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PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Bald Hill lithium mine, in Western Australia, has estimated that project construction would require a capital investment of A$42.2-million to support production of 155 000 t/y of spodumene concentrate over an initial mine life of 3.6 years.
ASX-listed Tawana Resources said on Tuesday that the project was also expected to deliver 260 000 lb/y of tantalum pentoxide from a flotation circuit, based on a maiden lithium ore reserve of 4.3-million tonnes, at 1.18% lithium oxide and 208 parts per million tantalum pentoxide.
The PFS estimated that the Bald Hill operation would deliver average earnings before interest, taxes, depreciation and amortisation of around A$83-million a year for the starter-pit, generating a net present value of A$150-million and an internal rate of return (IRR) of 185%.
“The results show an impressive IRR and payback period. Given we have a modest-size brownfields construction project, we believe we are on track to become one of Australia’s next lithium producers with our first shipment planned for the first quarter of 2018,” said Tawana MD Mark Calderwood.
“We are keeping our strategy of fast-tracking lithium production to take advantage of the strong near-term demand, while minimising dilution to our shareholders. Given our spodumene recovers so well through the dense media separation (DMS), and produces a high-grade concentrate, the two-phase production approach of getting the DMS commissioned in 2018 and then looking to construct a floatation circuit out of cash flow has assisted the Bald Hill project to being one of Australia’s lowest upfront capital cost, standalone lithium projects.”
Meanwhile, Tawana was also continuing to explore at the Bald Hill project, with Calderwood saying on Tuesday that there was significant exploration upside potential at the project.
“The company has only drilled 20% of the known pegmatite footprint and there are significant other portions of our tenements that are unexplored, so we are very confident of being at Bald Hill for many years to come.”
Tawana is now in early-stage discussions with potential financiers to fund the capital costs to develop the Bald Hill mine.
The ASX-listed company recently earned a 50% shareholding in the Bald Hill mine by spending the required A$7.5-million under a A$12.5-million earn-in agreement that will see the company upgrade and convert the Bald Hill plant to process ore from the project area.