Wrap Text
Bald Hill Lithium-Tantalum Project to Deliver Outstanding Cash-Flows and Returns
Tawana Resources NL
(Incorporated in Australia)
(Registration number ACN 085 166 721)
Share code on the JSE Limited: TAW
JSE ISIN: AU0000TAWDA9
Share code on the Australian Securities Exchange Limited: TAW
ASX ISIN: AU000000TAW7
(“the Company” or “Tawana”)
Bald Hill Lithium-Tantalum Project to Deliver Outstanding Cash-
Flows and Returns
Tawana Resources NL (“Tawana” or the “Company”) is pleased to announce that the Bald Hill Mine in Western
Australia (Project) is on track to become a low-cost producer of quality spodumene (lithium) concentrate in early
2018 following outstanding results from a Pre-Feasibility Study (PFS).
Bald Hill PFS Highlights (Tawana earning a 50% interest in Project, owns 50% of Lithium Rights)1 and A
- Confirms technical and financial viability of a 1.2Mtpa lithium Dense Media Separation circuit (DMS) adjacent to
the existing tantalum processing facility (TPF).
- Forecast annual production of approximately 155,000tpa of spodumene concentrate from the DMS and 260,000lbs
pa of tantalum pentoxide from the TPF.
- Maiden Lithium Ore Reserve of 4.3Mt at 1.18% Li2O and 208 ppm Ta2O5 representing approximately 90% conversion
of existing Indicated Resources. Additional tantalum Ore Reserve of 1.4Mt at 317ppm Ta2O5.
- Declared Ore Reserve underpins an initial “starter pit” life of 3.6 years with further growth for the Project
expected from infill and extensional drilling. Inferred Resources outside the scope of the PFS are an additional
8.2Mt at 1.14% Li2O, most of which is contained within scoping level pit optimisation shells, indicating potential
for a 10-year mine life prior to resource growth.
- Long lead items have been ordered, and construction mobilisation has commenced under an early works contract.
Production is scheduled for the March quarter 2018.
Economics
- Exceptional Project economics with an IRR of 185% and payback in approximately 12 months.
- Lowest capital-cost lithium project in Australia at A$42M (excluding pre-production operating costs). A$37.5M
already committed to the Project with Tawana earn in ($12.5m) and off-take contractual pre-payments ($25m).
- Average EBITDA for “starter pit” life-of-pit of approximately A$83M per annum.
- Operating cash flow for the “starter pit” of approximately $223M.
- The NPV10% of the “starter pit” is A$150M, potential to increase significantly with upgrade of Inferred Resources
and inclusion of a low-cost Lithium Fines Circuit.
- Estimated life-of-pit operating cash costsB of only A$508/tonne (US$381/tonne) of spodumene concentrate FOB
(including tantalum pentoxide by-product credits) resulting in a 100% pre-tax margin.
Opportunities for Growth
- Significant opportunity to increase annual production by treatment of stockpiled screened fines and middling
concentrates containing about 25% of mined lithium, through the Lithium Fines Circuit currently under
consideration. Approximately A$117/tonne of operating cash costs carried by the DMS concentrate operating
costs.
1 All figures throughout this announcement regarding the Project and the PFS are, unless expressly stated otherwise, presented on a 100% of Project basis.
Tawana, through its 100% owned subsidiary Lithco No. 2 Pty Ltd, has earned a right to 50% of all lithium minerals from the tenements comprising the Project
– refer to announcements of 28 June 2017. Tawana is required to spend $12.5 million in capital expenditure for upgrading and converting the existing plant
on the Bald Hill tenements for processing ore derived from the Project, infrastructure costs, pre-stripping activities and other expenditures including
operating costs by 31 December 2019. Upon completion of such capital expenditure commitment, Tawana (through Lithco No.2 Pty Ltd) will be entitled to
a 50% interest in the Project comprising the Bald Hill tenements, the processing plant and infrastructure at Bald Hill, and all minerals from the Bald Hill
tenements under the terms of the Bald Hill Joint Venture Agreement (which will only take effect upon satisfaction of the capital expenditure obligation).
Refer to announcements of 24 February 2017.
- Infill drilling on the current additional Inferred Resources of 8.2Mt at 1.14%C Li2O is expected to add significantly to
the life of the Project. Extensional drilling also is continuing to grow the total mineralised pegmatite footprint
which has expanded laterally by about 40% since the Resource Estimate. Bald Hill Project (TAW 50% of
Lithium Rights, earning 50% of the Project)A
Tawana Resources NL (“Tawana” or the “Company”) is pleased to advise the results of the Pre-Feasibility
Study (“PFS”) on the Bald Hill Lithium-Tantalite Project (Project), located south east of Kambalda,
Western Australia. The Project is set to become a low-cost producer of high-quality spodumene (Lithium)
concentrates in Q1 2018.
The PFS was completed by Tawana with the assistance of a group of highly experienced consultants and
contractors. In particular, the DMS plant capital and operating costs (including maintenance) were
compiled by Primero Group (Primero). Subsequent to the PFS level estimate, Primero has provided Tawana
and its Joint Venture Partner, Alliance Mineral Assets Limited (together the Joint Venture Parties) with a
fixed price lump sum commitment (which is now included in the PFS) to build the DMS plant which has
given the Joint Venture Parties certainty on the capital estimate. Primero have recently commissioned a
DMS lithium plant in Western Australia and are currently involved in several significant lithium projects
globally.
All figures throughout this announcement regarding the Project and the PFS are, unless expressly stated to
the contrary, are presented on a 100% of Project basis. All production targets and financial information
based on production targets, are supported exclusively by the ore reserves discussed below under the
heading “Mining / Reserves”.
Tawana, through its 100% owned subsidiary Lithco No. 2 Pty Ltd, has earned a right to 50% of all lithium
minerals from the tenements comprising the Project, with a right to farm in to 50% of the Project (including
tenements, plant and all minerals) through a further A$12.5M of capital expenditureA. Tawana has
sufficient funds to meet this earn in requirement.
The PFS for the Project, being the initial “starter pit”, contemplates a net cash flow before tax of $223
million before tax and a net present value (@ 10% discount rate) of $150 million with an internal rate of
return of 185%. The payback period is rapid at approximately 12 months. The NPV is expected to increase
significantly as additional ore Reserves are defined.
Average concentrate cash costs (net of tantalum pentoxide by-product credits) are A$508/t (US$381/t).
Net cash costs are expected to reduce to under A$400/t if an allowance is made for mining and crushing
of stockpiled screened fines and middling concentrates containing about 25% of mined lithium were to be
processed. The fines and middlings are likely to be treated via a floatation circuit (LFC), however test
work is incomplete and the LFC was excluded to reduce initial construction time and cost.
The capital cost estimate to construct a new 1.2Mtpa DMS plant, upgrades to the existing tantalum plant
and infrastructure at the Bald Hill site, including all direct costs is approximately A$42 million (+/- 5% to
15%). This estimate includes a contingency of 10% and excludes pre-production operating costs. The
financial model has assumed pre-production costs as highlighted in the capital section of the
announcement.
Tawana Managing Director Mark Calderwood stated:
“The results show an impressive IRR and payback period. Given we have a modest sized ‘brown-fields’
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.
“We are keeping to our strategy of fast tracking lithium production to take advantage of the strong near-
term demand whilst minimising dilution to our shareholders. Given our spodumene recovers so well
through the DMS, and produces a high-grade concentrate, the two-phase production approach of getting
the DMS commissioned in 2018 and then look to construct a LFC out of cash flow has assisted in the Bald
Hill Project being one of Australia’s lowest upfront capital cost, stand-alone lithium projects.
“It is exciting to be involved with the Project and the economics have highlighted attractive returns.
Drilling is also continuing on infilling the current 8Mt Inferred Resource area with a view to converting
the bulk of this into Reserves and to increase the mine life to 10 years.
“There is significant exploration upside potential at Bald Hill. 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.”
The Bald Hill Mine is located in the southeast of the Goldfields-Esperance Region of Western Australia,
approximately 105 km south southeast of Kalgoorlie, and about 56km east of Widgiemooltha. The main hub
in the region providing access to the Project is Kalgoorlie, which can be accessed by air, rail and road from
Perth.
The principal road access to the Project is via the (sealed) Coolgardie-Esperance Highway (National
Highway 94), and then the Binneringie Road from Widgiemooltha, a distance of 65 km of unsealed shire
road. The Project is located approximately 350km by road from the port of Esperance.
The Project will consist of open pit mines, a Dense Media Separation Process Plant, tailings dam, waste
rock dumps, water harvest and storage dams, stores, camp including administrative and living quarters and
associated infrastructure.
Lithium concentrate will be hauled via Binneringie Road to the Port of Esperance. Tantalite concentrate
will be packed into 205L drums, sealed and exported via Fremantle in standard shipping containers.
Tawana has signed an offtake agreement with a fixed price for two years of US$880/t (A$1,173) (FOB
Esperance) for 6% Li2O concentrates. The offtake agreement provides for an attractive fixed price in US
dollars per dry metric tonne for the first 2 years of production and shipping costs are borne by the offtake
party. Refer to Tawana’s ASX announcement of 26 April 2017.
Financial Evaluation
The key commercial results of the PFS are presented below (on a 100% of Project basis).
Table 1: Key Parameters from the PFS Financial Model
Summary of Key Parameters from PFS “Starter Pit” Financial Model
Life of Mine (LOM) Years 3.6
LOM Ore Mined (lithium) Mt 4.3
LOM Ore Mined (tantalum) Mt 1.4
LOM Waste Mined Mt 51.5
LOM Strip Ratio (waste:ore) 9:1
Plant Feed Rate (lithium) tpa 1,200,000
Plant Feed Rate (tantalum) tpa 320,000
Average Lithium Ore Head Grade % Li2O 1.18%
Average Lithium Recovery % 65.8%
Average Spodumene Concentrate Production tpa 155,000 (@6% Li2O)
Average Tantalite Pentoxide Production lbs Ta2O5 pa 260,000
Average Tantalum Pentoxide Recovered Grade Ta2O5 25%
Tantalite Forecast Price US$/lb FOB 60
Forecast FX rate AUD/USD 0.75
Initial capital cost (including 10% contingency) A$M 42.21
Offtake Prepayment3 A$M $25m, received in three instalments being
15 April 2017 ($A7.5m), 15 July 2017
($8.75m) and 15 September 2017 (A$8.75m).
Repayment of Offtake Prepayment A$M $25m, 20% of sales until full amount repaid.
Sustaining Capital A$M $6.12
Average LOM Operating Costs (Real$) A$t product 641
Average Operating costs (after tantalite credits) A$/t product 508
Average Annual EBITDA A$M 83.1
NPV (10% Discount Rate, Before Tax) A$M 150.2
IRR % 185.03
Payback Months 12
1. Pre-production capital costs exclude pre-production operating costs. They are expected to be between A$10M and A$22M depending on
the financing terms with key contractors (mining and crushing). The financial model has included the upper limit of this range and
includes a 10% contingency.
2. Includes a new tailings dam after production has commenced and $1.0m per year for general sustaining capital. Plant sustaining costs
including in process operating costs.
3. Binding Prepayment and Offtake Agreement. Refer to ASX announcement on 26 April 2017.
Capital Cost Estimates
The capital cost estimate to construct a new 1.2Mtpa Dense Media Separation plant, refurbish the existing
tantalum plant and infrastructure at the Bald Hill site, including all direct costs, is approximately A$42.2
million. This estimate includes a contingency of 10%.
The capital costs are shown in Table 2 and were estimated as follows:
Table 2- Capital Costs Estimates
Capital Item Value - A$M Source/Comments
DMS Process Plant $27.0 Primero feasibility study and fixed lump sum.
