KEY POINTS
- Green River’s before-tax NPV rises to $1.52 billion.
- Utah incentives include up to $405 million in support.
- Anson plans 10,000 t/y of battery-grade lithium carbonate.
Utah incentives have significantly improved the projected value of Anson Resources’ Green River lithium project, raising its estimated before-tax net present value to $1.52 billion.
The Australian Securities Exchange-listed company said the project’s base-case before-tax net present value has increased from $1.37 billion to $1.52 billion following the approval of financial incentives by the Utah authorities.
On an after-tax basis, the project’s estimated net present value has risen from $896 million to $1.04 billion.
The incentives represent a 10.9% increase in the project’s before-tax value and a 16.7% improvement after tax.
The stronger economics come as Anson moves ahead with a definitive feasibility study and seeks strategic investors and potential project financing partners.
Despite the higher project value, Anson has maintained its estimated construction cost at $569 million.
Tax incentives could help fund construction
Anson said the incentives could also create new options for financing the Green River development without putting additional pressure on existing shareholders.
The company is discussing with the Utah Inland Port Authority the possibility of using part of the approved incentives to support a third-party bond.
Such financing could help fund eligible infrastructure needed for the project, including power, water, gas, roads and rail extensions.
The Utah Inland Port Authority approved a business incentive of up to $193 million for Green River in September. The incentive is based on 50% of the projected increase in property tax revenue generated within the Castle Country project area.
The support could be available for as long as 25 years, subject to the relevant conditions.
Anson said the ability to use the tax incentives to support bond financing could reduce the amount of equity the company needs to raise.
Utah approves additional $212 million tax credit
The Green River project also received a separate incentive from the Utah Governor’s Office of Economic Opportunity.
The office approved a post-performance refundable tax credit of about $212 million under Utah’s Rural Economic Development Tax Increment Financing programme.
The credit represents 50% of an estimated $425 million in additional state tax revenue expected to be generated by the project over 20 years.
Anson has assumed in its updated financial model that the incentives will be earned evenly over the 20-year period, equivalent to about $10.6 million annually.
The company cautioned, however, that the actual value and timing of the yearly credits could vary.
The final amount will depend on factors such as qualifying capital investment, wage commitments, annual performance verification, construction and production schedules, continued operations and the amount of incremental state taxes generated.
Green River targets battery-grade lithium
Anson plans to produce 10,000 tonnes a year of battery-grade lithium carbonate at Green River over an expected 20-year operating life.
The project is designed to benefit from the growing demand for lithium, a key raw material used in batteries for electric vehicles and energy storage systems.
The company said the improved economics strengthen Green River’s investment case without requiring an increase in its assumed lithium price.
Anson is also seeking ways to raise the capital required for development while limiting dilution for existing shareholders.
However, the project remains exposed to lithium price movements and other development risks as the company works toward its definitive feasibility study and financing decisions.
