A world-class lithium project
Altura’s Pilgangoora is a world class hard-rock open pit lithium mine which will be just the fourth producing lithium mine in Australia when it commences production in late 2017.
The project, located at Pilgangoora in Western Australia, is approximately 123km drive from the town of Port Hedland. Road access to the site is via the Great Northern Highway and then Shire roads and station tracks. The Pilgangoora Mining Lease Application tenements, covering the resource modelling area, are M45/1230 and M45/1231 and cover an area of 394 hectares.
The Feasibility Study (FS) was completed during Q1 2016 after undergoing rigorous internal and external peer reviews. The Pilgangoora deposit will be extracted by open pit methods enhanced by the shallow and thick mineralisation allowing spodumene ore to be extracted from the commencement of mining. It is planned to develop mining, processing, logistics and support infrastructure to commence mining and processing of 1.4Mtpa of ore to produce approximately 215,000 tonnes of lithium spodumene concentrate per annum, commencing Q3 2017. The life of mine (LOM) is expected to be 14 years.
Concentrate will be exported by ship from Port Hedland to lithium producers, predominantly in China, for further processing into a wide range of lithium chemicals, including lithium carbonate (standard and battery grade), lithium hydroxide, lithium metal, and lithium chloride a world class low cost lithium mine located in the Pilbara region of Western Australia, expected to start producing spodumene concentrate by end of 2017.
Ore Reserve Estimate
In conjunction with the release of the FS results, Altura announced a maiden Ore Reserve estimate of 18.4 Mt @1.07% Li2O (see Table* below). The reserve is classified entirely as a Probable Ore Reserve estimate and was compiled by Orelogy as part of their work for the FS.
Significant potential exists to increase both the mineral resource and ore reserve estimates via additional exploration drilling in previously untested areas of the tenements and upgrading portions of the current inferred resources (see Table* below) in order to convert to probable ore reserves.
*Refer to ASX announcement 11 February 2016 and 11 April 2016
Agreements for Spodumene Concentrate Offtake
In Q2 2016, Altura signed a Binding Offtake Agreement (BOA) with China based group Lionergy Limited.
The key terms of the BOA are:
- Lionergy to take a minimum of 100,000 tonnes of 6% Li2O grade spodumene concentrate annually for an initial 5 year period – any extensions to be negotiated between Altura and Lionergy
- Lionergy and Altura to negotiate any additional offtake tonnage in excess of 100,000 tonnes annually
- Conditions Precedent based on the commencement of mining occurring within two years of the date of the signing of the BOA, and Altura obtaining finance for the development of the Project within six months of the date of the signing of the BOA
- Spodumene concentrate pricing to be based on the prevailing US$ market price and will be negotiated between the parties.
The completion of the first BOA is a key de-risking factor and significant milestone for Altura allowing it to continue to progress the Pilgangoora Lithium Project to production. The BOA also provides a strong endorsement of Pilgangoora and gives substantial clarity for the project funding and near term development strategy.
Lionergy is a China based company specialised in the Lithium industry. Its business scope covers spodumene exploration and mine development, spodumene concentrate sales and distribution, Li2CO3 and LiOH manufacturing and sales, lithium metal manufacturing, and cathode materials manufacturing for Li-ion batteries.
In Q1 2016, Altura entered into a non-binding MOU with China based lithium battery and electronic vehicle producing group, Optimum Nano Battery Co. Limited (Optimum Nano). The MOU is based on a minimum annual offtake of 100,000 tonnes and up to 150,000 tonnes of lithium spodumene concentrate to be produced from Altura’s Pilgangoora lithium project. The MOU paves the way for Altura to enter into an alliance with Optimum Nano as a natural resource supplier into the expanding lithium battery market.
Optimum Nano was established in 2002 in the city of Shenzhen, China and is a leader in the lithium iron phosphate (LiFePO4) battery industry both as a producer of power batteries and electronic vehicles (EV) systems.
Access and Compensation Deed with Pastoral Lease Holders
In Q2 2016 the Company signed an Access and Compensation Deed with the pastoral lease holders who occupy the land over which Altura’s Pilgangoora tenements are located. The execution of the Deed was a key component to progressing Altura’s two (2) Mining Lease Applications in M45/1230 and M45/1231 which cover the current planned mining operations, process plant and site facilities.
Native Title Agreement
During Q3 2016, Altura signed a Native Title Agreement (NTA) with the Njamal people, the traditional owners of the land at Pilgangoora. The NTA covers a range of commercial and non-commercial terms which remain confidential in nature. The signing of the NTA was the final pre-requisite approval to allow the grant of the mining lease applications covering Altura’s planned development of the Pilgangoora Lithium Project.
Purchase of Additional Tenement
In Q2 2016, Altura completed the purchase from Atlas Operations Pty Ltd (a subsidiary of Atlas Iron) of exploration tenement 45/2363, which is adjacent to Altura’s existing Pilgangoora tenements. The purchase of this tenement has provided further exploration ground to expand Altura’s strategically located Pilgangoora tenement package of 11,569 hectares.
Exploration and Drilling Program
The company has recently commenced an undertake additional drilling on its Pilgangoora tenements. The drilling is being conducted to provide feedstock for further metallurgical testing geotechnical data for the planned mining area, and to upgrade the existing Inferred Resources to Indicated Resources within the initial pit shell and for resource extension. Altura has mobilised three (3) drill rigs for this purpose, and the initial results from the drilling program will be released in Q3 2016.
The drilling program also involves drilling for water sources, which has culminated in several production bores being identified and tested.