Nemaska Lithium’s (TSE: NMX) stock plummeted Wednesday after disclosing it has been forced to revise the budget for the Whabouchi lithium mine and Shawinigan electrochemical plant upward by C$375 million. The company, with a $300 million market cap on the TSX, clawed back some of the early day’s losses, but still closed the day down 35%.
Nemaska, which has also received funding from the Quebec provincial and Canadian federal governments, is building the Whabouchi hard rock lithium mine in the James Bay region and Shawinigan processing plant north of Montreal, aiming to put Canada on the global lithium production map.
Nemaska has already spent over $138 million on the Whabouchi mine and mill, and another $67.3 million for the plant in Shawinigan. The additional funding is largely related to installation and indirect costs, said the company. Direct purchase package costs – mainly equipment – are in line with the original budget.
“The revised overall project cost reflects a more precise outlook on installation costs and other key variables to the completion of our project,” Nemaska president and CEO Guy Bourassa said in a media statement.
“We now have a better understanding on the remaining scope of the project, estimated budget and current market conditions.”
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