REG - Alkemy Capital Invs. - TVL Update: Process Validated, CAPEX Confirmed

Alkemy Capital InvestmentsAnnouncement

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RNS Number : 9059K  Alkemy Capital Investments PLC  02 June 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE
MARKET ABUSE REGULATION NO. 596/2014 ("MAR") AS IN FORCE IN THE UNITED
KINGDOM PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.

 

2 June 2025

 

Alkemy Capital Investments Plc

 

Tees Valley Lithium Update: Process Validated, CAPEX Confirmed

 

Alkemy Capital Investments plc ("Alkemy") (LSE: ALK) (JV2:FRA) and its wholly
owned subsidiary, Tees Valley Lithium Limited ("TVL"), which is developing the
UK's flagship lithium hydroxide refinery project, are pleased to report on
substantial progress with the Front-End Engineering Design (FEED) study.

 

Having made significant improvements in the engineering design, reduced
operating costs and substantively advanced key commercial contracts, momentum
is building towards a Final Investment Decision (FID) in Q4 2025.

 

 

 

 

HIGHLIGHTS

 

·    Improved project economics following updated financial model: project
NPV (after tax, 10% discount rate) is now estimated at $764 million, with an
IRR of 41% and a 3-year payback period, reflecting enhanced capacity, reduced
operating costs, and strong long-term market fundamentals.

 

·  Completed test-work at Veolia's facility using lithium carbonate,
successfully producing battery-grade lithium hydroxide: conducted in
partnership with Veolia (TVL's technology partner) test-work has confirmed the
performance of the selected chemical flowsheet, providing a robust technical
basis for finalising mechanical design and equipment selection for Train 1.

 

·    Increased capacity to 25,000 tonnes per annum: a 4% uplift in
nameplate capacity has been achieved through process layout and heat
integration optimisations, enabling higher throughput without any increase in
capacity.

 

·   CAPEX confirmed at $250 million: capital estimate validated by
engineering consultants and benchmarked against updated vendor quotations.

 

·    Product specification meets cathode manufacturer requirements: TVL's
lithium hydroxide specification aligns with the detailed requirements provided
by a leading global cathode manufacturer, with strict impurity thresholds with
discussions progressing toward product qualification and supply chain
onboarding.

 

·    Engagement with Tier 1 European battery cell manufacturer advancing
on commercial terms: discussions have progressed to alignment on pricing
structures and potential volume allocations, reflecting strong interest in
TVL's product and confidence in its project delivery timeline.

 

·    TVL Headquarters relocated to Darlington: New head office established
in a central location at Darlington Business Centre, providing immediate
access to site and wider stakeholder access.

 

 

Engineering and Process Validation

 

The FEED phase has delivered significant technical progress, underpinned by
strong collaboration with Wave International, TVL's lead engineering
consultant. Together, the teams have finalized the lithium
carbonate-to-hydroxide process flow, completed core engineering deliverables -
including mass and energy balances, flow diagrams, and equipment sizing.

 

As part of this phase, Wave International have begun tendering for key process
equipment. This process is enabling TVL to secure current market pricing from
qualified vendors, which is being used to inform the cost model and ensure
alignment between technical scope, supplier capability, and commercial
expectations. The ongoing engagement with the vendor market is a critical step
in de-risking procurement and supporting a cost-efficient path to
construction.

 

 

Process Validation:

The FEED study began with the confirmation of the process route for Train 1,
which will convert lithium carbonate into battery-grade lithium hydroxide
monohydrate. Extensive test work was conducted in partnership with Veolia,
resulting in successful production of battery-grade lithium hydroxide that
meets global customer specifications. This validated the selected chemical
conversion process and informed equipment sizing, flow rates, and utility
demands.

 

Engineering Deliverables:

TVL has completed detailed mass and energy balances, process flow diagrams,
and heat integration modelling. These outputs formed the basis of mechanical
equipment selection and layout design. The engineering team led by Wave
International is now progressing through the mechanical and piping design
phase, defining structural and utility requirements. Work is also underway on
integrating supporting systems such as water treatment, reagent handling, and
product storage.

 

Design Optimisation:

Process modelling and value engineering during FEED enabled an increase in
planned nameplate capacity from 24,000 to 25,000 tonnes per annum without any
increase to capital expenditure. This was achieved through improvements in
heat integration and crystallization efficiency. At the same time, reagent
optimization led to a 25% reduction in forecast reagent costs, contributing to
a lower overall OPEX.

 

Equipment and Vendor Engagement:

The FEED team has made significant progress in engaging with vendors across
all major equipment packages, including crystallisers, dryers, filters, pumps,
tanks, and instrumentation. Technical input from suppliers is being
incorporated into the engineering design to ensure scope clarity, accurate
specifications, and alignment with construction planning.

 

Project Economics:

TVL's updated project financials confirms the strong economic fundamentals of
Train 1, underpinned by validated process performance, cost efficiency, and
market -aligned pricing assumptions.

