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PERTH (miningweekly.com) – A scoping study has estimated that the Kathleen Valley lithium project, in Western Australia, could produce some 360 000 t/y of spodumeme concentrate over an initial mine life of nine years.
ASX-listed Liontown Resources on Tuesday revealed that the project was expected to require an investment of some A$232-million. It would deliver a post-tax net present value of between A$316-million and A$526-million, and an internal rate of return of some 38%.
“We are very pleased with the results of the scoping study, which has confirmed the potential to establish a significant new standalone lithium mining and processing operation at Kathleen Valley capable of producing a spodumene concentrate for global and local markets,” said Liontown MD David Richards.
“The scoping study outlines a base case two-million-tonne-a-year development with the potential to produce 360 000 t/y of spodumene concentrate over an initial eight- to nine-year mine life, a similar scale of operation to those which have recently been successfully commissioned in the Pilbara region of Western Australia by Pilbara Minerals and Altura Mining.”
He added that using conservative forecast production pricing assumptions, the scoping study had also estimated competitive life-of-mine cash operating costs of about $376/t free-on-board of spodumene concentrate, and potentially $308/t net of tantalum credits.
“This highlights the potential for the development of a robust standalone mining and processing operation capable of generating strong margins and excellent financial returns, based on a forecast capital outlay of A$232-million, which is similar to the scope of other recently established lithium mines in Western Australia.”
Richards said that given the impressive results and the project’s location, as well as the strong potential to continue to grow the resource base, the Liontown board has approved the start of further studies, and a new drilling programme.
A full definitive feasibility study is due by early 2020, after which the project would likely move into the financing and construction phase.