Surge Battery boosts returns, cuts costs for Nevada lithium project

A new economic study for Surge Battery Metals’ (TSXV: NILI; US-OTC: NILIF) Nevada North lithium project has lifted forecast returns and reduced expenses.

Using an 8% discount rate and a lithium carbonate equivalent (LCE) price of $24,000 per tonne, Nevada North is now projected to generate an after-tax net present value (NPV) of $9.81 billion and a 24% internal rate of return (IRR) for a 4.2-year after-tax payback period, Surge said in a prefeasibility study (PFS).

The project would require $2.77 billion in initial capital for its first stage, followed by another $2.35 billion to expand production.

The economics represent an improvement over the company’s June 2025 preliminary economic assessment (PEA), which gave Nevada North a $9.21-billion NPV, an IRR of 23% and a 4.7-year payback. Stage one construction of the conventional open-pit operation was expected to cost around $2.97 billion, while stage two expenses were unchanged at $2.35 billion.

Compared with the PEA, operating costs have also dropped about 10% from $5,243 per tonne. Recovery has increased from 82.8% to 84.9%, while average annual production has increased by about 7%.

“We have taken Nevada North from a promising claystone deposit to a project supported by a mineral reserve, Class 4 [early-stage] engineering and battery-grade lithium carbonate made from our own ore,” CEO Greg Reimer said in the statement. “The PFS demonstrates that [Nevada North] can become a competitive source of domestic lithium production for America’s growing battery industry.”

Highest grade

Located about 700 km north of Las Vegas, the project is held by Nevada North Lithium, a joint venture between West Vancouver-based Surge and Australian gold producer Evolution Mining (ASX: EVN; US-OTC: EVMNY). Surge owns 68% of the venture, with Evolution controlling the rest.

Drilling at Nevada North has outlined a lithium-bearing claystone zone extending more than 4.7 km along strike and more than 2 km in width. An updated resource released in June contained 657.5 million tonnes grading 3,007 parts per million (ppm) lithium, or about 10.5 million tonnes of LCE.

Nevada North holds the highest-grade lithium clay deposit in the state, SCP Resource Partners mining analyst Eleanor Magdzinski said last month in a note.

Surge’s PFS outlines a 42-year open-pit operation that would mine the claystone without blasting and process it at an on-site plant to produce battery-grade lithium carbonate. Total production is expected to reach 3.87 million tonnes of LCE.

2031 target

Nevada North’s first stage would have capacity of about 55,900 tonnes of lithium carbonate a year, while the second would double processing capacity. Production would average about 92,250 tonnes annually over the mine life, reach about 105,000 tonnes a year during years four through 14 and peak at roughly 111,400 tonnes in year seven.

Proven and probable reserves stand at 218.3 million tonnes grading 3,928 ppm lithium for 4.56 million tonnes of lithium carbonate equivalent. No inferred resources are included in the mine plan.

Nevada North’s economics remain positive even under a lower lithium-price scenario, Surge says. At a $16,800 per tonne price, 30% below the base case, Nevada North would still generate an after-tax NPV of $4.6 billion, the company says.

Surge now plans to advance an engineering and a feasibility study to support a final investment decision. First production is targeted for the second half of 2031.