IM Lithium News in Brief 9 – 15 March

By Myles McCormick
Published: Tuesday, 15 March 2016

Pilbara and AMG release PFS results; Standard Graphite enters lithium scene.

Pilbara Minerals Ltd has released the results of a pre-feasibility study (PFS) for its Pilangoora lithium-tantalite project in Western Australia (WA).

The company said that the study confirms the technical and financial viability of a standalone 2m tpa mining and onsite processing operation at Pilangoora

The report forecasts production rate of 330,000 tpa of 6% spodumene concentrate for 48,000 tpa lithium carbonate equivalent (LCE).The site has been given a maiden ore reserve of 29.5m tonnes at 1.31% lithium oxide (Li2O).

Operating costs are expected to be $205/tonne spodumene concentrate FOB, with annual EBITDA* of Australian dollar (A$) 120m ($90.47m**) over the first five years of operation.

Netherlands-based AMG Advanced Metallurgical Group NV announced that Outotec Oyj has completed an affirmative PFS for the recovery of spodumene from its Volta Grande mine tailings resource in Brazil. 

The company operates a spodumene pilot plant at Volta Grande, recovering the material from existing tailings. Outotec has been hired by AMG to perform basic engineering for a proposed full spodumene operation, with a targeted output of 90,000 tpa.

AMG said it will also continue separate scoping study work with both Outotec and Hatch Ltd to determine the optimum chemical process route to convert spodumene concentrate into either lithium hydroxide or lithium carbonate.

In Canada, TSX-V-listed Standard Graphite Corp. has signed an option agreement to acquire eight lithium properties within the Abitibi and James Bay regions in Quebec.

The claims cover a total are of 1,150 ha (11.5km2) over what the company described as "highly prospective geology". Unconfirmed historic data has identified grades of 0.8% Li2O.

Subject to TSX-V approval, Standard will make a Canadian dollar (C$) 2,500 ($1,887) cash payment and issue 6m shares to seller for the full acquisition of the claims.

Canadian Securities Exchange (CSE)-listed MGX Minerals Inc. has applied for a further five metallic and industrial minerals permits, covering 96,000 ha (960km2), from the Alberta Ministry of Energy, which will increase its lithium land position in the Canadian province to 141,000 ha (1410km2).

The company said the area is "known to contain some of the highest levels of lithium bearing brine in the Province of Alberta, up to 140mg/l".

In February, MGX announced it had hired Cementation AG to complete a pilot plant scoping study for the production of lithium carbonate.

TSX-V-listed International Lithium Corp. has entered into an option agreement and strategic alliance with ASX-listed Pioneer Resources Ltd, under which Pioneer can earn an interest of up to 80% in the Mavis Lake property in Ontario, Canada.

The companies said that the deal will allow them to test multiple undrilled pegmatite targets within the project area at Mavis Lake.

Finalisation of the agreement is subject to a three-month exclusivity and due diligence period.

Assay results released by TSX-V-listed Ultra Lithium Inc. for its Big Smoky Valley brine project in Nevada, US, indicated maximum a maximum value of lithium in sediments of 100 ppm.

Ultra said the results confirmed the presence of lithium in the south Big Smoky hydrogeological system, with its north eastern areas showing "consistent anomalous values" of lithium, boron and potassium.

The sampling work was carried out in December 2015.

CSE-listed Avarone Metals Inc. is set to acquire the Moab project, adjacent to Ultra Lithium’s claims in Big Smoky Valley.

The company has entered into an agreement with an arm’s length vendor to purchase the site in exchange for 3m common shares, cash payments of C$200,000 over a three-year period and the completion of C$1m in exploration expenditures, also within a three-year period.

In Australia, ASX-listed Dakota Minerals Ltd said it is on schedule to begin a maiden drilling programme at its Lynas Find lithium project in WA’s Pilangoora region in early April, following approval of a programme of works by the Australian government’s Department of Mines and Petroleum and completion of a heritage survey by Yamatji Marlpa Aboriginal Corp.

Gridded rock-chipping work on the central part of the project carried out in January yielded average results of 1.7% Li2O and a maximum of 5.12% Li2O.

The Australian government’s Department of Industry and Science has awarded ASX-listed Lithium Australia an "innovation connections grant" to support the commercialisation of its Sileach process.

Lithium Australia will partner with state body ANSTO Minerals to advance the technology, which aims to recover lithium from silicate minerals without the need for a roasting process.

ASX-listed Liontown Resources Ltd has expanded its holding at the Bynoe project in Australia’s Northern Territory by acquiring a new tenement package.

The company’s expansion includes the large Hang Gong pegmatite, which is up to 60 metres wide at surface and mapped over a strike length of 390 metres.

Liontown originally acquired Bynoe in February this year. It said a recent site inspection identified highly weathered and leached spodumene mineralisation from dump samples, indicating the potential for primary lithium mineralisation beneath existing shallow pits.

ASX-listed Argonaut Resources NL has released the results of historic drilling intercepts at the Crescent Lake project in Ontario.

Intercepts at the Falcon Lake deposit yielded results ranging between 0.99% and 1.48% Li2O at varying depths, while Zigzag yielded 6.1 metres at 1.08% Li2O.

Unlisted Lithium Corp., meanwhile, has signed a definitive agreement with 1032701 BC Ltd a private company in the Canadian province of British Columbia, to develop the Fish Lake Valley lithium prospect in Nevada, US.

The announcement follows a statement by TSX-V-listed Menika Mining Ltd that it has signed an agreement to buy 1032701 and its interest in Fish Lake Valley.

In financing news, TSX-V-listed Nemaska Lithium Inc. announced a private placement for a total of C$13m.

Of this, C$10m will come from Resources Quebec Inc., acting on behalf of the Quebec government, with the remaining C$3m coming from the Cree Community of Nemaska, via the Nemaska Development Corp.

The income from the placement will be used by Nemaska to finance the construction and operation costs of its phase one lithium hydroxide plant in Shawinigan, Quebec.

The total issuance will be around 38m units at a price of C$0.34/unit, where each unit comprises one common share and one half share purchase warrant, with one warrant entitling the holder to purchase a share at a price of C$0.48 within a two-year period.

TSX-listed Avalon Advanced Materials Inc. completed a non-brokered private placement of 13.7m units at a price of C$0.10/unit, bringing in total proceeds of C$1.370m.

Each unit comprises one common share and one half share purchase warrant, where one warrant entitles the holder to purchase a further common share at a price of C$0.15 within a two-year period.

Avalon CEO, Don Bubar, said that coupled with previous financing efforts, this funding should allow the company to complete a preliminary economic assessment (PEA) by the end of June 2016.

ASX-listed Neometals Ltd will make a previously proposed A$0.02/share shareholder payment, totalling A$11.2m, entirely as an unfranked dividend (an Australian dividend arrangement that removes exposure to double taxation).

The company, which forms part of a three-way joint venture (JV) ownership of the Mount Marion spodumene project in WA, due to come online later this year, said that the unfranked dividend method is preferable to a return of capital due to additional costs and delays associated with seeking shareholder approval for the latter.

Lithium Australia said it is continuing to receive conversion notices from holders of its Australian dollar A$0.05 LITCC contributing shares. It said it encourages LITCC and option holders to convert to fully-paid ordinary shares.

*Earnings before interest, tax, depreciation, amortisation

**Conversions made March 2016