I've been struggling for a while to keep track of all of the different feed source irons that the team have in the fire, so I sat down and consolidated it all into a summary for myself. Then I figured I might as well share it here, and we can have a thread just for posting about the different feed sources as they develop, as well as speculating on who LPD might do offtake agreements etc.
Given that the latest interview suggests there will be at least 2, if not 3, full scale plants operating by the middle of the next decade, feed sources are going to be something we will have to start paying more attention to from next year, I think. Not to mention what Peg 9 and Moriarty might deliver in the next few months.
Anyway, I hope I haven't missed anything and I'm more than happy to be corrected if anyone spots an error.
Cheers
LPD Potential Feed Sources
Alvarroes
Located in Portugal, near the city of Guarda
An existing lepidolite mine
LPD signed a binding term sheet with Groupo Mota, 75% owner and operator of the mine, to spend €250,000, which has been met
LPD have an exclusive right to negotiate a commercial ore supply agreement with Groupa Mota, or for LPD to develop its own mine and concentrator project at Alvarroes
If LPD goes mining, an agreed tonnage of lepidolite feed will be made available to Groupa Mota to continue their operations using Lepidolite
LPD has defined a JORC resource of 1.5Mt at 1.1% Li20. This resource is considered enough to feed a P1 plant for 10 years, with further exploration potential available
LPD is considering a 150ktpa ore concentrator, which would produce 30ktpa of concentrate for the P1 plant
The company are also considering if this plant will produce feldspar and quartz, which may be marketable through Groupo Mota’s existing networks, or parallel to them
Alvarroes appears to be the most likely primary feed source for P1 in Sudbury, based on the work that has been conducted to date
Mt Cattlin
Located in southern WA, northwest of the Esperance port
No formal arrangements exist yet for any offtake between GXY and LPD
However, the “About Lepidico” blurbs on public announcements currently include the phrase:
Galaxy will assist Lepidico with future business and growth opportunities, that include the evaluation of potential synergies with its Mt Cattlin Mine and James Bay Project
Further, on 1 March 2018, LPD announced that tailings from Mt Cattlin graded at 2.7% Li2O were used to create 99.8% battery-grade lithium carbonate
A flotation circuit was used to increase the grade to 4%, then the L-Max process conducted which recovered 94% of the lithium. Overall, 90% of the lithium from the tailings was recovered. A standard suit of L-Max by-products were also produced.
Optimisation work is being evaluated to maximise lithium and by-product extractions, while minimising acid and power consumption
Notes:
Given the work being conducted to optimise the process for Mt Cattlin, it is reasonable to believe that Mt Cattlin will be a secondary feed source for P1
As of December 2017, Mt Cattlin reported 407k tonnes of Li20 at 0.97% in its tailings dam. It is not known what the mica content of this stockpile is, but it possibly represents ~90k tonnes of feed ore for an L-Max P1 plant from what is just stockpiled there. That number is likely to grow as the mine continues to operate.
Separation Rapids
Located north of Kenora, Canada
LPD have entered a letter of intent for Avalon Advanced Materials to sell LPD a minimum of 15ktpa of lepidolite concentrate
Would be selling the lepidolite as a by-product from their petalite mining and refining operation, which is set to start construction in 2018
As part of the P1 PFS, a sample from Separation Rapids graded at 2.7% Li2O was provided to LPD, and produced battery grade lithium carbonate of 99.88%
A flotation circuit was used to increase the grade to 4.5%, then the L-Max process conducted which recovered 96% of the lithium. Overall, 94% of the lithium from the tailings was recovered. A standard suit of L-Max by-products were also produced.
Notes:
Given the similar timing of construction and the co-location of both Avalon’s operation and LPD’s P1 plant being in Ontario, it is reasonable to believe that Separation Rapids will be a secondary feed source for P1
Peg 9 (Pioneer Dome):
Located near Norseman in southern WA, north of Esperance port
LPD earning 75% from Pioneer Resources
Targets:
28 Feb 2018 - LPD to have undertaken preparation work to enable delineating a JORC resource of at least 500,000 tonnes grading at least 1.2% Li20
22 Feb 2019 - LPD to have delineated a JORC resource of at least 500,000 tonnes at least 1.2% Li20
Well located for shipping out of Esperance, possibly coinciding with shipments from Mt Cattlin
Moriarty
Located near Kambalda in southern WA, north of Norseman and Esperance port
LPD earning 75% of the lithium rights, can secure 100% from Maximus Resources
Targets for 75%:
Issue $80,000 of LPD shares to MXR (completed in August 2017)
21 Feb 2018 - Pay $120,000 in cash or shares to MXR
21 August 2018 - Pay $150,000 in cash or shares to MXR
Target for 100%:
Within 3 years of third payment - Pay $400,000 in cash, or $200,000 in cash and $200,000 in shares to MXR
Notes
Assumedly the 21 Feb 2018 payment was made, though there was no announcement, nor any share issuances around that time. Without a 3B announcement notifying that shares were issued, I expect cash was paid, and it will be covered in the quarterly, hopefully out next week.
