Surge's Nevada North Study Sets US$9.81 Billion NPV

Surge Battery Metals announced a pre-feasibility study for Nevada North showing an after-tax net present value of US$9.81 billion at an 8% discount rate.

Surge Battery Metals Inc. (TSXV: NILI; OTCQX: NILIF) has announced a positive pre-feasibility study for its Nevada North Lithium Project, putting an after-tax net present value of US$9.81 billion on a proposed mine and processing operation in Elko County, Nevada. The result advances the project's economic case, but it is a forecast of future cash flows—not money available to build the mine.

The study reports an after-tax internal rate of return of 23.6% and an operating cost of US$4,719 per tonne of lithium carbonate. It contemplates an open-pit mine feeding an on-site facility that would produce battery-grade lithium carbonate from high-grade lithium claystone ore. Development would proceed in two phases.

According to the announcement cited by INN Battery Metals, the study improves on the 2025 preliminary economic assessment through lower Phase 1 capital, lower operating costs and higher recovery. It also reports a faster, 4.2-year payback over a 42-year mine life.

The headline value depends on future cash flows

Net present value, or NPV, expresses a project's forecast future cash flows in today's money. Nevada North's headline figure uses an 8% discount rate, which reduces the present value of money expected farther into the future. The after-tax designation means the calculation incorporates modeled taxes.

That makes the US$9.81 billion figure useful for evaluating the proposed operation, but it should not be confused with Surge's stock-market value, a financing commitment or proceeds from a potential sale. The economics are stated in United States dollars on a 100% project basis unless otherwise specified.

The 23.6% internal rate of return, or IRR, is another model output: the discount rate at which projected cash inflows and outflows balance. It is not a promised shareholder return. The result depends on the spending schedule, production performance, revenue assumptions and timing built into the study.

A key question is how those outputs respond when assumptions change. The headline figures supplied do not specify the lithium carbonate selling price used in the model or its sensitivity to weaker prices. Without those details, the announced operating cost cannot establish the project's expected profit margin.

Lower costs strengthen the case, but do not settle it

The reported improvement over the earlier assessment matters because construction spending, operating costs and recovery affect different parts of a mine's economics. Lower initial capital can ease the upfront funding requirement. Lower operating costs can improve cash generation once production begins. Higher recovery means capturing more lithium from the material processed.

Those improvements remain estimates in a development study. The supplied figures do not quantify the reduction in Phase 1 capital or the increase in recovery, so they do not support a numerical comparison with the earlier assessment.

The US$4,719-per-tonne operating-cost estimate also needs to be read alongside the project's broader spending needs. An operating-cost figure alone does not show the full burden of construction, financing, ongoing capital investment or closure obligations. Investors need the model's cost definitions before treating it as an all-in economic threshold.

The reported 4.2-year payback provides another measure of capital recovery under the study's assumptions. It is not a construction timetable or a guaranteed repayment period for lenders. Delays, weaker realized prices or a slower production ramp could alter when the project recovers its investment.

Claystone processing must deliver a saleable product

Nevada North's proposed product is battery-grade lithium carbonate, rather than unprocessed ore. That places the processing facility at the center of the investment case: mining high-grade claystone is only part of the task. The operation must also recover lithium consistently and produce material that meets customer specifications.

The announcement identifies higher recovery as an improvement in the study. The next technical questions concern how that performance is supported and how reliably it can be reproduced at the scale contemplated. Demonstrating extraction, purification and consistent output would help establish whether the modeled costs are achievable.

Potential buyers would also need confidence in product quality and dependable deliveries. A sales agreement, often called an offtake agreement, can provide a route to market, but its value depends on pricing terms, qualification requirements and the obligations assumed by each side. No such agreement is established by the supplied facts.

The two-phase design creates another point to examine. Staging development can spread spending over time, but the economic benefit depends on how the phases connect. Investors should look for the capacity, capital requirements and expansion conditions associated with each phase rather than assuming staging automatically removes financing risk.

Project ownership changes the shareholder calculation

Nevada North is held by Nevada North Lithium LLC, a joint venture owned 67.5% by Surge and 32.5% by Evolution Mining Limited. That ownership structure is essential when interpreting economics presented for the entire project.