Non-DMS Infrastructure $9.2 Includes refurbishment of tantalum plant, earthworks, roadworks,
communications, electrical supply, site buildings, first fills, light
vehicles, camp running costs.
Owners Costs $2.0 Project and development team salaries.
Contingency $4.0 10% on DMS process plant, non-DMS infrastructure capital costs and
owners costs.1
TOTAL $42.2
1. Any of the $3M contingency saved under the Primero contract is to the benefit of Primero, excess expenditure under the
contract scope is to be borne by Primero.
Operating Cost Estimates
The estimated LOM cash operating costs ranges between A$172-$624/t year on year (FOB, after tantalite
credits) of concentrate produced. The LOM average cost of production after tantalum credits is
approximately A$508/t concentrate FOB.
In addition, the Company will carry A$117/t of operating costs as fines and middlings. It is anticipated
that a flotation circuit will be built in the future to process these and/or direct shipped to a market in
China.
The Project operating costs utilised in the study base case are shown in Table 3 below. The principal
sources for the operating cost estimates are:
Table 3- Operating Costs Estimate Details
Cost Item Amount Source/Comments
Mining Ore and Waste $3.65/t Mining contractor rates plus drill and blast, grade control and
other costs. Includes mining overheads of $0.24 per tonne
mined for the mining team including flights/camp/support
costs, light vehicles and grade control.
Crusher feeding costs $9.00/plant feed Crushing contractor rates plus on-costs.
Processing (lithium) $14.15/t feed From Primero feasibility study. Assumed a flat rate of feed
irrespective of the feed quality from the mine and the process
flow required. Also includes contract power station.
Processing (tantalum) $5.58/t feed Calculated by Tawana and from previous historical production
records and new first principles.
Product transport and $51/t transported Haulage contractor rates – For transport to Esperance, storage
storage (lithium) and ship loading.
Product transport and $380/t transported Based on historical numbers shipped from Fremantle.
storage (tantalum)
Corporate and Admin 4.66/t processed of From Primero feasibility study and added additional staff
lithium ore or costs/flights/camp/support costs, light vehicles and Lanfranchi
$5.6m pa. camp rental cost.
State royalties are calculated separately from the operating costs and is 5% for both lithium and tantalum
concentrates.
Geology / ResourcesC
CSA Global Pty Ltd (“CSA Global”) was commissioned by Tawana to compile the maiden lithium Mineral
Resource estimate for the Bald Hill Project and update the tantalum Resource.
The Bald Hill Pegmatite Mineral Resource comprises one large, main, sub horizontal pegmatite body,
striking north-south, with a strike length of 1,070 metres, and a width at its widest point of 775 metres.
This main body is surrounded by several smaller discrete pegmatite bodies, sub-parallel to the main, which
result in a total strike length for the whole resource of 1,245 metres, and a total width of 990 metres. The
Mineral Resource has a total vertical depth of 195 metres, beginning 20 metres below the natural surface
and plunging gently to the south along its entire strike length.
The Mineral Resource was classified as Indicated and Inferred in accordance with the JORC Code (2012
Edition) on a qualitative basis; taking into consideration numerous factors including drillholes spacing,
estimation quality statistics (kriging slope of regression), number of informing samples, average distance
to informing samples in comparison to the semivariogram model ranges, and overall coherence and
continuity of the modelled mineralisation wireframes.
Table 4 | Bald Hill Project, Resources above 0.5% Li2O cut-off
Grade Contained Grade Contained
Resource Tonnes
Li2O Li2O Ta2O5 Ta205
Category (Mt)
% Tonnes ppm (,000) Lbs
Indicated 4.6 1.25 57,100 207 2,200
Inferred 8.2 1.14 94,300 130 2,500
Total 12.8 1.18 151,400 158 4,700
Table 5 | Bald Hill Project, Resources above 0.5% Li2O and 200ppm Ta2O5 cut-offs
Resource Tonnes Grade Contained Grade Contained
Category (Mt) Li2O Li2O Ta2O5 Ta205
% Tonnes ppm (,000) Lbs
Indicated 1.9 1.26 23,700 312 1,300
Inferred 1.4 1.10 15,000 291 900
Total 3.2 1.19 38,700 303 2,100
Note
1) The tantalum resources form part of the lithium/tantalum resources reported in Table 4.
Table 6 |Bald Hill Project, Resources below 0.5% Li2O and above 200ppm Ta2O5 cut-offs
Resource Tonnes Grade Contained
Category (Mt) Ta2O5 Ta205
ppm (,000) Lbs
Indicated 2.8 325 2,000
Inferred 2.9 297 1,900
Total 5.7 311 3,900
Note
1) The tantalum resources reported in Table 6 are additional to those reported in Table 4 and 5.
Mining / Reserves
The lithium and tantalite mineralisation at Bald Hill is amenable to low cost open pit mining for the
proposed 1.2Mtpa of ore to the ROM (Run-of-Mine) pad. It is envisaged that mining of staged open pits will
be performed using a conventional truck/shovel and truck/excavator mining method. The mining method
would include grubbing of vegetation, stockpiling of topsoil, pre-stripping of the overburden, followed by
mining of the mineralisation, and on the completion of mining landform rehabilitation.
Tawana, with the assistance of consultants completed a mining study on the drill-defined mineralisation
covering the Bald Hill Mine prospects. The defined mineralisation comprised a block model of the lithium
and tantalite Mineral ResourceB in the area surrounding the 5 existing open pits, located about 1-2km south-
south-west of the existing processing facilities. The mineralisation is near surface.
To minimise ore loss and dilution, ore was calculated in blocks of shallow bench height of 2.5m, and
oriented down the bedding planes. Waste mining would utilise 5.0-10.0m benches.
The mining sequence will consist of: advance dewatering, grade control drilling and modelling, followed
by survey control, drill and blast, survey control and load and haul operations.
To establish mineable quantities and grades a number of optimisations were completed on the Resource
model completed by CSA Global in June 2017. These results were then analysed with a set of current price
and cost assumptions to determine their respective value and an optimal shell was selected for the study
based on both value and risk.
Using conceptual mine plans a number of mining contractors were requested to provide budgetary pricing
for open pit mining, and these costs were used to build up mining costs included in cost assumptions for
the mining study.
Pit shells were used as stage designs and from these a mine production schedule was completed for the
life of the mine.
Pit optimisations were undertaken by CSA Global using Whittle Four-X pit optimisation software (Whittle).
The block model of the lithium and tantalite ores including the overburden and waste rocks was imported
into Whittle.
A number of optimisations were run and the case selected to be the base Whittle pit optimisation utilised
the indicated lithium and tantalum Mineral Resource. An ultimate pit was designed using only JORC Mineral
Resource Indicated material only to create staged mine Reserves for the mine schedule.
The mine schedule was completed using Maptek Evolution scheduling software after importing the updated
resource model from Vulcan. Using a cutoff grade of 0.39% Li2O for Indicated material only and iterations
of the mining schedule were run to maximise early grade while minimising waste movement.
Table 7: Bald Hill Project, Reserves above 0.39% Li2O
Reserve Tonnes Grade Contained Grade Contained
Category (Mt) Li2O Li2O Ta2O5 Ta205
% Tonnes ppm (,000) Lbs
Proven - - - - -
Probable 4.3 1.18 50,800 208 2,000
Total 4.3 1.18 50,800 208 2,000
Notes
1) Allows for mining ore loss of 5% and dilution of 5%
Table 8: Bald Hill Project, Reserves below 0.39% Li2O and above 200ppm Ta2O5 cut-offs
Reserve Tonnes Grade Contained Grade Contained
Category (Mt) Li2O Li2O Ta2O5 Ta205
% Tonnes ppm (,000) Lbs
Proven - - - - -
Probable 1.4 0.21 3,000 317 1,000
Total 1.4 0.21 3,000 317 1,000
Notes
1) Allows for mining ore loss of 5% and dilution of 5%
2) Reserves contained in Table 7 are additional to those reported in Table 8.
The production targets and forecast financial information outlined in this announcement are based solely
on the Reserves in Tables 7 and 8 above.
Processing
Lithium
Primero Group Pty Limited (Primero) completed a feasibility study on the lithium processing capital and
operating costs for the Project. The Study was required to establish the capital cost of the Project (now
fixed lump sum price) and an expected process and maintenance operating cost to an accuracy of +/-25%.
It was agreed that the project should be advanced in two separate phases. The first phase of development
is intended to fastrack the Project to achieve lithium production by the first quarter of 2018. Phase 1 works
involve the design and construction of a 1.2Mtpa front end spodumene concentrator utilising dense medium
separation to produce a coarse (+1mm) spodumene concentrate of 6.0% Li2O.
The -1mm fines material from this new concentrator will be stockpiled for future processing. All (+1mm)
Secondary DMS floats (Middlings) material will be stockpiled for future consideration during the Phase 2
development.
Phase 2 of the development is the inclusion of a milling and processing circuit. This phase 2 will be finalised
following the completion of test work, but the layout of Phase 1 has allowed for the Phase 2 circuits. Note
that the PFS is based on Phase 1 only.
A contract crushing operation will produce P100 = 10mm crushed ore to be fed to the processing plant. The
existing tantalum concentrate spirals and tables plant will be fed with separate high tantalite bearing ore.
The spodumene concentrate DMS circuit is fed at 161tph to a wet screen that removes - 1mm material
which is sent to storage after removal of portion of the tantalum minerals through rougher spirals. The -
10+1mm material continues to the DMS Feed Prep Screen coarse side which separates the feed to a -
10+5mm (coarse fraction) and -5+1mm (fines fraction). The coarse fraction is mixed with Ferrosilicon (FeSi)
medium and pumped to the Primary Coarse DMS Cyclone.
The fines fraction is pumped to a reflux classifier where mica is removed, dewatered and sent to rejects.
The fines fraction is pumped back to the Feed Prep Screen (fine side). The fines material is mixed with
FeSi and pumped to the Primary Fine DMS Cyclone. The Primary DMS cyclone underflow (coarse and fines)
are sent to the Sinks Drain & Rinse Screen (split) where FeSi is recovered. The Primary DMS cyclone overflow
(coarse and fines) are combined on the Floats Drain & Rinse Screen, FeSi is recovered and floats sent to
rejects loadout. The coarse and fine ore are mixed with a higher SG FeSi and pumped to respective
Secondary Coarse and Fine DMS Cyclones.
The Secondary DMS cyclone underflow (coarse and fines combined) is sent to the combined Drain & Rinse
Screen (Sinks & Floats split) where the sinks from the main spodumene concentrate product after FeSi
removal, is recovered. The Secondary fines DMS cyclone overflow is sent to a separate Drain & Rinse Screen
(middlings) for future processing. The Secondary coarse cyclone-overflow is sent to a small rolls mill for
grinding to 3.35mm and fed back to the primary 1mm wet screen with the primary feed.
Due to the low concentration of iron and mica in the concentrates, no allowance has been made for the
removal of deleterious elements.
Table 9: Key Process Design Criteria
Parameter Units Value Ref
tpa 1,200,000 Lithco/Tawana
Wet Plant Nominal Feed tph 161.2 Calculated
Wet Plant Operating Hours per year hr 7,446 Calculated
Wet Plant Utilisation % 85.0 Calculated
Spodumene Ore Head Grade %Li2O 1.41 Test work
Tantalum Ore Head Grade %Ta2O5 0.023 Test work
Spodumene Product Grade %Li2O 6.0 Test work
Wet Plant Feed F100 mm 10.0 Lithco/Tawana
Wet Plant Feed F80 mm 8.3 Test work
Spodumene Product tpa 153,417 Calculated
Spodumene Mass Yield (as % of plant feed) %w/w 12.75 Calculated
The Lithium Circuit is designed to be feed at 1.2mtpa however only about 940,000t of the feed passes
through the DMS cyclone units, about 190,000t of -1mm is screened out and stockpiled for likely future
processing and 70,000 of slimes and mica is sent to tailings.