Well located for shipping out of Esperance, possibly coinciding with shipments from Mt Cattlin
James Bay
Located in Quebec, Canada
Still in the feasibility stage as a project by GXY
However, the “About Lepidico” blurbs on public announcements currently include the phrase:
Galaxy will assist Lepidico with future business and growth opportunities, that include the evaluation of potential synergies with its Mt Cattlin Mine and James Bay Project
Additionally, the feasibility study includes a “downstream lithium conversion facility”
As a spodumene project, this will obviously be a spodumene facility. It will be interesting to see if there is consideration given to mica tailings, or even an L-Max production line included in the design.
As of GXY’s annual report released 11 April 2018, the project team for the feasibility study were focused on concluding activities. An estimated release date is not known.
Honourable mention: Lemare
Located in James Bay region, Canada
LPD earning 75% of the project from Critical Elements Corporation
Targets for 50% (updated from the original agreement):
31 August 2017 - Spend C$800k on exploration
31 August 2018 - Spend C$1.2m on exploration and delineate a JORC resource
Targets for 75%:
30 June 2020 - Complete a feasibility study and environmental study and pay Critical Elements C$2.5m in cash or shares
As a spodumene project, Lemare doesn’t offer a potential L-Max feed source.
However, a delineated JORC resource would have value, and may be able to be sold to a third party once that stage is complete. Alternatively, the team may decide to pursue a feasibility study to further increase the value.
Lemare doesn’t fit as a key goal of LPD, but still has value that I’m sure they will try to extract.
Feed sources for P1
The PFS outlines that a 3000tpa L-Max plant requires ~29,000 tonnes of 4% concentrate
However, the installed capacity for P1 is likely to be 5000-6000tpa, which means another 20,000 - 30,000 tonnes of concentrate are going to be needed to process through the expanded facility
The two likely contenders are Separation Rapids and Mt Cattlin, with possibly some coming from both
No doubt the team have a strategy here, we will just have to wait to hear what it is
Looking from a strategic perspective, GXY made an investment in LPD. This is likely to have been to gain access to the tech, or to at least have a customer to sell their mica to. It is logical that P1 will see some ore from Mt Cattlin
Feed sources for P2
If a 3000tpa L-Max plant requires 29,000 tonnes of concentrated ore coming out of a 150,000tpa concentrator, then a 20,000tpa L-Max plant is going to need about 195,000 tonnes of concentrate coming out of a 1Mtpa concentrator
This needs to be considered in terms of scale. GXY’s concentrator at Mt Cattlin I believe is a 1.5Mtpa facility (happy to be corrected here)
The point is, we need to remember that to get LPD to operating even 1 full-scale L-Max plant is going to be running some serious mining operations, or buying a hell of a lot of tailings from other miners.
Because of this, I expect to see a lot more being spent on exploration in mid 2020, as money starts to flow in from P1 operating
Alvarroes, Separation Rapids and Mt Cattlin are obviously also possibilities, if there is a burgeoning supply from all three and more than P1 can utilise
Peg 9 and Moriarty would likely be developed for this purpose
Due to the points outlined above, I will be very curious to see what sort of resources can be defined from the drilling, which is meant to be sorted in the next couple of months.
A number of announcements point to taking tailings from spodumene operations
Mt Cattlin’s tailings converted into battery grade product
Joe’s comments about being able to add value to spodumene operations on two separate occasions
“This really demonstrates the flexibility of L-Max®. It has the capability to economically extract lithium chemicals from tailings containing relatively modest quantities of lithium-mica. Lepidico provides a significant value-add opportunity for existing spodumene operations that are processing ores that also contain lithium-mica and phosphate minerals. (http://resourceglobalnetwork.com/portfolio_page/lepidico-2/)
(20min delay)
