Had a look at the Sonara mine to see what processing differences there were between the hectorite clay deposits of Northern Nevada and the GSC target clays which I gather are more like the Sonara clays.
SONORA LITHIUM PROJECT
With an Indicated Mineral Resource estimate of 5.0 million tonnes ('Mt') of lithium carbonate equivalent ('LCE') and an Inferred Mineral Resource of 3.9 Mt of lithium carbonate equivalent ('LCE'), Sonora is regarded as one of the world's larger known clay lithium deposits. Following the results of the PFS, management is focused on advancing the development of Sonora as it looks to bring the project into production to satisfy expected strong growth in demand for lithium from fast growing sectors, such as electric vehicles and energy storage.
Sonora holds one of the world's largest lithium resources and benefits from being both high grade and scalable. The project, which is located in an existing mining district and has excellent access to infrastructure, consists of 10 contiguous concessions covering 104,064 Ha and is located 190km NE of Hermosillo in northern Mexico. The Company has a 100% interest in the La Ventana concession and a 70% interest in Mexilit and Megalit.
The N43-101 resource, which has significant potential upside, has been identified as follows across the groups of concessions:
Category Cut-off (ppm) Tonnes Li (ppm) K (%) LCE (000t) LCE attributable to
Bacanora (000t)
Indicated 450 364,000 2,600 0.9 4,997 4,070
Inferred 450 355,000 2,000 0.7 3,853 3,220
Category Tonnes Ore (000t) Li (ppm) K (%) LCE (000t) LCE attributable to
BCN (000t)
Probable 129,774 3,015 1.28 2,083 1,813
Reserves:
Pre-Feasibility Study demonstrates highly attractive economics of Sonora
Key findings of the PFS are shown in the table below:
Production 35,000 tpa
Average LOM operating costs (US$/t Li2CO3) ~ 2,700*
Av. operating costs (US$/t Li2CO3 net of K2SO4 credits) 2,100
Initial Construction Capital Cost (US$) 240m
Net Present Value ($USM) pre-tax $776m
IRR (%) pre-tax 29
Simple Payback (years) 5
Average annual EBITDA with co-products (US$) 127m/year
Stage 2 Construction Capital Cost (US$) $177m
Post-tax NPV (at 8% discount) ($million) $542M
Post-tax IRR (%) 25
The above is based on a two phase open-pit mine and lithium carbonate processing facility with a life of over 20 years
Phase 1: 17,500 tonnes per year of battery-grade Li2CO3, for the first 2 years
Phase 2: Expansion to 35,000 tonnes Li2CO3 per year
Potential to produce up to 50,000 tonnes per year of potassium sulphate (SOP, K2SO4) in the third year, for sale to the domestic Mexican fertiliser industry
Mining Operations
An open-pit mining operation is envisaged using conventional truck/shovel mining methods. The mining design indicates a total of 47 Mt of ore to be mined over the planned 20-year mine life. The mineral reserve estimates were prepared by IMC Mining Consultants in Tucson, Arizona. The reserve estimate used an ore recovery factor of 90% and a mining dilution rate of 10% at an average dilution grade of 0%. Life-of-Mine stripping ratio is approximately 3:1.
Processing
Metallurgical testwork for the PFS was carried out at SGS Lakefield Laboratories in Canada and process engineering and design for the process plants and infrastructure was completed by Ausenco Limited. The processing plant design comprises a pre-concentration stage including scrubber, hydro-cyclones and reverse flotation to produce an initial concentrate prior to roasting. The concentrate is subsequently heated in a kiln, at approximately 1,000 degrees Celsius, with gypsum ('Ca2SO4') to produce a lithium sulphate ('Li2SO4') product. This sulphate material then undergoes hydrometallurgical treatment, filtration, cleaning, precipitation and packaging, to produce a 99.5% Li2CO3 final battery grade product. The integrated plant has been designed to initially process 1.4 million tonnes of ore per year, during the first two years of the project, subsequently increasing to some 2.7 million tonnes per year subsequent to year three.
The plant design also includes a circuit to produce 50,000 tonnes per annum of commercial grade K2SO4through a series of evaporation, precipitation, filtration and packaging stages. The plant has the potential to produce up to 50,000 tonnes per annum of this material, which could be sold as a fertiliser grade product for domestic consumption in Mexico.
Pilot Plant
CAD$13.7 million has been invested to date both on exploration and on the development of a pilot plant in nearby Hermosillo which has produced high quality lithium carbonate during ongoing testwork conducted over 24 months. This is a key differentiator and positions the Company favourably in comparison to its peers ahead of off-take discussions. The Company has commenced discussions with potential off-take customers for its future lithium production, and this will continue throughout the next 12-18 months.
If the deposits are in fact the same clay types this data does give some idea of the GSC task.
GSC Price at posting:
3.2¢ Sentiment: Hold Disclosure: Held
(20min delay)