Investing News Network recently spoke with Lithium Australia Managing Director Adrian Griffin about the company’s innovative Sileach™ lithium recovery process, highlights from a recent successful pilot plant run, new partnerships and ongoing projects in Western Australia.
Lithium Australia NL (ASX:LIT) is focused on developing advanced lithium extraction technologies such as its Sileach™ process, which allows for the recovery of all metals, including lithium, from any silicate mineral without roasting, provides commercial opportunities for newly mined materials and reduces the cost of producing lithium chemicals.
Lithium Australia aims to efficiently supply lithium carbonate and lithium hydroxide, establishing processing hubs in areas with an abundant supply of lithium minerals. The company, which has developed partnerships with other resource companies in both Australia and North America, is currently testing its extraction technology on lithium deposits within Australia, as well as in other prospective locations.
Through its strategic partnerships, Lithium Australia is working to develop a substantial resource base for sustainable production – delivering battery-grade lithium chemicals at prices competitive with the world’s current lowest-cost producers.
In October 2016, Lithium Australia announced a new partnership with lithium explorer MetalsTech, providing the company with significant equity and technology leverage across six highly prospective hard rock lithium projects in Quebec, Canada. MetalsTech is applying to listing on the ASX under ticker code MTC.
During the same month, Lithium Australia also completed the transfer of lithium rights from Lefroy Exploration Ltd., (ASX:LEX) giving the company access to most of the prospective Lake Johnston lithium pegmatite field in Western Australia where five lithium prospects have been identified to date.
Investing News Network: In the past 30 days, Australia Lithium has delivered more significant news than most other companies do all year. Lithium Australia has developed a potentially disruptive lithium recovery process which you are now testing. Would you be able to give us some insight into the Sileach™ process and what it could mean for the industry?
Adrian Griffin: I think the first thing is to have a look at what’s been done historically and being done at the moment on a global basis. Out of hard rock, only one lithium mineral is currently processed and that’s spodumene. The means of doing that is roasting and leaching. It’s very energy intensive and it’s very expensive. We’ve developed an alternative process, which eliminates much of the energy requirement. It’s a hydrometallurgical process and it’s the only available way to process all lithium silicate minerals. That’s quite important because it opens up sources of various materials—including tailing dams, mine dumps or subeconomic deposits— to commercial processing by way of cheaper operating costs. We perceive these costs will be quite comparable to the cheapest operating costs of any lithium chemical production. It will be comparable to the cost of recovering, for example, lithium carbonite from brines. If you can reduce that cost profile to such an extent, there are lots of lithium materials around the globe capable of being processed economically.
INN: Earlier this month, you released results of a successful pilot plant run. Would you share with us some of the important highlights from those results and what it means for Lithium Australia’s work?
AG: We achieved excellent lithium extractions that were in excess of 95 percent. We achieved the availabilities on that plant in excess of 98 percent, so we demonstrated that, on a continuous basis, the process is readily controllable. It produced very clean lithium solutions, almost impurity free, for downstream processing to produce lithium chemicals. It demonstrates that this technology, which is the core of our business plan, looks at this stage to be very viable.
INN: Let’s talk about your strategic partnerships. Could you tell us about your agreement with Pilbara Minerals (ASX:PLS) and how this fits in with the company’s growth strategy?
AG: Pilbara is heading towards owning the largest spodumene deposit in the world at Pilgamgoora. It’s getting very close to Greenbushes in terms of size, and that is the largest hard-rock lithium mine in the world, so it’s a major focus for future hard rock lithium production on a global basis. We entered into an arrangement with Pilbara, following their review of the technology, to commercialize the Sileach™ process specifically for use on the Pilgangoora deposit.
There are a number of stages involved in consummating that agreement right through to the final 50/50 joint venture between the two of us. The first step is demonstrating that we can do this on a pilot basis; those pilot tests are to be conducted on Pilgangoora spodumene concentrates in the very near future. We need to run a pilot test on specific material from their deposit. We will then expand to a larger scale demonstration plant, based on a production rate of about 2000 tons of lithium carbonate per annum, to show that we can run that effectively. If we demonstrate that we can run that plant for a significant period of time on their material, then we can proceed to a 50/50 joint venture using Sileach™ technology to process spodumene from Pilgangoora.
