Lithium Australia (ASX:LIT) continues its global expansion in lithium "hot spots", signing a binding joint venture agreement with Toronto listed Alix Resources (TSX:AIX) to explore in the world’s largest lithium clay province in Sonora, Mexico.
The addition of a Mexican JV to the mix in recent weeks now extends the company’s reach to a third continent.
This follows Lithium Australia establishing a presence in the greisen deposits of Europe through its relationship with European Metals Holdings (ASX:EMH) and is already working with Pilbara Minerals (ASX:PLS) in the Pligangoora “lithium hotspot” in Western Australia.
Lithium carbonate prices have more than doubled in the past few months, from $US7700 a tonne to more than $US16,000 a tonne.
The excitement has lifted many small cap listed lithium companies but it is not unwarranted as future demand from electric vehicle manufacturers and home power storage suppliers is set to catapult demand for lithium, one of the key inputs in battery units.
Lithium Australia's share price has lit up and has more than doubled since September 2015. The strategic alliances the company has serves to de-risk and add to exploration and development expertise.
However, there is more to ASX listed Lithium Australia than its lithium "footprint" that should propel this higher in 2016/17. More on this later.
Electra project in Mexico
The Electra Project consists of two large exploration concession applications covering 22,625 hectares, with one adjoining C$160 million capped Bacanora Minerals' (CVE:BCN) Sonora Lithium Project to the north and one to the southern end.
These look to be extensions of the giant Sonora lithium clay deposit and exploration will seek to unlock these answers.
Many investors are accustomed to saline lakes and spodumene or hard rock as lithium host mineralisations. Lithium can also be widespread in clay minerals. There was a producing Lithium mine in the U.S. based on clay.
The Electra JV with Alix Resources brings together a Canadian and Australian partnership on the doorstep of highly prospective areas for lithium.
Lithium Australia can earn up to 65% as the project advances.
Field crews will return to the properties shortly to commence an exploration program designed and approved by the management of both JV partners.
The location of the Electra project in Northern Sonora allows for year round access and field activities.
There are challenges to developing lower grade lithium clay deposits to be sure; this is where technology has improved the probability of commercialising these deposits.
Also, the relatively near surface nature of the deposit is a plus. The JV aims to develop superior means of recovering lithium from these, and similar lithium clay deposits.
However, low energy process flowsheets and potential to beneficiate the ore may assist the process.
Lithium Australia has been successful in demonstrating such achievements on the giant Cinovec deposit in its partnership with project owner European Metals Holdings.
The dominance of clay and mica deposits amongst the largest global lithium deposits could be a pointer to the future of the lithium industry.
Lithium silicate processing technology
Lithium Australia has exclusive access to technology for the production of lithium chemicals from silicates including the clays, micas and spodumene without the requirement to roast prior to leaching.
Lithium Australia plans to utilize its exclusive technologies to produce commercial quantities of battery grade lithium carbonate from lithium micas as it is a readily available waste product.
If it can, this opens a door for commercialisation. An even bigger door awaits the success of producing lithium chemicals from spodumene without roasting.
Lithium Australia will employ these low energy hydrometallurgical process on both the Western Australian and Czech Republic lithium mica samples, generating further by-product credits, including potassium sulphate.
Commercialization of these technologies may do to the lithium industry what froth flotation did to the base metal sulphide industry.
About 100 years ago three out of every four tonnes of “ore” that came from Broken Hill could not be treated.
It was feared the mounting dumps would entomb the operation.
Froth flotation, probably the most successful metallurgical innovation, managed to separate the zinc from the lead, and turn the waste dumps into orebodies.
So it is with the technology developed by Lithium Australia.
The low-grade materials, including contaminated spodumene, and lithium micas, have long been relegated to the waste dump, but like flotation before it, Lithium Australia’s proprietary technology may save some hard-rock lithium operations.
This technology is about low operating cost that can handle the materials conventionally considered to be waste.
Advantages of the technology
There are a number of advantages from the lithium carbonate production that occurs in one facility, from ore to product to reprocessing of lithium mica, or low-grade spodumene, contained in waste dumps and tailings - leading to cheaper mining costs.
Additionally, the process is energy efficient as there is a simple processing route using conventional techniques but in a different way. There are also potential by-product revenues that improve project economics.
In 2015, Lithium Australia announced that it had produced its first battery-grade lithium carbonate from the Cinovec project with some startling results.
These included carbonate purity exceeding 99.5%.
LIT wholly-owns the Ravensthorpe project, west of Esperance in southern Western Australia.
Maiden results have confirmed the presence of at least seven lithium pegmatites within the Ravensthorpe project area and immediate surrounds, west of Esperance.
The early indications are that the grade and scale of lithium mineralisation is of economic significance and warrants follow-up investigation.
Assays from 19 samples of lithium mineralisation from the lithium core-zones of all pegmatites range from: 1.26% Li2O to 4.23% Li2O, with a mean of 2.96% Li2O.
Large core zones containing the lithium minerals lepidolite and zinnwaldite have been mapped at the Quarry Pegmatite and Horseshoe Pegmatites and have a combined strike length exceeding 750 metres.
Adrian Griffin, managing director for LIT, commented: “It is surprising that such prospective pegmatites have had such little recent evaluation.
"The area has the potential to add significant quantities of lithium mica to our inventory and become an integral part of our plan to establish a processing facility for lithium micas in Western Australia using ground-breaking, low-energy processing technologies to recover lithium as carbonate or hydroxide for the battery industry.”
Lepidolite Hill mica deposit
LIT’s Lepidolite Hill Project is located 55 kilometres southwest of Kalgoorlie in Western Australia.
Control assays have confirmed production of 99.9% lithium hydroxide from micas at Lepidolite Hill deposit near Kalgoorlie using hydrometallurgical techniques.
The process is accomplished by conversion of lithium carbonate.
The tests were conducted on lithium carbonate samples produced during a mini plant production run by Lithium Australia, in plant operated by Lepidico Limited, last July using lepidolite from Lepidolite Hill.
The ability to digest the target mineral, be it mica or spodumene, and produce a final hydroxide product, remains a common thread, with hydroxide production potentially being one of the most significant value adding steps in the process.
The production of high purity lithium carbonate is the second breakthrough for Lithium Australia on testwork on Lepidolite Hill samples.
Last year, the company produced a 99.58% purity lithium carbonate from test work on Lepidolite Hill’s micas.
Lithium Australia NL expands Pilbara footprint
Further extending LIT's footprint, the company recently signed a Memorandum of Understanding with Venus Metals Corporation (ASX:VMC) to initially test the commercial lithium potential of Venus’ holdings in the Pilbara region.
The area of focus will be Venus’ Pilgangoora project, southeast of Port Hedland.
The broader objective of the partnership will be to determine if the potential exists for sufficient feedstock to feed a Pilbara lithium processing facility to produce high grade lithium carbonate and/or hydroxide for use in advanced hi-tech applications including lithium ion batteries.
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