Lithium Australia enters Europe and reveals promising exploration results near Mt Cattlin
May has been a busy month for resources exploration and technology group, Lithium Australia (ASX:LIT), both on the corporate and exploration fronts.
On both counts, news has been positive with LIT and Tin International AG (TIN) a subsidiary of Deutsche Rohstof AG (ETR: DRO) negotiating a joint venture, and in Australia, promising exploration results have been released in relation to the company’s Ravensthorpe lithium project, located 500 kilometres south-east of Perth.
LIT also announced earlier in the month that it had produced battery grade lithium carbonate from Pilbara Minerals’ (ASX: PLS) Pilgangoora deposit by employing its proprietary Sileach process.
This proved to be a highly promising development in that it demonstrated the versatility of processing low-grade spodumene concentrates using Sileach’s technology with the end product being high purity 99.8% lithium carbonate. Furthermore, by-product credits add revenue not available through conventional processing.
Tin International joint-venture provides foundation for development of strong European partnerships
The joint venture with Tin International AG will see the parties focus on the Sadisdorf project located in Saxony, Germany where tin mining has been widespread since the Middle Ages.
The agreement involves a one-time cash payment of €50,000 and approximately 1.7 million LIT shares, which will provide LIT with a 15% interest on the basis that it spends €750,000 in exploration at the project by June 30, 2018.
A further 35% interest can be earned by spending an additional €1.25 million in exploration in the period 2 May 2020. After completion of the farm-in period, the partners equally bear the project development costs or are diluted accordingly.
Being located in Sadisdorf, the project is in reasonable proximity to major industrial hubs in Germany where motor vehicle manufacturing is widespread. This could provide a ready market for the known abundant lithium mineralisation which would be ideally suited to process using Sileach technology.
However, how much of the market LIT is able to attract is speculative so investors should seek professional financial advice if considering this stock foe their portfolio.
There is also the opportunity to expand the project with the joint venture partners aiming to extend and upgrade the existing JORC (2012) resource of 3.36 million tonnes inferred resource grading 0.44% Sn (cut-off grade of 0.25% Sn), initially by the addition of lithium data to quantify a polymetallic resource.
The tin orebody is thought to contain in the order of 15% zinnwaldite, a prime target for supply of lithium into the European battery industry.
Looking at the broader picture, LIT’s Managing Director Adrian Griffin said, “Lithium Australia believes that developing strong European partnerships will greatly support longer term efforts to supply the European market, and developing a lithium project the calibre of Sadisdorf not only achieves that goal, but also adds to the global lithium mica inventory being accumulated by Lithium Australia”.
Ravensthorpe mineralisation show similarities to Galaxy’s Mt Cattlin deposit
On the exploration front, the Horseshoe Pegmatite prospect which forms part of LIT’s Ravensthorpe lithium project has revealed lithium mineralisation which includes spodumene, lepidolite and elbaite, all of which can be processed using the company’s Sileach process.
Costean sampling returned 10 metres grading 1.1% lithium dioxide from a zone of lepidolite-spodumene mineralisation. The lepidolite rich portions of the Horseshoe Pegmatite add to LIT’s lithium mica inventory.
The lithium mineralisation is hosted by the Cocanarup pegmatite swarm, which lies within the same geological sequence as Galaxy Resources’ Mt Cattlin lithium mine located 18 kilometres to the north-east.
The Horseshoe Pegmatite was once thought to be three separate pegmatite bodies, but it has since been confirmed that it is a single, flat lying pegmatite with surface exposure of approximately 800 x 800 metres, comparable with the size currently being mined by Galaxy Resources.
Discussing the significance of these results, Griffin said, “Exploration success at Ravensthorpe demonstrates the potential to find more lithium pegmatites, similar in size to those mined nearby Mt Cattlin and given the Ravensthorpe project hosts numerous lithium pegmatites, we look forward to commencing drilling some of these in the near future.”
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