Emerging lithium producer Galaxy Resources (ASX: GXY) has further strengthened the rosy outlook of the Mt Cattlin Lithium-Tantalum project near Ravensthorpe in Western Australia, announcing an increased mine life and a new resource estimate for the project.
The previous resource estimate was released in May 2009 and since then, additional drilling, modelling and evaluation has increased the project’s total contained lithium oxide resource by 11% to 172,000 tonnes.
Shares in the Perth-based company last traded for $1.36 on the Australian Securities Exchange.
Galaxy Resources Managing Director Iggy Tan, said the resource increase at Mt Cattlin would extend the mine life of the spodumene project to 16 years.
“This new estimate, with a substantially increased resource, highlights the significant potential of the Mt Cattlin Lithium-Tantalum Project and our emergence as a major participant in the world lithium market,” Mr Tan said.
“It is expected that much of this additional measured and indicated category material will be economically mineable by open pit technique and will translate into increased reserves.
"Pit optimisations and a reserve estimate are currently in progress.
“With the Company’s recent tenement acquisitions and another drilling program scheduled to commence in the current quarter, the potential for further resource upgrades in the future is significant.”
The new estimate gives contained mineral resources for the Mt Cattlin Deposit of 172,000 tonnes of lithium oxide (Li2O) and 5.67 million pounds of tantalum pentoxide (Ta2O5) above a cut off grade of 0.4% lithium oxide, reported below in accordance with the JORC Code and Guidelines.
The new resource estimate has increased the total tonnes for all resource categories by 1.51 million tonnes. Lithium oxide grades have remained the same, while the tantalum pentoxide grade has increased by 5% compared to May 2009.
Significantly, tonnes in the measured and indicated categories have increased by 2.98 million tonnes or 32% compared to 2009.
Further drilling to infill the North West Zone to a more suitable spacing to estimate inferred resources is planned for the first quarter of 2010, and is expected to result in a further significant increase in resources.
Galaxy is gearing up to become one of the world’s leading producers of lithium – the essential component for powering the world’s fast expanding fleet of hybrid and electric cars. By 2010, GXY’s Mt Cattlin mine will be the world’s second largest hard rock producer of lithium and, through the development of its value adding Jiangsu lithium carbonate plant (17,000 tpa), the Company will be the largest and lowest cost lithium producer in China.
Lithium concentrate and lithium carbonate materials are forecast to be in short supply against high future demand due to advances in long life batteries and sophisticated electronics including mobile phones and computers. The company has positioned itself to meet the lithium future by not only mining the lithium but by downstream processing to supply lithium carbonate to the lucrative Asian market.