Kathleen Valley Lithium Project

HIGHLIGHTS  

  • PFS confirms potential for robust, long life open-pit lithium mine
  • Maiden Ore Reserve of 50.4Mt @ 1.2% Li2O.
  • Current Ore Reserve underpins a 26-year mine life with further growth expected from an ongoing 20,000-25,000m drilling program, the results of which will be incorporated into an updated Mineral Resource Estimate and subsequent Definitive Feasibility Study (DFS).
  • Metallurgical test work confirms ability to produce a +6% Li2O spodumene concentrate with an estimated recovery of 75% and low impurities.
  • Growth opportunities include:
    • Additional revenue from recovery of tantalum which will be determined as part of the DFS;
    • High potential for a larger Ore Reserve based on recent drilling which has extended thick, high-grade mineralisation well beyond the current Mineral Resource
    • Future integration of a potential underground operation to expand annual production and bring forward a higher grade material.
  • Recent capital raise of $18M will ensure ongoing project momentum. 
  • Located on granted Mining Leases in an established, well-serviced mining district, close to existing transport, power and camp infrastructure.
  • 100%-owned Project.

 

OPPORTUNITY  

The flagship Kathleen Valley Project is a globally significant lithium deposit, defined as the 5th biggest lithium resource in Australia – and growing. 

Kathleen Valley is located on granted Mining Leases in an established and well serviced mining region, approximately 680km north-east of Perth, Western Australia (Figure 1). 
The Project is readily accessible by sealed highways which connect with mineral exporting ports at Geraldton and Esperance. 

Other infrastructure located close to the Project includes a power line, a natural gas pipeline and mine camps with sealed airstrips capable of taking 100 seat jets.

Figure 1: Kathleen Valley Project Location

PRE-FEASIBILITY STUDY (PFS)

A recently completed PFS resulted in a maiden Ore Reserve of 50.4Mt @ 1.2% Li2O which will underpin a 2Mtpa mining and processing operation over a 26 year mine life. The Reserve was based on a Mineral Resource Estimate published in July 2019 of 74.9Mt @ 1.3% Li2O and 140ppm Ta2O5.

There is considerable potential to extend the mine life and/or increase the annual production with recent results from an ongoing resource expansion drilling program extending thick, high-grade mineralisation at least 400m along strike from the Mineral Resource. 

It is envisaged that the Project’s economics will be further enhanced with the inclusion of a tantalum circuit that will be considered as part of future feasibility studies which will commence immediately.
Lycopodium Minerals Pty Ltd supervised the PFS which been completed with the assistance of a highly experienced and reputable group of independent consultants, including:

•    Optiro Pty Ltd – Geology and Resources 
•    Orelogy Consulting Pty Ltd – Optimization and Mining 
•    Nagrom – Process Testwork
•    Lycopodium Minerals Pty Ltd – Process and Infrastructure Design, CAPEX and OPEX 
•    Knight Piesold – Tailings Management Facilities 
•    AQ2 – Hydrology and hydrogeology 
•    MBS and Botanica – Environmental  

The PFS studied the establishment of a 2 million tonne per annum mining and processing operation delivering 260 – 280ktpa of spodumene concentrates in full production. Following conventional open pit mining and delivery to the Run-of-Mine pad, ore will be processed to concentrate the lithium and tantalum. Concentrates will then be transported in bulk for delivery to downstream customers. Figure 2 shows the proposed site layout including mining areas, processing facilities and non-process infrastructure.

Figure 2: Kathleen Valley proposed mine site layout

View the Pre-Feasibility Study here.

View the Mineral Resource Estimate here.

View the Scoping Study here.

Figure 3:  Drill rig operating at the Kathleen Valley Project, October 2019

RESOURCE EXPANSION

The Mineral Resource Estimate (MRE) on which the PFS is based remains open along strike and at depth and a 15,000 – 25,000m resource expansion drilling program is in progress to test for extensions of the mineralised system.
Initial results from this drilling program (see ASX release dated 5th November 2019) have confirmed that thick, high grade mineralisation extends northward beneath shallow cover for at least 400m beyond the current MRE, bringing the total length of the system to least 1.4km (Figure 4). In addition, thick (>50m), high grade mineralisation has been intersected down dip of the MRE.

