Re: Lithium Australia NL (LIT)
Lithium Australia NL to work with Pilbara Minerals Ltd to develop Sileach™
Tuesday, June 28, 2016 by Proactive Investors
Lithium Australia NL to work with Pilbara Minerals Ltd to develop Sileach™
Lithium Australia NL (ASX:LIT) will progress the development of its 100% owned Sileach™ processing technology through an agreement with Pilbara Minerals Ltd (ASX:PLS).
The Sileach™ extraction process is designed to recover lithium from silicates without the expensive roasting step.
Subject to the success of pilot testing of concentrates sourced from Pilbara’s Pilgangoora lithium project, the parties have agreed to establish the Sileach Joint Venture (SJV).
The SJV will aim to commercialise the Sileach™ process and investigate the viability of jointly developing a lithium conversion facility.
Adrian Griffin, managing director, commented: “The agreement with Pilbara Minerals is a very important step towards Lithium Australia’s goal of becoming a lowest cost quartile lithium carbonate producer.
"Successfully combining Pilbara’s Pilgangoora spodumene concentrates with the low-energy Sileach™ process has the potential to add enormous value to both parties and may allow the SJV to deal directly with the lithium chemical consumers, including the battery manufacturers.
Transaction details
Testing will take place at the ANSTO Minerals facility in New South Wales after which the SJV partners may then elect to proceed with construction of a larger-scale pilot plant, for which Port Hedland is currently the preferred location.
Obligations of the parties as per the agreement are as follows:
Initial pilot tests at ANSTO Minerals
- LIT will cover the capital cost of pilot testing;
- PLS will supply the required spodumene concentrates for testing; and
- Operating costs for the tests will be split 50/50.
Large-scale pilot testing
- Plant designed to produce commercial lithium carbonate and recover by-products;
- LIT to cover capital cost of the plant;
- PLS to provide the spodumene concentrates; and
- Costs to be recovered as follows: Firstly recovering capital costs; Secondly recovering operating costs; and Thirdly, paying PLS cost price for the spodumene concentrate
Definitive Feasibility Study
Data generated from operating the large-scale pilot plant will be used for feasibility investigations into the construction of a full-scale commercial Sileach™ processing plant.
Commercial Sileach™ processing plant
In the event of a positive outcome of the definitive feasibility study, the SJV will advance to commercial production, including finance and construction, on a 50/50 basis.
Analysis
The successful development of a commercial process to recover lithium from spodumene would place Lithium Australia at the leading edge of the lithium industry.
This agreement with Pilbara provides an opportunity for the development of this process.
Hard rock lithium mining costs are high at around $4,000 per lithium carbonate equivalent tonne.
Lithium Australia wants to remove the energy cost from hard rock operations using its technology to take the mining cost to below $2,000 per lithium equivalent tonne.
This joint venture aims to be in the lowest cost quartile for lithium carbonate production.
Lithium Australia's share price is up 190% over the past 12 months currently trading at $0.245 per share.
The company is positioned well within a strong lithium market, developing both, processing technology that is potentially applicable on a global scale, and growing a portfolio of lithium projects.
Lithium Australia now has a variety of lithium related alliances and joint ventures, which means technical resources are pooled and exploration costs are shared.
Lithium Australia NL to work with Pilbara Minerals Ltd to develop Sileach