Tantalum
After crushing to P100 passing 10mm, tantalum only ore will feed the existing 320,000tpa Tantalum
Processing Facility (TPF). The TPF ore will feed to a 1.4mm primary screen with screen oversize
recirculated through a VSI crusher. Screen undersize is feed to a three-stage spiral circuit, gravity
concentrates are then feed to a dedicated cleaner spiral circuit followed by Wilfley tables. Spiral tails are
pumped to the TSF. The Wilfley tables and if required electromagnets will be used to produce 25% Ta205
concentrates to be drummed for export. Table tails will be added to Lithium Fines Circuit stockpiles
subject to lithium grades.
The -1mm fines from the lithium circuit after de-sliming will be passed over rougher spirals to remove a
medium grade tantalum concentrate. The rougher spiral tails will be pumped and dewatered to stockpile
for future treatment through the LFC. The rougher concentrate will be fed to the TPF.
Metallurgical Testwork
Lithium
The metallurgical programs were supervised by Noel O’Brien of Trinol Pty Ltd, and the test work was
conducted at the Nagrom mineral processing laboratories located in Perth, Western Australia.
Following on from the excellent results obtained from the variability test work (refer ASX announcement
on 13 February and SGX announcement on 12 February 2017), larger scale tests were done on a 160kg
composite of core used in the variability tests.D
The sample was crushed to 10mm and screened at 1mm. The -1mm fines have been retained for later
testing. The +1mm fraction was further screened at 5.6 mm to assist the DMS gravity processing. The -
5.6+1mm fraction was processed in a reflux classifier to remove mica, and then both -10+5.6mm and -
5.6+1mm fractions were processed in a 100mm DMS cyclone.
The results of this phase of the test work were:
Table 10: Feed Composition
Feed Mass Yield % Cont. Li
-1mm screened out after 10mm crushing 17 14.7%
Mica/gangue minerals removed in reflux classifier 5 1.5%
Composite treated through DMS 78 83.8%
Head grade of composite 1.41% Li2O
These results demonstrated that the amount of fines produced was limited to 17% by coarse crushing at
10mm and that over 80% of the contained lithium was available for processing via the cheaper gravity DMS
route.
The results obtained from DMS processing were:
Table 11: Coarse fraction (-10+5.6mm) at SG 2.8 (55% of DMS feed)
Fraction % Mass Yield % Li2O % Cont. Li % Fe2O3
SG 2.8 Sinks 17 6.30 78.9 0.76
SG 2.8 Floats 12 2.56 13.3 0.56
SG 2.7 Floats 71 0.16 7.8 0.29
Table 12: Finer fraction (-5.6+1mm) at SG 2.9(mica removed) (45% of DMS feed)
Fraction % Mass Yield % Li2O % Cont. Li % Fe2O3
SG 2.9 Sinks 16 6.55 73.4 0.90
SG 2.9 Floats 21 1.53 21.8 0.57
SG 2.7 Floats 63 0.11 4.9 0.33
These results highlighted two key characteristics of the Bald Hill mineralisation:
- The ability to produce grades well in excess of 6% Li2O at good mass yields with acceptably low iron
content.
- The ability to reject 60-70% of the feed mass after a first pass DMS, thus reducing processing costs
appreciably.
Initially a product grade of over 7% Li2O was obtained in the coarser fraction using a density of 2.9 and,
whereas this was an excellent result, it was generally significantly above market requirements. Hence a
lower cut density of 2.8 was adopted to increase the mass yield. This resulted in a mass yield of 17% at a
grade of 6.3% Li2O at SG 2.8.
The middlings fraction, from the coarse DMS, or 2.8 floats, still had a grade of 2.56% Li2O and a further
test was done by re-crushing this to 3.35 mm to determine additional DMS recovery. This test resulted in
a further mass yield of 4% at a grade of 6.14% Li2O to the sinks.
Based on these results the PFS used the following key metallurgical factors:
DMS circuit
- Total feed - 1,200,000tpa
- Feed to DMS cyclones - 937,000tpa
- -1mm Fines from wet screening after desliming - 17.8% mass 16.4% of contained lithium
- Primary concentrates - 65.8% of contained lithium in total feed or 84.3% of lithium in feed to DMS
cyclones
- Middlings - 10.3% of contained lithium in total feed of 13.2% of lithium in feed to DMS cyclones
- Tantalum recovery to concentrates from -1mm Fines 16.2% of contained tantalum in total feed
Tantalum
There has been significant prior test work undertaken for the tantalum ore, however it was considered
appropriate to use actual Haddington throughput and recoveries based on the current TPF arrangement.
The plant originally had a ball mill to re-grind a portion of the feed prior to scavenger spirals, however in
practice it was found that there was little commercial benefit to run the ball mill and it was subsequently
removed from the circuit. The existing VSI crusher at circa 500% recycle can produce 330,000 tpa of -
1.4mm feed to the spiral circuit. Recoveries over the last two years through the spiral circuit were about
68% at an ore feed of 80,000t/qtr to 85,000t/qtr, which produced a concentrate grade of about 14% Ta2O5
prior to tabling. Given that tantalum feed grades are expected to be lower than during the Haddington
era, a reduced 65% recovery was used.
Table 13: Haddington 2004-2005 Production on a Quarterly Basis
Ore tantalum Recovered Calc. Stated
Quarter treated Head pentoxide grade Rec. Rec. concentrate con grade
pounds
t ppm rec. ppm Ta2O5 % % t % Ta205
Mar-04 84,639 421 56,379 297 71 71.5 262 14.4
Jun-04 87,071 431 54,844 281 65 66.6 308 12.6
Sep-04 80,580 437 53,732 298 68 69.1 298 12.1
Dec-04 80,117 405 51,110 285 70 73 252 14.2
Mar-05 76,200 424 49,570 290 68 70 239 14.2
Jun-05 81,456 443 50,475 277 62 67 220 16.5
Sep-05 93,614 470 66,453 317 67 68 265 15.8
Dec-05 71,718 408 44,854 279 68 69 77 41.6
It has been proposed that the -1mm fines from the lithium circuit be treated in a separate spiral plant to
recover tantalum prior to stockpiling for future grinding and flotation (or another method) to recover
spodumene.
-1mm fines from the 150kg bulk sample were tabled after desliming. This work simulates rougher spiral
performance and these results show that 14.6% of the total contained tantalum could be recovered from
the -1mm lithium fines. A further 4.6% could be recovered from the fines generated after re-crushing the
coarse DMS middlings, bringing the total recovery of tantalum on rougher spirals to a possible 19.1%.
This rougher concentrate would require further upgrade by tabling and magnetic separation. This work has
not been done yet, but it is expected that a further 15% losses would be incurred in these clean-up
operations.
Infrastructure
The Mine is located in the Goldfields region of Western Australia where good infrastructure is available
for mining projects.
A sealed highway and unsealed public road with RAV-7 approval provides access from the port of Esperance
to within 1.8km of the plant site where existing private access road will require minimal upgrading for the
increased traffic load.
Process water requirements for processing can be serviced from water resources within the mine area, as
per the existing water Permits. Potable water will transported to site until the new Mine camp is
constructed.
Power will be produced on site using diesel generators on a rental basis.
The site will operate on a fly-in fly-out basis to Kalgoorlie or Kambalda with a village constructed to house
operations personnel whilst on site. During construction and operations a combination of the existing
village and a leased neighbouring village will be used.
Additional offices and storage shed will be constructed and an upgrade to the existing laboratory
completed.
A new fuel storage facility will be constructed.
Logistics and Port
The lithium concentrate will be hauled via Binneringie Road to the Port of Esperance.
3 Trucks will depart from an Esperance depot and storage facility and will be able to complete 1 cycle per
12-hour shift or 2 cycles per day.
Tantalite concentrate will be packed into 205 L drums, sealed and exported via Fremantle in standard
shipping containers.
The Port of Esperance (the Port) is under the management of Southern Ports Authority and is the ocean-
borne export and import hub for the south-eastern corner of Western Australia. Besides mineral exports,
such as lithium, nickel and iron ore products and concentrates, it handles woodchip, agricultural,
hydrocarbon and industrial produce and materials.
It is anticipated that bulk haulage will be from the Bald Hill mine to a storage shed at Esperance, not at
the port, or full containers would be stored at the Esperance port after being loaded on site. During ship
loading Rotabox/Rotainer containers will be ferried back and forth to the ship loading crane from an off
port bulk storage site or from the full container stack at the port.
Sales/Marketing/ Pricing
Lithium
The Company has a binding offtake agreement for the supply of lithium concentrate from the Bald Hill
Project in Western Australia over an approximate initial five-year term.
The key terms of the offtake agreement are as follows(refer further to the Company’s ASX announcement
of 26 April 2017):
- A fixed price for all production for 2018 and 2019 of US$880/t (FOB Esperance) for 6% Li2O with
price adjustment increment/decrement of US$15/t based on grade variation of 0.1%.
- From 2020 to 2023, the sales price and volumes are to be negotiated and agreed based upon
prevailing market conditions at the time.
For the purpose of this feasibility study the following prices have been used from 2020.
Tantalum
The commodity pricing for tantalum is based on a price of US$60/lb (FOB Fremantle) for +25% Ta2O5. The
assumed spot price is $55/lb and a premium (based on historical sales from Bald Hill) of US$5/lb has been
assumed due to the low radiation and past sales history from the Bald Hill Mine.
Tenure
All mining and processing activities will be contained on granted Mining Lease M15/400 and eight associated
Miscellaneous Licences L15/264 to L15/270 and L15/348 all held 100% by Alliance Mineral Assets Limited
and part of a larger tenement package. M15/400 was granted in 1988 and it 2nd extension of term will
expire 7 September 2030, it pre-dates Native Title and has been the subject of prior mining and production.
Apart from state government royalties, M15/400 is not subject to royalties.
In the later years a Miscellaneous Licence will be required for the extension of waste dumps onto the
current E15/1212 also held 100% by Alliance Minerals Assets Limited.
Environmental Review, Project Approvals and Heritage
To reinstate mining operations at the Bald Hill Mine, a series of permits are required. The most important
of these include:
Department of Environmental Regulation (DER) - Licence Amendment
Since Bald Hill already has an Environmental operating Licence (for tantalum mining and processing) there
is not a requirement to go through a lengthy approval process. And, since the nature of the proposed
lithium mining and processing also fits with the current licence scope, there is also not a requirement for
a works approval. Thus an application has been submitted for an amendment to the existing operating
licence.
Due to the increased throughput, a new Tails Storage Facility (TSF) will be required once the approved TSF
is full, this will require a separate approval at a later date.
Department of Mines and Petroleum (DMP) – Environmental Branch Mining Proposal
The Bald Hill site already has an approved mining proposal for tantalum mining and processing, issued by
the Environmental branch of the DMP. An updated application was submitted which has now been
approved. The updated mining proposal includes the new DMS plant and all the new infrastructure required
to operate the Lithium project, excluding then final Pit design.
The final pit design is not required to commence lithium mining and processing on site.
When the final pit design is determined another submission will be made to include the new pits etc. in
the mining proposal, and the final mine closure plan will also be submitted.
Department of Mines and Petroleum (DMP) Environmental Branch -Clearing of native vegetation
Bald Hill already has a clearing permit for its tantalum mining and processing. A new application will be
made for any works to be undertaken outside the current approved clearing area.