The US$9.81 billion NPV should not be attributed entirely to Surge. Nor would a simple ownership allocation establish what ultimately reaches its shareholders. Funding arrangements, debt, joint-venture obligations and any future equity issuance can affect how project value translates into corporate value.

Surge's NILIF shares last traded at 0.50, with the currency unspecified in the supplied market data, as of October 2, 2026, at 20:00 GMT. The recorded daily change was -0.66%. With the market closed, that is a last-traded snapshot—not evidence that the stock is currently moving or proof of how investors assessed the study.

Permitting and funding are the next practical tests

The study was prepared with Fluor Corporation as lead engineer. Independent Mining Consultants handled the mine plan and Mineral Reserve estimate, while RESPEC Company handled the Mineral Resource estimate. Those assignments identify the technical responsibilities behind the proposed operation.

A positive pre-feasibility study does not itself establish permission to construct or operate. The supplied facts do not detail the project's permitting status. Further disclosures should clarify the required approvals, environmental work, water requirements and operating conditions, without assuming those matters are either resolved or blocked.

Financing is equally consequential. Lower Phase 1 capital is favorable, but the absolute funding requirement and proposed funding sources are not specified in the supplied figures. A financing package would need to support construction and the transition into production while accommodating uncertainty in costs and lithium prices.

For investors, the most useful next developments are evidence that the economic model can withstand less favorable assumptions, processing results that support reliable production, and a clear path through approvals and funding. Nevada North now has a stronger stated economic case. Turning that case into an operating mine remains the decisive test.

Key facts

• Project economics: After-tax NPV of US$9.81 billion at an 8% discount rate; after-tax IRR of 23.6%.
• Operating plan: US$4,719 per tonne operating cost; 4.2-year payback; 42-year mine life; two development phases.
• Ownership: Nevada North Lithium LLC is owned 67.5% by Surge and 32.5% by Evolution Mining Limited.
• Last-traded share price: NILIF: 0.50 (currency unknown), -0.66% on the day; last trade October 2, 2026, at 20:00 GMT. Market closed.

Frequently asked questions

What did Surge announce for Nevada North?

Surge Battery Metals announced a positive pre-feasibility study for the Nevada North Lithium Project in Elko County, Nevada. It reports an after-tax net present value of US$9.81 billion at an 8% discount rate, an after-tax internal rate of return of 23.6%, and operating costs of US$4,719 per tonne of lithium carbonate.

Does the US$9.81 billion NPV represent Surge's value?

No. The US$9.81 billion figure is the modeled after-tax net present value of the entire Nevada North project, not Surge's stock-market value or cash balance. Surge owns 67.5% of the project joint venture. Financing terms, debt and other obligations would also affect how project economics translate into value for shareholders.

How does the study compare with the earlier assessment?

Surge says the pre-feasibility study improves on its 2025 preliminary economic assessment through lower Phase 1 capital, lower operating costs and higher recovery. It reports a faster, 4.2-year payback over a 42-year mine life. The supplied figures do not quantify the capital reduction or recovery improvement.

What would Nevada North produce?

The proposed Nevada North operation would produce battery-grade lithium carbonate from high-grade lithium claystone ore. The study contemplates an open-pit mine and an on-site processing facility developed in two phases. Commercial performance would depend on consistent lithium recovery, reliable processing and a finished product that meets customer specifications.

Who owns the project and prepared the study?

Nevada North Lithium LLC holds the project and is owned 67.5% by Surge and 32.5% by Evolution Mining Limited. Fluor Corporation served as lead engineer for the study. Independent Mining Consultants was responsible for the mine plan and Mineral Reserve estimate, while RESPEC Company handled the Mineral Resource estimate.

What should investors watch before development proceeds?

Investors should watch for details on lithium-price assumptions, economic sensitivity, processing performance, required permits and financing. A positive pre-feasibility study does not itself authorize construction or establish funding. The supplied facts do not specify permitting status, the absolute Phase 1 capital requirement or a committed financing package.

Sources

• Surge Announces Positive Pre-Feasibility Study at Nevada North: After-Tax NPV8% of US$9.81 Billion, After-Tax IRR of 23.6% and Operating Cost of US$4,719/tonne Lithium Carbonate — INN Battery Metals

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