Prior to commencing the drilling program, Liontown defined a resource extension Exploration Target of 25 – 50Mt @ 1.2 – 1.5% Li2O, which was defined based on testing for extensions of the current Mineral Resource Estimate from the limits of previous drill data to a vertical depth of ~500m below surface (see ASX release dated 5th November 2019 for full explanation of assumptions used to estimate ranges). This Exploration Target is in addition the current 74.9Mt MRE.

(The potential grade and tonnage of the Exploration Target is conceptual in nature and there has been insufficient exploration to estimate an expanded Mineral Resource. It is uncertain if further exploration will result in the estimation of an expanded Mineral Resource).

The latest drilling results indicate that the Exploration Target is achievable and that the Mineral Resource could be increased significantly. 

An updated MRE will be prepared in Q1/Q2 2020 and this will be incorporated into the Definitive Feasibility Study which will also consider the feasibility and economic impact of increasing the annual mining rate.

Figure 4:  Drill hole plan showing better lithium intersections from current and previous drilling programs

For further information please see our Investor Presentation and ASX Announcements.

GEOLOGY

The Kathleen Valley Lithium-Tantalum Project is located on the western edge of the Norseman-Wiluna Greenstone Belt within the Archaean Yilgarn Craton of Western Australia. The belt consists of dominantly mafic and ultramafic volcanics as well as considerable volumes of clastic sediments, minor felsic volcanics, and differentiated gabbros.  The greenstones in the Kathleen Valley area have been metamorphosed to upper greenschist-lower amphibolite facies metamorphic grades and include tholeiitic lavas, differentiated gabbroic sills and ultramafic chlorite schists.

Lithium mineralisation is hosted within spodumene-bearing pegmatites, which are part of a series of LCT-type rare metal pegmatites that intrude mafic and sedimentary rocks in the region.

Seventeen mineralised pegmatites have been identified at the Kathleen Valley Project hosted by two, outcropping, NW/SE trending pegmatite swarms – a shallowly-dipping, north-eastern swarm (Kathleen’s Corner), which contains approximately 80% of the pegmatites, and a steeper dipping south-western swarm (Mt Mann). The two swarms are interpreted to merge at depth to form a single, thick, moderately dipping mineralised body which remains open down-dip and along strike.

The Measured, Indicated and Inferred Mineral Resource, which was prepared by independent specialist resource and mining consulting group Optiro Pty Ltd (“Optiro”), comprises 74.9Mt @ 1.3% Li2O and 140ppm Ta2O5 and is set out in Table 1.

Table 1: Kathleen Valley Mineral Resource as at July 2019

The Mineral Resource estimate has been prepared by a Competent Person and is reported and classified in accordance with the guidelines of the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code; 2012).

LAND STATUS

The Kathleen Valley Lithium Project comprises four Mining Leases (MLs) and one Exploration Licence (EL). The MLs and rights to pegmatite hosted rare-metal mineralisation were acquired from Ramelius Resources Limited via a Sales Agreement completed in 2016. The MLs were transferred to LRL (Aust) Pty Ltd, a wholly owned subsidiary of Liontown Resources Limited (LTR).

In July 2019, LRL acquired the remaining mineral rights (including gold) from Ramelius.

Ramelius acquired the Kathleen Valley Project MLs in June 2014 from Xstrata Nickel Operations Pty Ltd (Xstrata). Xstrata retains rights to any nickel discovered over the land package via an Offtake and Clawback Agreement.

LRL (Aust) Pty Ltd has assumed the following Agreement:

  • 2% Gross Production Royalty affecting M36/264-265 and 459-460.

The EL is in the name of Liontown Resources Limited (LTR) with no third party obligations apart from statutory requirements.

RELATED DOCUMENTS

Click here for JORC Tables.

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