Department of Mines and Petroleum (DMP) Safety Branch - Project Management Plan (PMP)
The current approved PMP (for tantalum mining and processing) has been updated and resubmitted and
has been approved. The updated PMP now includes all Construction activities planned for site. A further
update of the PMP to cover the recommencement of mining operations will be submitted once the Mining
and Crushing contractors are identified.
Project Delivery Schedule
The key milestone dates are as follows:
Table 15: Project Delivery Timeline
Construction mobilisation June 2017
Construction commencement July 2017
Mining mobilisation October 2017
Mining commencement November 2017
Crushing mobilisation December 2017
Crushing commencement January 2018
Ore commissioning February 2018
Study Team
The PFS was completed by Tawana with the assistance of a group of highly experienced consultants and
contractors. The main areas of focus and responsible contributors are detailed below:
- Primero Group Lithium Process Plant Design, Capital and Operating Cost
- Lithium Metallurgical Work Nagrom and Trinol Pty Ltd
- Mining Study Marcus Jacobs and Mark Gell
- Logistics GDC Services Pty Ltd
- Geotechnical Dempers & Seymour Pty Ltd
- Tailings Storage Facility Klohn Crippen Berger Ltd
- Environmental Studies Ecotech (WA) Pty Ltd
- Resource Estimation CSA Global Pty Ltd
Opportunities For Growth
Several opportunities for increasing production rates and the mine life;
- Flotation test work to date shows potential for significant lithium recoveries from the -1mm Fines
and DMS middlings stockpiles which will contain about 25% of mined lithium. Additional
optimisation test work is being undertaken prior to further engineering. If constructed the LFC will
have a very low unit cost due to the fact that mining and crushing costs have been carried by the
DMS concentrate operating costs and the fact that its incremental production requiring limited
additional manning and overheads. The lithium fines circuit throughput would be in the order of
350,000tpa to 600,000tpa subject to allowances for potential increases to DMS throughput.
- The test work done on the composite sample and the 5 tonne bulk sample showed a significant
tantalum content within the -5.6mm DMS concentrate. A jig test was done on the larger sample
showed a significant portion of the contained tantalum could be recovered to concentrate. Further
work is required to optimise the extraction of the tantalum without impacting lithium recoveries
to primary concentrates.
- Infill drilling on the current additional Inferred Resources of 8.2Mt at 1.14% Li2O is expected to add
significantly to the mine life based on scoping optimisations on both Indicated and Inferred
Resources.
- Mining currently accounts for more than 50% of cash costs. It is likely that larger mining equipment
will be selected for bulk waste mining and when final pit limits are determined in pit waste rock
disposal into earlier pit stages will be adopted to reduce haul distances. Larger equipment and in
pit waste disposal is expected to reduce unit mining unit costs.
- Extensional drilling is continuing to expand the known mineralised pegmatite footprint and the
exploration potential is significant.
Financing
Tawana has sufficient funds available to meet the requirements of the first A$12.5m of capital. In addition:
- Tawana and its joint venture partner AMAL have secured a A$25m prepayment (refer ASX
announcement on 26 April 2017), of which $7.5m has been received to date.
- The remaining capital is modest and is shared 50% each amongst Tawana and AMAL. Tawana’s board
believes funding requirements for the Project are modest in relation to the Company's current
market capitalisation.
- The funding requirements for the Project are low and the payback is rapid.
- Tawana is already in early stage discussions with many potential financiers, the details of which
will be disclosed when financing has been agreed and as required by applicable exchange and
securities laws. No binding agreements for funding have been signed to date.
- Tawana’s board has relevant experience in financing projects and further is finalising the services
of an advisor to assist the Company to arrange project finance. The advisor worked for more than
15 years with Macquarie Bank and is experienced in initiating and leading equity, quasi-equity,
project finance for a broad range of resource projects.
- The production and economic outcomes delivered in the PFS are sufficiently robust to provide
confidence in the Company’s ability to fund development of the Project through debt and/or equity
financing.
The Tawana Board believes that there are reasonable grounds that future funding will be available for
the ongoing development of the Project, as envisaged in this announcement
The Tawana Board cannot make any warranties or representations relating to any impediments in
relation to the Joint VentureA, its formation and AMAL’s funding capability.
Competent Persons Statement
Exploration
The information in this announcement that relates to Exploration Results is based on and fairly represents information and supporting
documentation compiled by Mr Mark Calderwood, who is an employee of Tawana Resources NL (“Tawana”). Mr Calderwood is a member
of The Australasian Institute of Mining and Metallurgy. Mr Calderwood has sufficient experience relevant to the style of mineralisation
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the
“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Calderwood consents to the inclusion
in this report of the matters based on his information in the form and context in which it appears.
Mr Calderwood is a significant shareholder in Tawana. Mr Calderwood and Tawana do not consider these to constitute a potential conflict
of interest to his role as Competent Person. Mr Calderwood is not aware of any other relationship with Tawana which could constitute a
potential for a conflict of interest.
Reserves
The information in this announcement that relates to Ore Reserves is based on and fairly represents information and supporting
documentation compiled by Mr Mark Gell, a Competent Person who is a is a member of The Australasian Institute of Mining and Metallurgy.
Mr Gell is a full-time employee of Tawana Resources NL (“Tawana”).
Mr Gell has sufficient experience that is relevant to the type of deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr Gell consents to the inclusion in this report of the matters based on his information in the form and
context in which it appears.
Mr Gell is an employee of Tawana. Mr Gell is not aware of any other relationship with Tawana which could constitute a potential for a
conflict of interest.
Metallurgical
The information in this release that relates to metallurgy and metallurgical test work has been reviewed by Mr Noel O’Brien, FAusIMM,
MBA, B. Met Eng. Mr O’Brien is not an employee of the company, but is employed as a contract consultant. Mr O’Brien is a Fellow of the
Australasian Institute of Mining and Metallurgy, and he has sufficient experience with the style of processing response and type of deposit
under consideration, and to the activities undertaken, to qualify as a competent person as defined in the 2012 edition of the “Australian
Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr O’Brien consents to the inclusion in this report
of the contained technical information in the form and context as it appears.
Forward Looking Statement
This report may contain certain forward looking statements and projections regarding estimated, resources and reserves; planned
production and operating costs profiles; planned capital requirements; and planned strategies and corporate objectives. Such forward
looking statements/projections are estimates for discussion purposes only and should not be relied upon as representation or warranty,
express or implied, of Tawana Resources NL and/or Alliance Mineral Assets Limited. They are not guarantees of future performance and
involve known and unknown risks, uncertainties and other factors many of which are beyond the control of Tawana Resources NL and/or
Alliance Mineral Assets Limited. The forward looking statements/projections are inherently uncertain and may therefore differ materially
from results ultimately achieved.
Tawana Resources NL and/or Alliance Mineral Assets Limited does not make any representations and provides no warranties concerning
the accuracy of the projections, and disclaims any obligation to update or revise any forward looking statements/projects based on new
information, future events or otherwise except to the extent required by applicable laws. While the information contained in this report
has been prepared in good faith, neither Tawana Resources NL and/or Alliance Mineral Assets Limited or any of their directors, officers,
agents, employees or advisors give any representation or warranty, express or implied, as to the fairness, accuracy, completeness or
correctness of the information, opinions and conclusions contained in this presentation. Accordingly, to the maximum extent permitted
by law, none of Tawana Resources NL and/or Alliance Mineral Assets Limited, their directors, employees or agents, advisers, nor any
other person accepts any liability whether direct or indirect, express or limited, contractual, tortuous, statutory or otherwise, in respect
of, the accuracy or completeness of the information or for any of the opinions contained in this announcement or for any errors, omissions
or misstatements or for any loss, howsoever arising, from the use of this announcement.
ENDNOTES
A. Through Tawana’s 100% owned subsidiary Lithco No. 2 Pty Ltd (Lithco), Tawana entered into a Farm-In Agreement on 23 February 2017
with AMAL with respect to the Bald Hill Project for the purpose of joint exploration and exploitation of lithium and other minerals. In
May 2017, Tawana earned its 50% rights to all lithium minerals from the tenements comprising the Project, and Tawana and AMAL are
now governed by the Lithium Rights Joint Venture Agreement which was entered into on 10 April 2017.
Tawana is required to spend $12.5 million in capital expenditure for upgrading and converting the existing plant on the Bald Hill
tenements for processing ore derived from the Project, infrastructure costs, pre-stripping activities and other expenditures including
operating costs (Capital Expenditure) by 31 December 2019.
Upon completion of the Capital Expenditure, Tawana (through Lithco) will be entitled to a 50% interest in the Project (being all
minerals from the tenements and the processing plant and infrastructure at Bald Hill). The portfolio of mineral tenements, comprising
mining leases, exploration licences, prospecting licences, miscellaneous licences, a general-purpose lease, and a retention lease are in
good standing.
AMAL and Lithco entered into the Bald Hill Joint Venture Agreement (“Bald Hill JVA”) on 18 April 2017. The Bald Hill JVA has not come
into effect as at the date of this announcement, but will take effect upon completion of the Capital Expendtiure.
Tawana raised $15 million before costs, in May 2017, in order to fund its $12.5 million Capital Expenditure commitment to earn its 50%
interest in the Project.
B. C1 cash costs as set by Wood Mackensie Co which includes all production costs, administration and transport to Esperance port.
C. For more information on the Resource estimate, refer to ASX announcement dated 14 June 2017. Tawana is not aware of any new
information or data that materially affects the information included in the said announcement.
D. Refer metallurgical test work ASX Announcement on 7 April 2017.
11 July 2017
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
APPENDIX
JORC Table 1
Mineral Resources JORC Reporting:
Section 1 Sampling Techniques and Data
Criteria JORC Code Explanation Commentary
Sampling Nature and quality of sampling (e.g. cut channels, Drilling consists of ~98% reverse circulation (RC), RC with
techniques random chips, or specific specialised industry diamond core tails (RCD) and diamond drilling (DD) for a
standard measurement tools appropriate to the total 728 holes for 63,539.2m of drilling in the Bald Hill
minerals under investigation, such as down hole project database. The Bald Hill Mineral Resource is based
gamma sondes, or handheld XRF instruments, on assay data from 460 RC holes, 9 RCD holes and 3 DD
etc.). These examples should not be taken as holes.
limiting the broad meaning of sampling.
RC cuttings were continuously sampled at 1m intervals
through all pegmatite intercepts including 2m of waste
above and below each intercept.
DD core is typically continuously sampled at 2m intervals
through pegmatite intercepts. Where required by
changes in lithology, mineralization, or alteration, core
samples may be shorter or longer than the typical 2m.
Include reference to measures taken to ensure The majority of drill hole collars are accurately surveyed
sample representivity and the appropriate using RTK DGPS equipment.
calibration of any measurement tools or systems
Drill samples are logged for lithology, weathering,
used.
structure (diamond core), mineralogy, mineralisation,
colour and other features.
Half diamond core was collected and placed in marked
plastic sacks, and shipped to the assay laboratory.
RC samples were collected and placed in marked plastic
bags which were placed in sacks and then shipped to the
assay laboratory.
Aspects of the determination of mineralisation Drill samples were jaw crushed and riffle split to 2-2.5kg
that are Material to the Public Report. In cases for pulverizing to 80% passing 75 microns. Prepared
where ‘industry standard’ work has been done this samples are fused with sodium peroxide and digested in
would be relatively simple (e.g. ‘reverse dilute hydrochloric acid. The resultant solution is
circulation drilling was used to obtain 1 m samples analysed by ICP, by Nagrom Laboratory in Perth.
from which 3 kg was pulverised to produce a 30 g
The assay technique is considered to be robust as the
charge for fire assay’). In other cases more
method used offers total dissolution of the sample and is
explanation may be required, such as where there
useful for mineral matrices that may resist acid
is coarse gold that has inherent sampling
digestions.
problems. Unusual commodities or mineralisation
types (e.g. submarine nodules) may warrant
disclosure of detailed information.
