Resource extension drilling is in progress and mine design studies have also commenced.
The company recently declared a total JORC resource of 6.3 million tonnes at 1.17% lithium oxide representing a 75% increase in resource tonnes and 33% increase in contained lithium.
Furthermore, a marketing consultant has been engaged to assess the market for types of spodumene concentrates that are able to be produced whilst the conversion plant is being developed.
An initial report assessing the potential to generate early cash flow through sales of such concentrate will be received before year end.
Tony Sage, chairman, commented: “I am very pleased with the company’s progress at the Wolfsberg Lithium Project. We are on schedule and results will be received from January 2017.”
European Lithium, previously named Paynes Find Gold Ltd, relisted on the ASX during September 2016 after acquiring the Wolfsberg Lithium Project.
The project is comprised of 22 original and 32 overlapping exploration licences and a mining licence over 11 mining areas has been issued by the Austrian Mining Authority.
Wolfsberg was discovered by Minerex in the 1980s, a period when the lithium demand and price did not support project development.
European Lithium undertook a successful program to verify the Minerex historical data, which has been used to in associate with recent drill results to compile a JORC resource of 6.3 million tonnes at 1.17% lithium oxide.
The project has had 17,000 metres of drilling and 1,400 metres of declines, drives and crosscuts completed and installed by previous owners, and this work will allow the company to examine routes to fast track the development phase.
Development road map
The indicative development timetable for Wolfsberg is as follows:
- Q2 2017: Increase resource;
- Q2 2017: Finalise pre-feasibility study;
- H1 2018: Finalise definitive feasibility study;
- H2 2018: Complete baseline/EIS/permitting;
- H2 2018: Fast track, proposed to commenced production of concentrate for glass-ceramic industry; and
- Q4 2019/2020: Commence operations for production of lithium concentrate for battery factories.
Resource drilling update
Drilling will continue until 22 December 2016 and break for the Christmas period before restarting on 9 January, 2017.
All permits required by authorities in Austria have been received.
Results will be reported as received.
Mine design studies
SRK Consulting has been engaged to undertake the mine design studies for the pre-feasibility study and the seven week phase one program is underway.
Phase one will address geological modelling for mine planning, geotechnical analysis, cut-off grade calculations, stope optimisation, production rate analysis and mine production scheduling and high level capital and operating costs.
Following the results of this study, a 12 week program to undertake mine design and scheduling to pre-feasibility level will be carried out.
Metallurgical studies into sensor based sorting to remove waste dilution from mining and into dense media separation are encouraging.
The marketing studies that are underway will assess the market for spodumene concentrate able to be produced from such methods, which may provide the company with access to early cash flows.
The mine design studies will determine the maximum rate of mine production and provide an estimate for the lithium production potential from Wolfsberg.
With multiple work programs in motion at Wolfsberg, European Lithium remains leveraged to short term news flow at a traditionally quiet time for company news flow.
The company recently received a Buy recommendation and A$0.18 price target from a Sydney-based research firm.
The company last traded at $0.058, highlighting the potential significant upside.