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Australian city of Brisbane, Oct. 6, 2022 (GLOBE NEWSWIRE) — The International Finance Corporation ("IFC") and Allkem Limited (ASX|TSX: AKE, "Allkem" or the "Company") have reached an agreement on a non-binding term sheet for a project financing facility ("IFC loan") for the fully owned Sal de Vida Project in Catamarca Province, Argentina.

HIGHLIGHTS

  • To help Allkem build Sal de Vida Stage 1, IFC has proposed a US$200 million project finance facility.
  • The environmental and social performance criteria set forth by IFC are acknowledged on a global scale and will supplement the ESG guidelines already accepted at Sal de Vida by Allkem.
  • The facility is anticipated to attain financial close by late CY22, subject to the completion of commercial terms and other significant remaining elements, such as final Board approval by both IFC and Allkem.
"We are already in a strong financial position to self-fund the Sal de Vida project, but we saw an opportunity to further improve the financing structure for Sal de Vida and partner with IFC, an institution with decades of experience providing finance and sustainable business solutions in the mining space," said Managing Director and CEO Martin Perez de Solay.

Sal de Vida is anticipated to have a large positive economic impact that will enhance the budgetary outlook, economic performance, and social results at the municipal, state, and federal levels.

DEVELOPMENT FINANCE

The investment that IFC is recommending consists of a $200 million debt package, with up to $100 million coming from IFC for a maximum tenor of nine years and the remaining sum being funded by a syndicate of commercial banks.
Current market circumstances for this facility type, loan amount, tenure, and region are reflected in the IFC loan and its major terms.

Sal de Vida will have access to a diverse international lender group through the IFC's suggested financing structure, which will also help to lower the project's capital structure's risk.

Internationally recognized as a standard for social and environmental risk management in the private sector, IFC's Performance Standards. Risk management, labor, resource efficiency, community, land resettlement, biodiversity, indigenous people, and cultural heritage are among IFC's eight Performance Standards.

IFC carried out a thorough and in-depth environmental evaluation, which included a review of water use, brine extraction, and related monitoring and mitigating measures. Participating technical teams from allkem will collaborate to put the IFC's Environmental and Social Action Plan into practice (ESAP).

The project scope, cost, and schedule were evaluated by senior consulting companies under IFC technical evaluation, and a thorough risk analysis was performed to ensure that appropriate mitigation procedures were created.

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The facility is anticipated to close before the end of 2022, subject to the completion of the facility terms, legal due diligence, approval from the Allkem Board of Directors, approval from IFC Management, and permission from the World Bank Group Board of Directors.

IFC PROFILE

The largest international development organization with an emphasis on the private sector in developing markets is IFC, a part of the World Bank Group. IFC works in more than 100 nations and leverages its resources, knowledge, and clout to open up markets and possibilities for underdeveloped nations. IFC committed a record $32.8 billion to private businesses and financial institutions in developing nations during the fiscal year 2022, utilizing the private sector's ability to promote shared prosperity and reduce severe poverty as economies deal with the effects of current global crises. To learn more, go to www.ifc.org.

SUGAR OF LIFE PROJECT


The Sal de Vida Stage 1 Project is intended to produce 15 ktpa of lithium carbonate, mostly for batteries. According to the 2022 Feasibility Study, capital expenses will be $271 million and cash operating costs will be $3,612 per tonne. The building process started in January 2022.

The economics of the Stage 1 project include a payback period of 1.75 years from the start of commercial production, a pre-tax internal rate of return of 50%, and a pre-tax Net Present Value of US$1.23 billion at a 10% discount rate.