Weekly Lithium Lowdown with Chris Williams – Week 44, 2023
Mineral Resources acquires minority stake in Wildcat Resources
Mineral Resources has acquired a 19.85% stake in Wildcat Resources which is developing its Tabba Tabba lithium project near Port Hedland, Western Australia.
The majority of the 206.6M shares, about ~187M shares, were acquired off-market for A$158.7M at A$0.85 per share. The implied valuation of project per the transaction is A$885M (US$570M).
Wildcat is currently drilling with two RC and one DD rig. Recent assays include 85m at 1.5% Li2O from 133m (est. true width).
Adamas take: Wildcat’s rags to riches story is eerily similar to neighboring Azure Minerals Andover project where known pegmatite outcrops were tested for lithium at depth. The move from MinRes once again highlights the eagerness of mining insiders to acquire Western Australian spodumene assets. In the case of MinRes the asset is local to its Wodgina operation.
Compass Minerals suspends Ogden project, seeks clarity on regulations
Compass Minerals has indefinitely suspended its Ogden lithium project on the Great Salt Lake of Utah, citing a “significant amount of uncertainty regarding the regulatory environment”. The move follows March 2023 state legislature amendments affording the Utah royalties on lithium extraction.
Compass have operated a brine evaporation salt extraction facility for over 50 years, primarily for sulfate of potash. The company published a PEA in 2022 proposing the addition of direct lithium extraction to this facility.
The project had momentum coming into 2023 as it welcomed Koch as a strategic investor, and earlier this year Ford signed an offtake agreement.
Adamas take: Likely politically motivated, the suspension highlights once again the ever-present and seemingly fluid regulatory hurdles USA resource projects face. The project’s 11 ktpa LCE Phase One output could be easily pushed out 12-24 months from its 2025 target.
Wesfarmers JV’s on Davyhurst project near Kalgoorlie
Wesfarmers has entered a binding joint venture and farm-in agreement with Ora Banda Mining which holds the Davyhurst project near Kalgoorlie, Western Australia.
Ora Banda will sell 65% of the property’s mineral rights (excluding gold and by-products) for A$26M cash and a 2% royalty. Wesfarmers can earn an additional 15% with A$15M of exploration while Ora Banda remains free carried to completion of a DFS.
The gold focused Ora Banda discovered spodumene pegmatite dykes on its Davyhurst property in April 2023, hitting 11.1m at 1.28% Li2O. The project area totals 1,100km2 over 140km of strike.
Adamas take: The JV appears to be a courageous effort from Wesfarmers subsidiary to replicate the strategy of its Mt. Holland JV partner, SQM. The hefty deal size is neat for Ora Banda though for Wesfarmers it implies significant exploration potential which may or may not eventuate.
Lepidco updates DFS economics for Karibib
Lepidco has updated a 2020 DFS study to include an additional ore body and stockpiles reserves, together with updated price forecasts for its Karibib project in Namibia.
The project integrates a lepidolite concentrator in Namibia with a lithium hydroxide plant in Abu Dhabi, UAE.
The capital cost has increased 91% to US$266M while C1 operating costs have increased 256% to US$5,891/t LCE including by-products. The mine life has extended 4 years to 19 years. Using a long-term hydroxide price at US$30,980/t (up from US$22,840/t), the projects NPV8% comes in at US$457M (up from US$221M).
Adamas take: The project’s unique characteristics will require unique funding and marketing solutions. To date, funding talks have delayed the project’s development. The DFS refresh should be welcomed in these discussions.
Lithium Energy announces Scoping Study results for Solaroz
Lithium Energy announced its PEA results for its 90% owned Solaroz project in the Olaroz salar, Jujuy province, Argentina. The results come one week after upgrading confidence for its 3.3 Mt LCE at 305 mg/L Li resource. Of note, the PEA assesses extraction of the “high-grade core” containing 1.3 Mt LCE at 400 mg/L Li.
The company reviewed both 20 ktpa and 40 ktpa LCE evaporation pond options. Capital costs were estimated at US$705M and US$1.28Bn respectively (incl. 30% contingency), while operating costs came in at US$4,985/t LCE and US$4,611/t LCE respectively. Using a flat US$25,000/t lithium carbonate price, the NPV10% post-tax comes in at US$1,319M and US$2,200M respectively.
The company is also reviewing absorption type DLE with 3rd party technology provider Lanshen, who has agreed to build a demonstration plant.
Adamas take: The results show no apparent cost advantages when compared to competitor DLE studies, only a perceived lower technical risk and faster permitting. Accordingly, DLE remains a real option.
Ioneer signs MOU with Ecopro on clay-to-hydroxide research
Ioneer has signed a non-binding MOU with South Korea’s EcoPro to research and develop a commercially feasible lithium clay-to-hydroxide process to be used at the Rhyolite Ridge project in Nevada, USA.
Under the agreement, EcoPro will develop the refinery and Ioneer will supply EcoPro the lithium clay raw material at no cost. Profits from product sales will be shared equally from a formula derived cost base.
Adamas take: The research project offers prospective long term benefits to the Rhyolite Ridge project and the US given it’s strategic interest in domestically sourced lithium hydroxide.
Power Minerals updates Rincon project MRE
Power Minerals has published an updated MRE for its Rincon brine project in the Rincon salar, Salta province, Argentina.
226 kt LCE was added for a total of 293 kt LCE at 266 mg/L Li. This was achieved with two holes to 502m and 606m depth placed adjacent to old shallow holes, and a third hole to 346m depth collared on new ground.
The company’s Salta portfolio now sits at 715 kt LCE.
Adamas take: The project’s scale is now comparable to nearby Argosy Minerals Rincon project, a project seeing difficulty ramping up its 2 ktpa conventional evaporation pond flowsheet. Considering the relatively low-grade brine, perhaps Power’s sorption type DLE flowsheet will ensure an easier pathway to product.
Pan Asian Metals updates Reung Kiet MRE in Vietnam
Pan Asian Metals announced a mineral resource upgrade for the Reung Kiet resource, adding 4.4 Mt for a total 14.8 Mt grading 0.45% Li2O (from 10.4 Mt at 0.44% Li2O). Material confidence was built into the resource with 53% in measured and 22% in indicated categories (from 100% inferred).
The lepidolite resource is being investigated for ore sorting at the front end, flotation and a typical sulphate roast at the back end of the flowsheet to produce lithium carbonate.
Adamas take: The company is seeking to replicate Jiangxi style integrated lepidolite cost competitiveness, strategic to SE Asia battery supply chains. The resource update, together with exploration and test work success, may position the project in line with these aspirations.
Chris Williams, Analyst at Adamas Intelligence
Chris is an Analyst at Adamas Intelligence focused on the global lithium industry. He researches and analyzes the lithium value chain to uncover actionable opportunities for clients.
Chris has 11-years experience in mining and oil & gas operations optimization, delivering value from data intensive insight generation. He completed his Bachelor and Masters of Engineering at the University of Queensland, majoring in Mechanical Engineering, and is currently completing a Masters of Business Administration at the University of British Columbia.
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