Surge Battery Metals has released a positive prefeasibility study for its Nevada North lithium project in Nevada, demonstrating significant improvements in project economics compared to previous assessments. Using an 8% discount rate and a lithium carbonate equivalent price of $24,000 per tonne, the project is now projected to generate an after-tax net present value of $9.81 billion and a 24% internal rate of return with a 4.2-year after-tax payback period, according to the company statement published on October 5, 2026. The updated study represents a substantial improvement over the company's June 2025 preliminary economic assessment, which had valued Nevada North at $9.21 billion NPV with a 23% IRR and a 4.7-year payback.
The prefeasibility study also shows meaningful operational improvements, with operating costs declining approximately 10% from $5,243 per tonne. Lithium recovery rates have increased from 82.8% to 84.9%, while average annual production has grown by approximately 7%. The project would require $2.77 billion in initial capital for its first stage of development, followed by an additional $2.35 billion for production expansion.
This represents a reduction in stage one capital requirements compared to the June 2025 PEA, which had estimated first-stage costs at approximately $2.97 billion. Stage two expansion costs remain unchanged at $2.35 billion. Nevada North is a joint venture between West Vancouver-based Surge Battery Metals, which owns 68% of the venture, and Australian gold producer Evolution Mining, which holds the remaining 32%.
The project is located approximately 700 kilometers north of Las Vegas and comprises a lithium-bearing claystone zone extending more than 4.7 kilometers along strike and more than 2 kilometers in width. The updated resource estimate released in June outlined 657.5 million tonnes grading 3,007 parts per million lithium, equivalent to approximately 10.5 million tonnes of LCE. Proven and probable reserves stand at 218.3 million tonnes grading 3,928 ppm lithium, representing 4.56 million tonnes of lithium carbonate equivalent.
According to mining analyst Eleanor Magdzinski of SCP Resource Partners, Nevada North holds the highest-grade lithium clay deposit in Nevada. The prefeasibility study outlines a 42-year open-pit operation that would mine the claystone deposit without blasting and process the material at an on-site facility to produce battery-grade lithium carbonate. Total projected production over the mine life is expected to reach 3.87 million tonnes of LCE.
First-stage operations would produce approximately 55,900 tonnes of lithium carbonate annually, with the second stage doubling processing capacity. Over the mine life, production would average approximately 92,250 tonnes annually, reaching about 105,000 tonnes per year during years four through 14 and peaking at approximately 111,400 tonnes in year seven. The project demonstrates resilience to lower commodity prices.
Surge reports that at a $16,800 per tonne lithium carbonate equivalent price, representing 30% below the base case scenario, Nevada North would still generate an after-tax NPV of $4.6 billion. CEO Greg Reimer stated that the PFS demonstrates Nevada North can become a competitive source of domestic lithium production for America's growing battery industry. Surge Battery Metals now plans to advance an engineering and feasibility study to support a final investment decision.
First production from Nevada North is targeted for the second half of 2031.
Source: mining.com