INN: Pilbara is not your only partner now in the lithium sector. Recently, you announced a new lithium clay zone discovery at the Electra Project in Sonora, Mexico. Please tell us about the partnership with Alix Resources (TSXV:AIX), your latest discovery and what’s next.
AG: Our partner is Alix Resources out of Canada. Alix at the moment has a 75 percent equity in the Electra project, and we have a 25 percent equity. It’s a farm-in where we can develop the project and earn up to 65 percent. The most significant aspect of this deposit is that it flanks, both to the north and south, one of the world’s largest known lithium clay deposit, which belongs to Bacanora Minerals. We have been looking at the extensions of the mineralization adjacent to Bacanora’s project.
More recently, a little bit further to the south and abutting onto our ground, we found further clays that had very high lithium values right on surface. When I say high values, that’s up to about one thousand parts per million. What you find under most circumstances is a fair bit of leaching close to the surface. Grades approximately 100 to 200 hundred parts per million at surface are very significant, but we’ve found grades up to 1,000 parts per million. We have put new applications in for tenure over that ground and we’ll certainly start pursuing exploration there once it’s granted.
INN: On October 19, you announced a partnership with MetalsTech, which is pre IPO and developing a portfolio of new hard rock properties in Quebec. Why MetalsTech? How will this deal benefit Lithium Australia?
AG: There are a number of things to take into consideration. The first benefit to Lithium Australia is a significant shareholding in MetalsTech. We have an agreement based on a number of achievement milestones. As we reach those milestones, we get progressively more equity in the company. It’s similar to the arrangement we had with Pilbara with the milestones built around commercialization of Sileach™ to match those deposits. The deposits MetalsTech have are fairly conventional hard rock lithium deposits. They’re primarily spodumene and they’ve got six of them. All the addresses are excellent, and the most prominent abuts Nemaska’s operations in Quebec.
As part of the deal, we are issuing a processing license to MetalsTech. That processing license will be restricted to operations in Quebec. We are giving Lithium Australia shareholders the advantage of having a priority entitlement in the MetalsTech IPO. If any Lithium Australia shareholders want to get direct equity in our latest investment, they can do so by way of that priority entitlement.
INN: So what’s the key investor takeaway here for this deal?
AG: I think the quality of the projects and the ability to process them with low-energy, cost-effective processing technology, which will be a huge advantage long term to MetalsTech, and at the same time a significant advantage to Lithium Australia shareholders. I should add that subject to all of that is a two-percent royalty that goes back to Lithium Australia, so anything that MetalsTech does commercially will generate revenue for Lithium Australia.
INN: Finally, is there any activity from your Western Australia projects that would be important for investors?
AG: Lots. I think the most significant is recently lithium pegmatite was identified on ground surrounding our Lake Johnston property in Western Australia. At Lake Johnston, we have abundant lithium pegmatites which extend across the lease boundaries. We contacted the owners of the deposits surrounding our property, Lefroy Exploration, and said we’d like to procure the rights for the lithium. Lefroy is restructuring the into a base metal and gold explorer. So, we’ve done a commodity swap agreement whereby they get the base metal and gold rights to our properties and we get the lithium rights for their property. It gives us very good exposure to an unexploited pegmatite field which is close to infrastructure. Some of that infrastructure includes a processing plant that can be readily adapted to produce lithium concentrates, so it’s a great location. As part of the commodity swap agreement, they’ve taken equity in Lithium Australia and we have equity in Lefroy Exploration.
In regards to other locations in Western Australia, at Ravensthorpe we’ve found a significant number of lithium-bearing pegmatites which are quite good in terms of size and aerial extent. We have environmental permits to start exploration work on those in the near future. We’re doing a little bit of exploration work around the Greenbushes area, and we recently acquired a company which had very prospective ground in the Gascogne province in Western Australia. We’ll be starting exploration on that also in the near future.
CEO interviews are part of investor education campaigns for clients advertising on the Investing News Network. Important news is contextualized by CEOs, and the resulting interviews are disseminated to the Investing News Network audience because they have value to market watchers.
The Investing News Network interviews a CEO for an understanding of their perspective on the company, the investment potential of the company and market news related to the company. The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities.