Neometals Ltd (ASX:NMT) has been rewarded from its recent drill programs with a 29% increase in the resource estimate at the Mt Marion Lithium Project located 40 kilometres from Kalgoorlie, Western Australia.
The Mineral Resource estimate has increased 29.5% to 77.8 million tonnes at 1.37% lithium oxide and 1.09% iron.
Modelling has shown potential open-pit mining to a depth of 400 metres, which is the depth limit to the resource.
The first shipment from Mt Marion is planned for November 2016.
Neometals owns 13.8% of the globally significant Mt Marion lithium deposit currently being developed.
The Mt Marion Lithium Project is owned by:
- 43.1% Mineral Resources Ltd (ASX:MIN);
- 43.1% Ganfeng Lithium; and
- 13.8% Neometals Ltd.
Minerals Resources is the project operator and Australia’s largest contract minerals processor.
Ganfeng is China’s leading, most profitable lithium producer and has secured a life-of-mine, take-or-pay offtake agreement for Mt Marion.
Upcoming project milestones
Neometals is positioned as a near term producer coming online in a strong lithium market with the following project milestones upcoming:
- First shipment (November 2016);
- Maiden Reserve (November 2016); and
- Commission fines circuit (Q1 CY17).
Recent Memorandum of Understanding (MOU)
Earlier this month, Neometals signed an MOU to further progress the development of a downstream lithium chemical plant in Western Australia.
Under the plan the partners would use lithium concentrate from their jointly‐owned Mt Marion project to produce a battery‐quality, lithium hydroxide product.
Neometals and a subsidiary of Mineral Resources have agreed to jointly assess the feasibility of the construction and operation of a lithium plant.
Initial work streams under the MOU have commenced, with a final investment decision expected by Q3 2017.
The resource upgrade represents another completed milestone on the lithium project’s path to production.
The results of the 105 hole infill and extensional drill program increase the projects economics of Mt Marion.
The current market for battery grade lithium hydroxide and lithium carbonate is in tight supply due to high demand growth.
Imports to China of spodumene 6% lithium oxide have risen in price to over A$700 per tonne from near A$400 per tonne in 2014.
The market demand is forecast to grow significantly for the next 5 years through to 2020.
This is fortuitous timing as this is the timeframe in which Neometals and Mineral Resources are aiming to commence production at the project.