansion opportunities incorporating the spodumene concentrate assets we control in Quebec and in Ghana. Our ambition is to build America's largest lithium hydroxide business, and the spodumene resource base we've assembled during 2021 should underpin substantial growth," he concluded.