Drilling Drill type (e.g. core, reverse circulation, open- RC was drilled using 4.5-inch (140 mm) rods with a
techniques hole hammer, rotary air blast, auger, Bangka, nominal 5.9-inch (150 mm) diameter hole. Diamond core
sonic, etc.) and details (e.g. core diameter, triple used either PQ, NQ2 or HQ3 diameter core. Core was
or standard tube, depth of diamond tails, face- oriented where possible.
sampling bit or other type, whether core is
All DD holes and ~98% of RC drill holes are angled; the
oriented and if so, by what method, etc.).
remainder were drilled vertically.
Drill sample Method of recording and assessing core and chip Chip recovery or weights for RC drilling were not
recovery sample recoveries and results assessed. recorded. Core recovery is very good through the
mineralised zones and estimated to be greater than 90%.
Criteria JORC Code Explanation Commentary
Measures taken to maximise sample recovery and RC drilling generally utilised an external booster to keep
ensure representative nature of the samples. samples dry and maximising recoveries. The majority of
RC holes are shallow (<150m) with very few wet samples
encountered.
Whether a relationship exists between sample No relationship between grade and recovery has been
recovery and grade and whether sample bias may identified.
have occurred due to preferential loss/gain of
fine/coarse material.
Logging Whether core and chip samples have been Geological logs exist for all drill holes with lithological
geologically and geotechnically logged to a level of codes via an established reference legend.
detail to support appropriate Mineral Resource
Drill samples were logged for lithology, weathering,
estimation, mining studies and metallurgical
structure (diamond core), mineralogy, mineralisation,
studies.
colour and other features. Logging and sampling has been
carried out to “industry norms” to a level sufficient to
support the Mineral Resource estimate.
Whether logging is qualitative or quantitative in Drill holes have been geologically logged in their
nature. Core (or costean, channel, etc.) entirety. Where logging was detailed, the subjective
photography. indications of spodumene content were estimated and
recorded.
The total length and percentage of the relevant All drill holes are logged in full, from start to finish of the
intersections logged. hole.
Sub-sampling If core, whether cut or sawn and whether quarter, Where sampled, core is cut in half onsite using an
techniques half or all core taken. industry standard core saw, to produce two identical
and sample halves.
preparation
If non-core, whether riffled, tube sampled, rotary Dry RC samples were collected at 1m intervals and riffle
split, etc. and whether sampled wet or dry. or cone split on-site to produce a subsample less than
5kg.
For all sample types, the nature, quality and Sample preparation is according to industry standard,
appropriateness of the sample preparation including oven drying, coarse crush, and pulverisation to
technique. 80% passing 75 microns.
Quality control procedures adopted for all sub- Subsampling is performed during the preparation stage
sampling stages to maximise representivity of according to the assay laboratories’ internal protocol.
samples.
Measures taken to ensure that the sampling is Field duplicates, laboratory standards and laboratory
representative of the in situ material collected, repeats are used to monitor analyses.
including for instance results for field
duplicate/second-half sampling.
Whether sample sizes are appropriate to the grain Sample sizes are considered to be appropriate and
size of the material being sampled. correctly represent the style and type of mineralisation.
Quality of The nature, quality and appropriateness of the The assay technique is considered to be robust as the
assay data and assaying and laboratory procedures used and method used offers total dissolution of the sample and is
laboratory whether the technique is considered partial or useful for mineral matrices that may resist acid
tests total. digestions.
For geophysical tools, spectrometers, handheld None were used.
XRF instruments, etc., the parameters used in
determining the analysis including instrument
make and model, reading times, calibrations
factors applied and their derivation, etc.
Criteria JORC Code Explanation Commentary
Nature of quality control procedures adopted (e.g. Standards and duplicates were submitted in varying
standards, blanks, duplicates, external laboratory frequency throughout the exploration campaign and
checks) and whether acceptable levels of accuracy internal laboratory standards, duplicates and replicates
(i.e. lack of bias) and precision have been are used for verification.
established.
Verification of The verification of significant intersections by Significant intersections have been verified by
sampling and either independent or alternative company alternative TAW personnel and by a CSA Global
assaying personnel. Competent Person (Ralph Porter).
The Ta and Li assays show a marked correlation with the
pegmatite intersections via elevated downhole grades.
The use of twinned holes. Twinning of holes undertaken to date show reasonable
continuity and representivity of the mineralised
intervals.
Documentation of primary data, data entry Drill logs exist for all holes as electronic files and/or
procedures, data verification, data storage hardcopy (all 2017 logging has been input directly to field
(physical and electronic) protocols. logging computers).
Digital log sheets have been created with inbuilt
validations to reduce potential for data entry errors.
All drilling data has been loaded to a database and
validated prior to use.
Discuss any adjustment to assay data. For the Mineral Resource estimate, adjustments were
made to a number of down hole surveys. These
adjustments were made where angled holes were
blocked well before the end of hole, or where down hole
surveys had not yet been undertaken but surveys had
been completed for nearby holes.
Where the drill hole was blocked, the last survey was
copied to the end of hole depth. Where no down hole
survey was completed or the hole was blocked at surface,
the down hole surveys from a nearby hole, drilled by the
same rig (and preferably same driller), was copied and
applied to the hole. Some of these holes may need to be
re-entered, cleaned and surveyed in the future. All
changes were marked as ‘nominal’ in the database.
In all cases, corrections to down hole surveys were
reviewed against surrounding drill holes and pegmatite
intervals to ensure error was minimised.
Location of Accuracy and quality of surveys used to locate drill Prior to drilling, collar coordinates are situated using
data points holes (collar and down-hole surveys), trenches, hand held GPS (considered accurate to within 4m).
mine workings and other locations used in Mineral Following drilling, accurate surveying using RTK DGPS is
Resource estimation. undertaken by trained site personnel.
Hole collars are preserved until completion of down hole
surveying. A significant portion of holes are surveyed
down hole digital instruments dominated by gyro tools.
Specification of the grid system used. Grid used is MGA 94 Zone 51.
Quality and adequacy of topographic control. Topographical survey is generated from detailed airborne
survey with points generated on a 1m by 1m grid. Areas
mined have been defined by final mine surveys.
Criteria JORC Code Explanation Commentary
Data spacing Data spacing for reporting of Exploration Results. Drilling has been conducted on a 40m by 40m grid
and extending to 80m by 80m on the peripheries of the
distribution deposit, with a 140m by 80m area in the northern portion
of the deposit drilled out at 20m by 20m.
Whether the data spacing and distribution is The spacing of holes is considered of sufficient density to
sufficient to establish the degree of geological and provide an ‘Indicated’ or ‘Inferred’ Mineral Resource
grade continuity appropriate for the Mineral estimation and classification under JORC (2012).
Resource and Ore Reserve estimation procedure(s)
and classifications applied.
Whether sample compositing has been applied. There has been no sample compositing.
Orientation of Whether the orientation of sampling achieves Drilling has been angled to achieve the most
data in unbiased sampling of possible structures and the representative intersections through mineralisation.
relation to extent to which this is known, considering the
The majority of drilling is angled. Some vertical holes
geological deposit type.
have been drilled in areas where access is limited or the
structure
pegmatites are interpreted to be flat lying.
If the relationship between the drilling orientation The lithium tantalite-bearing pegmatites are generally
and the orientation of key mineralised structures flat to shallowly dipping in nature. The true width of
is considered to have introduced a sampling bias, pegmatites is generally considered 80-95% of the
this should be assessed and reported if material. intercept width, with minimal opportunity for sample
bias.
Sample The measures taken to ensure sample security. The drill samples are taken from the rig by experienced
security personnel, stored securely and transported to the
laboratory by a registered courier and handed over by
signature.
Audits or The results of any audits or reviews of sampling No audits have been undertaken to date.
reviews techniques and data.
Section 2 Reporting of Exploration Results
Criteria Explanation Commentary
Mineral Type, reference name/number, location and The Bald Hill Resource is situated on Mining lease
tenement and ownership including agreements or material issues M15/400 comprising 501Ha. M 15/400 is 100% owned by
land tenure with third parties such as joint ventures, Australian incorporated, Singapore Exchange listed
status partnerships, overriding royalties, native title Alliance Mineral Assets Limited (AMAL).
interests, historical sites, wilderness or national
The Mining lease are subject to an earn-in agreement
park and environmental settings.
between AMAL and Tawana Resources Limited.
There are no other third-party interests or royalties.
Government royalties are 5% for Lithium or Tantalum
mineral concentrates.
The security of the tenure held at the time of The portfolio of mineral tenements, comprising mining
reporting along with any known impediments to leases, exploration licences, prospecting licences,
obtaining a licence to operate in the area. miscellaneous licences, a general-purpose lease, and a
retention lease are in good standing.
Exploration Acknowledgment and appraisal of exploration by Alluvial tantalite has been mined periodically from the
done by other other parties. early 1970s.
parties
Gwalia Consolidated Limited undertook exploration for
tantalite-bearing pegmatites from 1983-1998. Work
included mapping, costeaning, and several phases of
drilling using RAB, RC, and diamond methods. The work
identified mineral resources that were considered
uneconomic at the time.
Haddington Resources Limited (Haddington) entered
agreement to develop the resource and mining
- commenced in 2001 and continued until 2005.
- Haddington continued with exploration until
2009.
Living Waters acquired the project in 2009 and continued
with limited exploration to the north of the main pit
area.
Geology Deposit type, geological setting and style of The Bald Hill area is underlain by generally north-
mineralisation. striking, steeply dipping Archaean metasediments
(schists and greywackes) and granitoids.
Felsic porphyries and pegmatite sheets and veins have
intruded the Archaean rocks. Generally, the pegmatites
cross cut the regional foliation, occurring as gently
dipping sheets and as steeply dipping veins.
The pegmatites vary in width and are generally
comprised quartz-albite- muscovite-spodumene in
varying amounts. Late-stage albitisation in the central
part of the main outcrop area has resulted in fine-
grained, banded, sugary pegmatites with visible fine-
grained, disseminated tantalite. A thin hornfels
characterised by needle hornblende crystals is often
observed in adjacent country rocks to the pegmatite
intrusives. Tantalite generally occurs as fine
disseminated crystals commonly associated with fine-
grained albite zones, or as coarse crystals associated
with cleavelandite.
Weathering of the pegmatites yields secondary
mineralised accumulations in alluvial/elluvial deposits.
Criteria Explanation Commentary
Drill hole A summary of all information material to the Not Applicable – Not reporting exploration results.
Information understanding of the exploration results including
a tabulation of the following information for all
Material drill holes:
• easting and northing of the drill hole collar
• elevation or RL (Reduced Level – elevation
above sea level in metres) of the drill hole
collar
• dip and azimuth of the hole
• down hole length and interception depth
• hole length.
If the exclusion of this information is justified on Not Applicable – Not reporting exploration results.
the basis that the information is not Material and
this exclusion does not detract from the
understanding of the report, the Competent
Person should clearly explain why this is the case.
Data In reporting Exploration Results, weighting Not Applicable – Not reporting exploration results.
aggregation averaging techniques, maximum and/or minimum
methods grade truncations (e.g. cutting of high grades) and
cut-off grades are usually Material and should be
stated.
Where aggregate intercepts incorporate short Not Applicable – Not reporting exploration results.
lengths of high grade results and longer lengths of
low grade results, the procedure used for such
aggregation should be stated and some typical
examples of such aggregations should be shown in
detail.
