JOHANNESBURG (miningweekly.com) – Dual-listed Tawana Resources has, as part of an earn-in agreement with Lithco, completed due diligence on the Bald Hill lithium mine, in Western Australia.

The company has also decided to acquire Lithco, which will result in Tawana becoming the joint venture (JV) partner of Alliance Mineral Assets Limited (AMAL) in the project.

Lithco has previously entered into a farm-in and JV agreement with Singapore-based AMAL over the Bald Hill project, under which it will spend a minimum of A$7.5-million on exploration, evaluation and feasibility studies before the end of December 2017.

The acquisition of Lithco potentially allows Tawana to become an Australian spodumene producer in the second half of 2017.

The due diligence has highlighted that the project holds extensive spodumene pegmatites, intercepted in wide-spaced drilling, indicating significant tonnage potential, over and above existing tantalum reserves.

This, the company noted, was an early indication of a highly profitable operation and rapid payback period at the Bald Hill mine, which was outlined in a conceptual engineering study including a low capital cost by retrofitting a spodumene circuit.

Tawana was now moving towards being construction-ready by the end of the first quarter of 2017.  The company would now focus on declaring a maiden lithium resource estimate; completing metallurgy testwork with an optimised flow sheet and the completion of a prefeasibility study including detailed design and placing orders for key capital components.

Further, Tawana will also look towards awarding the engineering, procurement and construction contract in the new year, while narrowing down potential offtakers, reviewing prepayment and other financing opportunities.

MD Mark Calderwood stated that the mine represented a unique opportunity for the company to quickly enter the spodumene supply chain with modest capital expenditure at a time when demand is strongly outpacing uncommitted supply.

“Engineering in the new year will focus on fast-tracking completion of the feasibility focused on installation of a dense media separation circuit and rescheduling of the mine plan after a revised reserve estimate covering both lithium and tantalum,” he noted.