PERTH (miningweekly.com) – A scoping study into the Sepeda lithium project, in Portugal, has identified the production of a mineral concentrate to be the preferred route of development, with an underground operation likely to result in the best outcome.

ASX-listed Novo Litio on Monday told shareholders that the scoping study at Sepeda had tested a number of processing scenarios, including the production of a technical grade petalite concentrate, a dual-stream concentrate and battery-grade lithium carbonate, and a lithium carbonate product only.

The study found that the mineral concentrate production scenario would be highly favourable, given the current size of the mineral resource, while the capital expenditure required to build a lithium carbonate plant showed that a larger resource would be required to make the scenario economically feasible.

“Having examined both openpit and underground mining scenarios, we believe that the geometry of the Sepeda pegmatite lends itself well to underground mining techniques, such as long-hole open stoping, which can be conducted extremely cost effectively in Portugal,” said Novo Litio CEO David Frances.

“The scenario of building a mineral concentrate plant, to produce an ultra-low impurity technical grade lithium concentrate, has been shown to be favourable. We have determined that a larger mineral resource will be needed to justify the capital expenditure for a hydrometallurgical plant required for the production of lithium carbonate/hydroxide,” he added.

Frances said that as a result, the company would proceed on the basis that a mineral concentrate plant was currently the most optimal option, while pursuing mineral resource growth in order to achieve its goal of becoming a lithium carbonate/hydroxide producer.

A mineral resource update for the Sepeda project was planned for the fourth quarter of this year, and should go some way towards achieving this target, Frances added.

Novo Litio turned to the courts in Portugal in July to confirm its legal standing on the licences making up the Sepeda project. The company believes it has a binding agreement to acquire 100% of the granted licence and licence applications held by Lusorecursos ARG and Lusorecursos LDA.

"Completion of the transfer of licences to Novo Litio remains pending and has been frustrated by the vendors. Novo  Litio has sought unsuccessfully to resolve the issue on a commercial basis. The company considers it has binding and enforceable legal rights and is pursuing the matter on an expedited basis in the courts of Portugal."

Meanwhile, Novo Litio on Monday also reported the acquisition of a granted tenement package around Sepeda, adding 354 km² to the company’s landholding in the region.

The tenement package was acquired from TSX-V listed Medgold Resources, and provided the ASX-listed junior with an exploration pipeline in the immediate vicinity of its Sepeda project.

“We are very pleased to bolster our core Sepeda lithium project with a much-increased granted exploration licence footprint in the area, and a promising pipeline of exploration targets analogous to Sepeda.

“We are now the largest granted tenement landholder in the northern Portugal lithium belt, which provides us with tremendous upside for our lithium resource discovery at Sepeda,” said Frances.