The assumptions used for any reporting of metal Not Applicable – Not reporting exploration results.
equivalent values should be clearly stated.
Relationship These relationships are particularly important in Not Applicable – Not reporting exploration results.
between the reporting of Exploration Results.
mineralisation
If the geometry of the mineralisation with respect The majority of drilling is angled. Some vertical holes
widths and
to the drill hole angle is known, its nature should have been drilled in areas where access is limited or the
intercept
be reported. pegmatites are interpreted to be flat lying.
lengths
The lithium tantalite-bearing pegmatites are generally
flat to shallowly dipping in nature. The true width of
pegmatites are generally considered 85-95% of the
intercept width, with minimal opportunity for sample
bias.
If it is not known and only the down hole lengths Not Applicable – Not reporting exploration results.
are reported, there should be a clear statement to
this effect (e.g. ‘down hole length, true width not
known’).
Diagrams Appropriate maps and sections (with scales) and Not Applicable – Not reporting exploration results
tabulations of intercepts should be included for
any significant discovery being reported These
should include, but not be limited to a plan view
of drill hole collar locations and appropriate
sectional views.
Criteria Explanation Commentary
Balanced Where comprehensive reporting of all Exploration Not Applicable – Not reporting exploration results
reporting Results is not practicable, representative
reporting of both low and high grades and/or
widths should be practiced to avoid misleading
reporting of Exploration Results.
Other Other exploration data, if meaningful and The metallurgical test work for spodumene referred to in
substantive material, should be reported including (but not the release was undertaken by Nagrom. Nagrom has
exploration limited to): geological observations; geophysical extensive experience with tantalum and lithium
data survey results; geochemical survey results; bulk extraction testwork and has ISO9001:2008 accreditation.
samples – size and method of treatment; Results have been reported without interpretation.
metallurgical test results; bulk density,
groundwater, geotechnical and rock
characteristics; potential deleterious or
contaminating substances.
Further work The nature and scale of planned further work (e.g. Further RC and diamond drilling is warranted at the
tests for lateral extensions or depth extensions or deposit to explore for additional resources and improve
large-scale step-out drilling). the understanding of the current resources prior to
mining.
Diagrams clearly highlighting the areas of possible Diagrams have been included in the body of this report.
extensions, including the main geological
interpretations and future drilling areas, provided
this information is not commercially sensitive.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in the preceding section also apply to this section)
Criteria Explanation Commentary
Database Measures taken to ensure that data has not been Logging is completed onto templates using standard
integrity corrupted by, for example, transcription or keying logging codes into Toughbook laptops. Analytical results
errors, between its initial collection and its use for are imported directly into the database by a database
Mineral Resource estimation purposes. specialist.
The central database, from which the extract used for
Mineral Resource estimation was taken, is managed by
Tawana. Upon receipt of the extract, CSA Global
validated the database for internal integrity as part of
the import process for modelling in Surpac.
Data validation procedures used. Data were validated for internal database integrity as
part of the import process for use in Surpac. This includes
logical integrity checks for data beyond the hole depth
maximum, and overlapping from-to errors within interval
data. Visual validation checks were also made for
obviously spurious collar or downhole survey values,
collars which were not assigned a proper RL value, and
collars which may lack substantial downhole survey data.
Site visits Comment on any site visits undertaken by the CSA Global Principal Consultant; Ralph Porter has visited
Competent Person and the outcome of those visits. site and reviewed the drilling, sample collection, and
logging data collection procedures, along with
conducting a review of the site geology.
The outcome of the site visits (broadly) were that data
has been collected in a manner that supports reporting a
Mineral Resource estimate in accordance with the JORC
Code, and controls to the mineralisation are well-
understood.
If no site visits have been undertaken indicate why Not Applicable.
this is the case.
Geological Confidence in (or conversely, the uncertainty of ) The geological model developed is based on lithological
interpretation the geological interpretation of the mineral logging of pegmatites within a metasedimentary host,
deposit. with occasional hypabyssal intrusions of dioritic
composition. The deposit geology is very well understood
based on previous mining history and open pit exposures,
and this is reflected in the generally high confidence in
both the mineralisation and geological interpretations.
Nature of the data used and of any assumptions The input data used for geological modelling has been
made. derived from the qualitative and quantitative logging of
lithology, alteration, geochemical composition of
samples returned from RC and DD drilling.
The effect, if any, of alternative interpretations The geological model developed has a solid lithological
on Mineral Resource estimation. basis, and is controlled by the presence of visually
distinct pegmatite within drillholes. Pegmatite
structures have been modelled as predominantly low
angle / sub-horizontal structures on the basis of a high
density of input drillhole data and confirmation of the
interpretation on the basis of mapping. The data do not
readily lend themselves to alternative interpretations,
and it is unlikely that such alternatives would yield a
more geologically reasonable result.
Criteria Explanation Commentary
The use of geology in guiding and controlling The model developed for mineralisation is geologically
Mineral Resource estimation. driven; controlled by the presence or absence of
pegmatite.
The factors affecting continuity both of grade and Geological continuity is controlled by the preference for
geology. fractionated pegmatitic fluids to follow preferential
structural pathways through the host rocks (an
intercalated pile of metasediments and metavolcanics.
Grade within this pegmatite is controlled by numerous
factors such as fluid residence time, degree of fluid
fractionation and pegmatite thickness.
Dimensions The extent and variability of the Mineral Resource The Bald Hill Mineral Resource comprises one large,
expressed as length (along strike or otherwise), main, sub horizontal pegmatite body, striking north-
plan width, and depth below surface to the upper south, with a strike length of 1,070m, and a width at its
and lower limits of the Mineral Resource. widest point of 775m. This main body is surrounded by
several smaller discrete pegmatite bodies, sub-parallel
to the main, which result in a total strike length for the
whole resource of 1,245m, and a total width of 990m.
The Mineral Resource has a total vertical depth of 195m,
beginning 20m below the natural surface and plunging
gently to the south along its entire strike length.
Estimation and The nature and appropriateness of the estimation The Bald Hill Mineral Resource has been estimated using
modelling technique(s) applied and key assumptions, ordinary Kriging in a Surpac block model. The variables
techniques including treatment of extreme grade values, Li2O ppm and Ta2O5ppm were estimated independently
domaining, interpolation parameters and in a univariate sense. The pegmatites on which this
maximum distance of extrapolation from data Mineral Resource was defined was domained internally
points. If a computer assisted estimation method on the basis of a 7,500ppm Li2O cut-off, which itself was
was chosen include a description of computer determined from exploratory data analysis as a point of
software and parameters used. inflection within the Li2O grade distribution. This
resulted in a high-grade core of Li2O mineralisation
surrounded by lower grade pegmatite, and is an
interpretation supported by the petrogenetic model for
the formation of Li2O bearing pegmatites.
Samples were composited to 1m intervals based on
assessment of the raw drill hole sample intervals. Various
high grade cuts were used for both Li2O (ranging from
10,000ppm to 40,000ppm) and Ta2O5 (ranging from
300mm to 4,000ppm) based on statistical review of each
object. Composites for some objects remained uncut
depending on the statistical review.
High and low grade domains were estimated
independently with hard boundaries assumed between
domains. Parameters for estimation and search ellipsoids
were determined from quantitative kriging analysis
performed within the SupervisorTM software package,
which was also used to define semivariogram models for
each variable. The parameters defined for the largest,
most populated domains (main mineralised body and its
high-grade core) were used to inform all smaller
subsidiary domains during estimation.
A two search pass strategy was employed, with
successive searches using more relaxed parameters for
selection of input composite data, and a greater search
radius. Blocks not informed for any given variable after
two passes were assigned the Sichel Mean of the input
data from that particular domain.
Criteria Explanation Commentary
All geological modelling and grade estimation was
completed using Surpac software.
The availability of check estimates, previous No check estimates are available for the current Mineral
estimates and/or mine production records and Resource. Historic estimates for the Bald Hill deposit
whether the Mineral Resource estimate takes focussed on Ta2O5 only, and as such are not directly
appropriate account of such data. comparable to the current estimate for which Li2O is the
primary target variable.
The assumptions made regarding recovery of by- The only significant by-product to be considered is Ta2O5
products. which has been estimated within the domains defined by
Li2O.
Estimation of deleterious elements or other non- No deleterious elements have been identified or
grade variables of economic significance (eg. estimated.
sulphur for acid mine drainage characterisation).
In the case of block model interpolation, the block Block model dimensions used for the Bald Hill Mineral
size in relation to the average sample spacing and Resource estimate were 10 by 10 by 5m (XYZ) sub-celled
the search employed. to 2.5 by 2.5 by 1.25m for resolution of volumes at
lithological boundaries. This compares to an average
drillhole spacing of 20m within the more densely
informed areas of the deposit. This 20m spacing
increases to up to 80m between drillholes in less well
informed portions of the deposit.
Kriging Neighbourhood Analysis (KNA) was conducted
within the SupervisorTM software package to test a
variety of block sizes in both well and poorly informed
areas of the deposit. The chosen block size represents
the smallest block size that yields a robust set of
estimation statistics, which are comparable to the
results also yielded from larger blocks sizes.
Any assumptions behind modelling of selective No assumptions were made regarding selective mining
mining units. units.
Any assumptions about correlation between The two variables under consideration; Li2O and Ta2O5
variables. are uncorrelated within both the pegmatite as a whole,
and within the high-grade domain (correlation
coefficient of -0.04). Consequently, no correlation
between variables was considered. Both variables were
treated in a univariate sense.
Description of how the geological interpretation The nature of the mineralised body is such that the
was used to control the resource estimates. definition of the pegmatite host also defines the
mineralisation. Within that, and based on a combination
of petrogenetic process and statistical appraisal, an
internal high-grade Li2O domain was defined.
Discussion of basis for using or not using grade Domained data for both variables were assessed using
cutting or capping. histogram and log probability plots to define potential
top cuts to data. Where the Competent Person observed
likely breaks in the continuity of the grade distributions,
Criteria Explanation Commentary
a top cut was chosen and applied. This was conducted on
a per-domain basis.
The process of validation, the checking process The results of estimation into the block model for the
used, the comparison of model data to drill hole Bald Hill Mineral resource were validated visually and
data, and use of reconciliation data if available. statistically. Estimated block grades were compared
visually in section against the corresponding input data
values. Additionally, trend plots of input data and block
estimates were compared for swaths generated in each
of the three principal geometric orientations (northing,
easting and elevation).
Moisture Whether the tonnages are estimated on a dry basis Tonnages are reported on a dry basis.
or with natural moisture, and the method of
determination of the moisture content.
Cut-off The basis of the adopted cut-off grade(s) or quality Modelling of mineralisation for the resource was based
parameters parameters applied. on a combination of pegmatite lithological logging.
Within this mineralisation shape, a higher grade core was
defined on the basis of a 7,500 ppm Li2O cut-off.
The Mineral Resource is reported using a 0.5% Li2O cut-
off which approximates a conservative cut-off grade used
for potential open pit mining as determined from
preliminary pit optimisations.
Mining factors Assumptions made regarding possible mining The methods used to design and populate the Bald Hill
or assumptions methods, minimum mining dimensions and internal Mineral Resource block model were defined under the
(or, if applicable, external) mining dilution. It is assumption that the deposit is likely to be mined via open
always necessary as part of the process of pit methods.
determining reasonable prospects for eventual
economic extraction to consider potential mining
methods, but the assumptions made regarding
mining methods and parameters when estimating
Mineral Resources may not always be rigorous.
Where this is the case, this should be reported with
an explanation of the basis of the mining
assumptions made.