 

 

 Metric                 Unit    Train 1  Unit    Train 1
 Life of Project        Years   30       Years   30
 LHM sold               kt pa   25       kt pa   25
 Income                 USDm/y  500      GBPm/y  379
 Operating costs total  USDm/y  (352)    GBPm/y  (267)
 EBITDA                 USDm/y  148      GBPm/y  112
 Upfront Capex          USDm    250      GBPm    189
 NPV10 After Tax        USDm    764      GBPm    579
 IRR After Tax          %       41%      %       41

*Income based on long-term lithium hydroxide sale price of $20,000 per tonne

 

 

These outcomes reflect a nameplate capacity of 25,000 tonnes per annum,
capital expenditure of $250 million, and materially improved operating cost
assumptions resulting from reduced reagent and energy consumption. The
financials confirm TVL's position as one of the most competitive lithium
hydroxide conversion facilities in Europe, capable of generating strong
returns while delivering battery-grade product aligned with customer
requirements.

 

Commercial Progress

 

Feedstock Supply:

TVL is in advanced-stage negotiations for long-term lithium supply agreements,
securing a strategic foundation for Train 1 operations. The agreements
building on our existing Heads of Terms with Wogen Resources, will provide a
reliable, high-purity feedstock aligned with TVL's process requirements and
customer specifications. Final contract execution is targeted ahead of FID,
ensuring raw material security to support downstream offtake commitments.

 

Offtake Discussions:

TVL has validated that its battery-grade lithium hydroxide specification
aligns with the stringent impurity thresholds set by a leading global cathode
manufacturer. This technical confirmation positions TVL to advance into the
customer's product qualification and onboarding process, a key step toward
supply chain integration.

 

In parallel, TVL is in commercial discussions with a European battery cell
manufacturer for a long-term offtake arrangement. These discussions cover
contracted volumes, pricing frameworks and product validations. These
interactions reflect growing industry recognition that TVL's product quality,
production timeline, and UK-based refining model are well-aligned with the
evolving needs of the European battery supply chain.

 

Next Steps and Key Milestones

 

TVL will continue to advance all major technical, commercial, and regulatory
workstreams through the remainder of 2025 as it progresses toward Final
Investment Decision. The key upcoming milestones include:

·    Completion of mechanical and piping design: Engineering partners are
advancing design packages that will finalize plant layout, equipment
connections, and utility routing.

·   Capital and operating cost refinement: External cost consultants are
supporting the finalization of a detailed project cost model, incorporating
vendor inputs and design updates to underpin investment and financing
decisions

·    Construction execution planning: TVL is working with shortlisted
construction partners to finalize execution strategies, including project
phasing, resource mobilization, and schedule alignment, ahead of partner
selection.

 

TVL remains firmly on track to reach FID by the end of 2025, with production
scheduled to begin in 2027.

 

TVL CEO Vikki Jeckell commented:

 

"This update marks a critical point in our development, with the project now
defined technically, economically, and commercially. We've maintained capital
discipline, holding CAPEX at $250 million despite increasing capacity, while
materially improving OPEX through process optimisation and feedstock
efficiency. These outcomes demonstrate our commitment to delivering a
high-margin, scalable facility.

 

We are moving at pace toward Final Investment Decision later this year,
supported by strong engineering progress and growing customer engagement. The
alignment of our product specification with leading cathode and battery
manufacturer requirements confirms that our UK-based refining model is both
relevant and necessary for the European supply chain

 

Our focus remains on delivering a technically robust, commercially
competitive, and strategically critical asset for the UK and Europe. I'd like
to thank our stakeholders and partners for their continued support as we enter
this next phase."

 

 

Further information

 

For further information, please visit Alkemy's
website: www.alkemycapital.co.uk (http://www.alkemycapital.co.uk/)  or TVL's
website www.teesvalleylithium.co.uk (http://www.teesvalleylithium.co.uk/) .

-Ends-

 Alkemy Capital Investments Plc  Tel: 0207 317 0636

                                 info@alkemycapital.co.uk (mailto:info@alkemycapital.co.uk)
 Zeus Capital                    Tel: 0203 829 5000

 

ABOUT US

 

Alkemy Capital Investments plc: Alkemy is focused on the development of
critical mineral infrastructure to support the global energy transition.
Through its wholly owned subsidiary, TVL, Alkemy is leading the way in
establishing Europe's first independent lithium hydroxide refinery.

 

Tees Valley Lithium Limited: TVL is committed to supplying battery-grade
lithium chemicals to meet the growing demand of the electric vehicle supply
chain in Europe. Strategically located at in Teesside, UK, TVL is developing a
low-carbon, independent lithium supply chain for European battery
manufacturers.

 

 

Forward Looking Statements

 

This news release contains forward‐looking information. The statements are
based on reasonable assumptions and expectations of management and Alkemy
provides no assurance that actual events will meet management's expectations.
In certain cases, forward‐looking information may be identified by such
terms as "anticipates", "believes", "could", "estimates", "expects", "may",
"shall", "will", or "would". Although Alkemy believes the expectations
expressed in such forward‐looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those projected. In
addition, factors that could cause actual events to differ materially from the
forward-looking information stated herein include changes in market
conditions, changes in metal prices, general economic and political
conditions, environmental risks, and community and non-governmental actions.
Such factors will also affect whether Alkemy will ultimately receive the
benefits anticipated pursuant to relevant agreements. This list is not
exhaustive of the factors that may affect any of the forward‐looking
statements. These and other factors should be considered carefully and readers
should not place undue reliance on forward-looking information.

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