Metallurgical The basis for assumptions or predictions regarding The material targeted for extraction predominantly
factors or metallurgical amenability. It is always necessary as comprises the mineral spodumene, for which
assumptions part of the process of determining reasonable metallurgical processing methods are well established.
prospects for eventual economic extraction to No specific detail regarding metallurgical assumptions
consider potential metallurgical methods, but the have been applied in the estimation the current Mineral
assumptions regarding metallurgical treatment Resource, however at the current level of detail
processes and parameters made when reporting available, the Competent Person believes with sufficient
Mineral Resources may not always be rigorous. confidence that metallurgical concerns will not pose any
Where this is the case, this should be reported with significant impediment to eventual economic extraction.
an explanation of the basis of the metallurgical
assumptions made.
Environmental Assumptions made regarding possible waste and No assumptions have been made regarding waste
factors or process residue disposal options. It is always products, however the Mineral Resource has previously
assumptions necessary as part of the process of determining been mined by open pit methods with a processing
reasonable prospects for eventual economic facility, stacked waste dumps and tailings storage
extraction to consider the potential environmental facilities on site. It is reasonable to assume that in the
impacts of the mining and processing operation. presence of this infrastructure, the creation and storage
While at this stage the determination of potential of waste products on site will not be of concern for future
environmental impacts, particularly for a mining activities.
greenfields project, may not always be well
advanced, the status of early consideration of
these potential environmental impacts should be
Criteria Explanation Commentary
reported. Where these aspects have not been
considered this should be reported with an
explanation of the environmental assumptions
made.
Bulk density Whether assumed or determined. If assumed, the In situ bulk densities for the Bald Hill Mineral Resource
basis for the assumptions. If determined, the have been assigned on a lithological basis for both
method used, whether wet or dry, the frequency mineralisation and waste, based on historical values
of the measurements, the nature, size and derived from mining and values taken from those used in
representativeness of the samples. similar deposits and lithologies.
The Competent Person considers the values chosen to be
suitably representative.
The bulk density for bulk material must have been Densities have been assigned on a lithological basis based
measured by methods that adequately account for on a total of 44 metasediment and 25 pegmatite core
void spaces (vugs, porosity, etc), moisture and samples measured at the Nagrom laboratory and values
differences between rock and alteration zones derived from surrounding deposits and rock types.
within the deposit.
Discuss assumptions for bulk density estimates Bulk densities have been applied on a lithological unit
used in the evaluation process of the different basis. Values assigned were as follows:
materials.
- Fresh pegmatite mineralisation 2.65 t/m3
- Transitional pegmatite 2.5t/m3
- Fresh diorite 2.8t/m3
- Transitional diorite 2.6t/m3
- Fresh metasediments 2.74t/m3
- Transitional metasediments 2.6t/m3
- Oxide metasediments 2.2t/m3
- Waste fill 1.8t/m3
additional bulk density testwork utilising drill core across
the mineralised zones and less common waste units is
recommended for future estimates.
Classification The basis for the classification of the Mineral The Mineral Resource has been classified as Indicated and
Resources into varying confidence categories. Inferred on a qualitative basis; taking into consideration
numerous factors such as drillhole spacing, estimation
quality statistics (kriging slope of regression), number of
informing samples used in the estimate, average distance
to informing samples in comparison to the semivariogram
model ranges, and overall coherence and continuity of
the modelled mineralisation wireframes.
Whether appropriate account has been taken of all The classification reflects areas of lower and higher
relevant factors (ie relative confidence in geological confidence in mineralised lithological domain
tonnage/grade estimations, reliability of input continuity based on the intersecting drill sample data
data, confidence in continuity of geology and numbers, spacing and orientation. Overall mineralisation
metal values, quality, quantity and distribution of trends are reasonably consistent within the various
the data). lithology types over numerous drill sections.
Whether the result appropriately reflects the The Mineral Resource estimate appropriately reflects the
Competent Person’s view of the deposit. Competent Person’s views of the deposit.
Audits or The results of any audits or reviews of Mineral Internal audits were completed by CSA Global which
reviews Resource estimates. verified the technical inputs, methodology, parameters
and results of the estimate.
The current model has not been audited by an
independent third party
Criteria Explanation Commentary
Discussion of Where appropriate a statement of the relative The Mineral Resource accuracy is communicated through
relative accuracy and confidence level in the Mineral the classification assigned to the deposit. The Mineral
accuracy/ Resource estimate using an approach or procedure Resource estimate has been classified in accordance with
confidence deemed appropriate by the Competent Person. For the JORC Code, 2012 Edition using a qualitative
example, the application of statistical or approach. All factors that have been considered have
geostatistical procedures to quantify the relative been adequately communicated in Section 1 and Section
accuracy of the resource within stated confidence 3 of this Table.
limits, or, if such an approach is not deemed
appropriate, a qualitative discussion of the factors
that could affect the relative accuracy and
confidence of the estimate.
The statement should specify whether it relates to The Mineral Resource statement relates to a global
global or local estimates, and, if local, state the estimate of in-situ tonnes and grade.
relevant tonnages, which should be relevant to
technical and economic evaluation.
Documentation should include assumptions made
and the procedures used.
These statements of relative accuracy and The deposit has been historically mined for tantalum
confidence of the estimate should be compared (Ta2O5), however no accounting for Li2O had been
with production data, where available. undertaken, and therefore no production records are
available for comparison to the current estimate.
Section 4 Estimation and Reporting of Ore Reserves (Criteria listed in the preceding section also apply to this
section)
Criteria Explanation Commentary
Mineral Description of the Mineral Resource estimate The Mineral Resource estimate was completed by Dr
Resource used as a basis for the conversion to an Ore Matthew Cobb and Mr Ralph Porter of CSA Global Pty Ltd
estimate for Reserve. (CSA).
conversion to
Ore Reserves The Lithium Resources included:
Indicated Resources of 4.6Mt at 1.25% Li2O and 207ppm
Ta2O5; and
Inferred Resources of 8.2Mt at 1.14% Li2O and 130ppm
Ta2O5
Additional Tantalum Resources included:
Indicated Resources of 2.8Mt at 325ppm Ta2O5; and
Inferred Resources of 2.9Mt at 297ppmm Ta2O5.
Clear statement as to whether the Mineral The Mineral Resources are reported Inclusive of Ore
Resources are reported additional to, or inclusive Reserves.
of, the Ore Reserves
Site visits Comment on any site visits undertaken by the The Competent person, Mr Mark Gell, in his capacity as
Competent Person and the outcome of those Registered Manager and Senior Mining Engineer has spent
visits. significant time on the Bald Hill mine site over a period
of 2 years. He has been involved with tantalum processing
from existing tantalum plant and is familiar with most
aspects of the site, logistics, infrastructure and mining
issues.
If no site visits have been undertaken indicate Not applicable
why this is the case.
Study status The type and level of study undertaken to The study undertaken was a Pre-Feasibility Study (PFS).
enable Mineral Resources to be converted to Ore The PFS was undertaken as the basis for conversion of
Reserves. Indicated Resources to Probable Reserves. The study was
Criteria Explanation Commentary
compiled by the Company with input from a number of
independent consultants as follows:
o Geology – CSA
o Mining – CSA for Whittles, Design Marcus
Jacobs, Mark Gell
o Metallurgical testing – Nagrom
o Metallurgy & Processing –Trinol Pty Ltd and
Primero Group (Primero)
o Infrastructure – Klohn Crippen Berger Ltd
(KCB) and GDC Services Pty Ltd (GDC)
o Environmental – Ecotech (WA) Pty Ltd
(Ecotech)
o Geotechnical – Dempers & Seymour Pty Ltd
(Dempers & Seymour)
The Code requires that a study to at least Pre- Mine planning included pit optimisations, pit designs,
Feasibility Study level has been undertaken to mining and processing scheduling, cost estimations and
convert Mineral Resources to Ore Reserves. Such economic analysis to ensure the project is technically
studies will have been carried out and will have achievable and economically viable.
determined a mine plan that is technically
achievable and economically viable, and that
material Modifying Factors have been considered. Capital expenditure estimates are considered to be
within -5%/+10%, and
Operational expenditure estimates are considered to be
within -10%/+15%.
Cut-off The basis of the cut-off grade(s) or quality The economic parameters used in pit optimisation were
parameters parameters applied. used to define a breakeven cut-off grade of 0.39% Li2O
or 200ppm Ta2O5.
Mining factors The method and assumptions used as reported in Pit optimisations, and sensitivity analysis, was
or the Pre-Feasibility or Feasibility Study to convert completed. Slope design criteria, mining dilution, ore
assumptions the Mineral Resource to an Ore Reserve (i.e. loss and processing recoveries were applied in the pit
either by application of appropriate factors by optimisation process together with mining,
optimisation or by preliminary or detailed processing, transport and sales cost estimates,
design). and revenue projections to form the basis for pit
designs and subsequent mining and processing
schedules.
The choice, nature and appropriateness of the A conventional open pit mine method was chosen as the
selected mining method(s) and other mining basis of the PFS. Ore occurs close to surface requiring
parameters including associated design issues minimal pre-stripping and pre- production mining
such as pre-strip, access, etc. activities.
The assumptions made regarding geotechnical Dempers & Seymour carried out geotechnical logging of
parameters (eg pit slopes, stope sizes, etc), 5 specifically located core drill holes in the deeper
grade control and pre-production drilling. portions of the proposed pit and initial evaluation of the
data resulted in recommended inter-ramp slope angles
°
ranging from 48-55 .
A running ramp widths for designs vary from 10m for
single to 19.5m for double lane ramps for gross widths
of 15m-25m.
The major assumptions made and Mineral The Ore Reserve estimate for the PFS was based on the
Resource model used for pit and stope Mineral Resource, dated 14 June 2017, prepared by CSA.
optimisation (if appropriate).
Major assumptions for pit optimisation include: for
lithium 0.20% Li2O fixed tail and 100% recovery (also 70%
Criteria Explanation Commentary
recovery with no fixed tail used). For tantalum recovery
of 62%; ore production rate of 1.2Mtpa; DMS and 0.35Mt
through the tantalum plant; Gross price of US$750/t 6%
Li2O Conc (inclusive of transport). FOB and US$60/lb of
contained tantalum within tantalum concentrates;
Selling cost of 5% (State Government royalty); overall
processing cost of A$29.06/t of lithium and tantalum ore
inclusive of administration costs, ore rehandle, mine
management, contract crushing, sustaining capital and
grade control; and contract waste mining cost at surface
of A$3.04/t mined. Site rehabilitation allowance of
A$0.12/t of waste mined. A discount rate of 8% was
applied.
The mining dilution factors used. Mining dilution of 5% was nominally applied to Indicated
Resources based on the highly visual nature of the ore
and a subjective assessment of prior mining
performance. A grade of 0.0% Li2O and 0ppm Ta205 was
assumed for dilution material.
The mining recovery factors used. A mining recovery of 95% was applied based on highly
visual nature of ore and a subjective assessment of prior
mining performance
Any minimum mining widths used. Minimum mining width for optimisation and design was
30m
The manner in which Inferred Mineral Resources Inferred Resources was included in several pit
are utilised in mining studies and the sensitivity optimisation runs to ensure infrastructure or waste was
of the outcome to their inclusion not located on potential economic resource. The
optimisation shells for the combined Indicated and
Inferred resources contained about 3 times the volume
and mineralisation of those for Indicated alone.
The infrastructure requirements of the selected Mining Infrastructure was limited to ROM pad, haul roads,
mining methods. workshops and other buildings for a contract mining
operation.
Metallurgical The metallurgical process proposed and the For lithium ore the PFS economics has only considered
factors or appropriateness of that process to the style of Phase one processing comprising dense media gravity
assumptions mineralisation. separation (DMS) of the 1mm to 10mm fraction after
P100 crushing to 10mm. This process is considered
lowest risk methodology for the ore type comprising
zoned, very coarse grained, spodumene-? pegmatite.
To further reduce processing risk the DMS circuit will
treat 1-5.6mm and 5.6-10mm separately, with partial
mica removed from the 1-5.6mm fraction using a reflux
classifier (RFC).
-1mm material (lithium fines) along with low grade DMS
concentrates (middlings) will be treated at a later date
through a lithium fines circuit (LFC)
For tantalum ore the PFS has only considered tantalum
recovery from direct ore feed to the existing tantalum
spiral plant and from additional spirals to remove
portion of the tantalum from the lithium fines prior to
stockpiling for future treatment through the LFC. Test
work has shown additional tantalum concentrate
recovery can be obtained from treatment of DMS
concentrate through jigs however this has not been
considered by the PFS.
Whether the metallurgical process is well-tested All technologies proposed are proven and well tested with
technology or novel in nature. easily sourced components
Criteria Explanation Commentary
The nature, amount and representativeness of Samples used for metallurgical test work were sourced
metallurgical test work undertaken, the nature from existing open pits and 10 diamond core holes
of the metallurgical domaining applied and the distributed across the Indicated Resource area.
corresponding metallurgical recovery factors Variability test work and mineralogy was undertaken and
applied. a composite drill core sample was used for design
purposes. A bulk sample collected from open pit
material was processed to obtain approximately 1.5
tonnes of spodumene concentrates averaging 6.23% Li2O
for down-stream test work by lithium convertors.
The variability, composite and bulk samples all show the
same metallurgical characteristics with no apparent
variation or domaining across the deposit.
About 99% of Resources are fresh rock and the remaining
1% is transitional to fresh rock.
Any assumptions or allowances made for For Lithium concentrates potential deleterious elements
deleterious elements. have been observed at low concentrations in
concentrates or are non-existent, key deleterious
minerals and elements are
lepidolite – not present in test work
petalite – not present in test work
Iron – Concentrates to date contain less than the 0.8%
total Fe and 8% moisture content the key contractual
requirements.
mica – concentrates to date contain less than 3% mica.
The Port of Esperance allows a limit of 5% mica.
Detailed mineral product quality and safety chemical
and micro mineral analysis undertaken on concentrates
for the Port of Esperance returned favourable results.
The existence of any bulk sample or pilot scale A bulk sample was processed through a DMS250 at
test work and the degree to which such samples Nagrom. A total of 3,887kg of material was treated
are considered representative of the orebody as through the DMS after removal of fines and partial mica
a whole. for recovery of 1,490kg of combined concentrates
averaging 6.23% Li2O at a recovery of 95.9% of contained
lithium in the DMS feed or net recovery of 84.9% after
taking into account lithium contained in fines and RFC
rejects. The iron content of the combined concentrate
was 0.21%.
This is a significantly better result than the Composite
test work used for engineering mass balance and PFS
recoveries. The exceptionally high recoveries were due
in part to the higher than expected head grade of the
bulk sample feed resulting in middlings being able to be
blended with primary concentrates and grades in excess
of 6% being maintained.
For minerals that are defined by a specification, The Ore Reserve has been based on being able to produce
has the ore reserve estimation been based on the concentrates of at between 5.5% and 7.0% Li2O
appropriate mineralogy to meet the
specifications?
Environmen- The status of studies of potential environmental The Site is a ‘Brown Fields’ site with existing mine
tal impacts of the mining and processing operation. workings and infrastructure. The mine has existing
Details of waste rock characterisation and the Environmental approvals, conditions and monitoring
consideration of potential sites, status of design requirements for pre-existing proposed pits, dumps and
options considered and, where applicable, the tails storage which satisfy a limited portion of the
status of approvals for process residue storage proposed enlarged Mine site. The project has formal
and waste dumps should be reported. Department of Mines and Petroleum (DMP) approval for
the addition of spodumene production and the
Department of Environment Regulation (DER) review of
the revised construction activities is complete. Additional
approvals are still required for larger pits, dumps and the
Criteria Explanation Commentary
long-term tailings facility Studies have shown that there
are no significant additional environmental impacts for
construction of the lithium circuit or extensions to the
existing permitted open pits.
Infrastructure The existence of appropriate infrastructure: The Mine is located in the Goldfields region of Western
availability of land for plant development, Australia where good infrastructure is available for
power, water, transportation (particularly for mining projects.
bulk commodities), labour, accommodation; or
the ease with which the infrastructure can be A sealed highway and unsealed public road with RAV-7
approval provides access from the port of Esperance to
provided, or accessed.
within 1.8km of the plant site where existing private
access road will require minimal upgrading for the
increased traffic load.
Process water requirements for processing can be
serviced from water resources within the mine area, as
per the existing water Permits. Potable water will
transported to site until the new Mine camp is
constructed.
Power will be produced on site using diesel generators.
Product will be shipped via the port of Esperance located
approximately 360km by road to the south.
The site will operate on a fly-in fly-out basis to Kalgoorlie
or Kambalda with a village constructed to house
operations personnel whilst on site. During construction
and operations a combination of the existing village and
a leased neighbouring village will be used.
Costs The derivation of, or assumptions made, Project Capital was derived on the following basis:
regarding projected capital costs in the study.
The DMS circuit capital estimate was estimated by
Primero based on budget pricing and Primero's database
of recent project costs. Subsequent to the initial DMS
capital estimate a fixed sum EPC price has been agreed
based on a detailed scope of works and an early works
contract has been signed allowing long lead items to be
ordered, detailed design to advanced and mobilization
to site. The updated agreed EPC price has been used
for the PFS.
A number of items outside the Primero scope were
costed under by the Company (Owner’s) Costs. These
included Road improvements, Additional mining
infrastructure, Tailings Storage Facility (TSF) based on
initial input from KCB, water reticulation and
environmental costs.
The Company provided costs for Owner’s team and
other related indirect expenses. The Owner’s Costs
have been reviewed and compiled by GDC and Mark
Gell.
Contingency has been applied to account for the
accuracy of the estimate.
Mining working capital costs include site establishment
costs and mobilisation of the contract mining fleet and
pre-production costs. The contract mining operation has
no mining fleet capital expenditure as these costs are
incorporated in the contract mining costs. Pre-
production includes clearing and stockpiling of topsoil.
The methodology used to estimate operating DMS reagent consumption was factored from similar
costs. operations.
Contract crushing unit rates were derived from initial
pricing and exclusions received from contractors.
Contract mining unit rates were derived from initial
Criteria Explanation Commentary
pricing received from contractors.
The Owner’s team for Mine Management and Technical
services were based on personnel levels required to
manage the operation and the Mercer salary Data.
Allowances made for the content of deleterious Due to the low concentration of Fe and mica in the
elements. Concentrates, no allowance was made for deleterious
elements.
The source of exchange rates used in the study. Exchange rates were applied based on external sources
and at current levels.
Derivation of transportation charges. Transport and port charges were derived from
quotations by reputable contractors and includes
storage and re-handling costs.
The basis for forecasting or source of treatment Based on the off-take agreement concentrates must
and refining charges, penalties for failure to contain 5.5% Li2O. positive or negative variations in
meet specification, etc. grade from 6% attract a straight line price adjustment
increment/decrement of US$/15t based on grade
variation of 0.1%.
The allowances made for royalties payable, both Allowances were made for State Government royalties,
Government and private. no other royalties are payable for production from
M15/400.
The derivation of, or assumptions made Spodumene revenue factors were:
regarding revenue factors including head grade,
metal or commodity price(s) exchange rates, Variable head grade averaging 1.12% Li2O over 3.5 years
transportation and treatment charges, penalties, of the mine life after dilution and ore loss
net smelter returns, etc. Processing recoveries applied at 65.8%. Spodumene price
of US$880/t for 2018, 2019 US$733/t for 2020 and
US$800/t for 2021 based on 6% Li2O content
Exchange rate of 0.75 AUD:USD
Transportation and Port loading charges have been
allowed for however remain confidential
Tantalum revenue factors were:
Direct tantalum feed averaging 342ppm Li2O over 3.5
years of the mine life with a recovery rate of 65% to
Revenue saleable concentrates. Secondary production of
factors 191,000kg of tantalum pentoxide from the lithium
circuit fines.
Tantalum pentoxide price of US$60/Lb for a 25% Ta2O5
content
Exchange rate of 0.75 AUD:USD
Transportation and Port loading charges have been
allowed for however remain confidential.
The derivation of assumptions made of metal or The commodity pricing for spodumene concentrates is
commodity price(s), for the principal metals, based on a price of US$880/t (FOB Esperance) for 6% Li2O.
minerals and co-products. The Company has a binding offtake agreement for the
supply of lithium concentrate from the Bald Hill Project
in Western Australia over an approximate initial five-year
term.
The key terms of the offtake agreement are as follows:
Criteria Explanation Commentary
? A fixed price for all production for 2018 and 2019
of US$880/t (FOB Esperance) for 6% Li2O with price
adjustment increment/decrement of US$/15t
based on grade variation of 0.1%.
? From 2020 to 2023, the sales price and volumes
are to be negotiated and will be by agreed based
upon prevailing market conditions at the time.
For the purpose of the PFS reference prices of US$733/t
for 2020, US$800/t for 2021 and US$753/t for 2022, for
6% Li2O concentrates based on Canaccord Genuity
forward estimates.
The commodity pricing for tantalum is based on a price
of US$60/lb (FOB Esperance) for +25% Ta2O5. The
assumed spot price is $55/lb and a premium (based on
historical sales from Bald Hill) of US$5/lb has been
assumed due to the low radiation and past sales history
from the Bald Hill Mine. In ‘real terms’ the current
pricing is close to an ‘all-time’ low however there are
no indications a strong correction to pricing.
The demand, supply and stock situation for the Medium and long-term supply and demand modeling for
particular commodity, consumption trends and spodumene concentrates is difficult to predict due to
factors likely to affect supply and demand into the rapid growth in demand and promise of supply.
the future.
The Company has signed a Binding Offtake Agreement
(BOA) for 100% of production for the first two years
which includes substantial prepayments.
A customer and competitor analysis along with Lithium demand growth will likely be driven by demand
the identification of likely market windows for for electric cars and energy storage systems. There are
the product. several large Lithium projects that are expected come
into production in late 2018 and 2019 these may result
in a period of oversupply from 2020, however based on
history supply has significantly lagged analysts’
Market predictions.
assessment
Price and volume forecasts and the basis for The commodity pricing for spodumene concentrates is
these forecasts. based on a price of US$880/t (FOB Esperance) for 6% Li2O.
The Company has a binding offtake agreement for the
supply of lithium concentrate from the Bald Hill Project
in Western Australia over an approximate initial five-year
term.
For the purpose of the PFS reference prices of US$733/t
for 2020, US$800/t for 2021 and US$753/t for 2022, for
6% Li2O concentrates based on Canaccord Genuity
forward estimates.
For industrial minerals the customer Concentrates produced during bulk metallurgical test
specification, testing and acceptance work are well within contractually acceptable limits of
requirements prior to a supply contract. grade and impurities.
The inputs to the economic analysis to produce The economic analysis is based on cash flows driven by
the net present value (NPV) in the study, the the production schedule. The cash flow projections
source and confidence of these economic inputs include:
including estimated inflation, discount rate, etc.
Initial and sustaining capital estimates.
Economic Mining, processing and concentrate logistics costs to the
customer based on FOB pricing.
Revenue estimates based on concentrate pricing
adjusted for fees, charges and royalties.
A 10% discount factor.
Criteria Explanation Commentary
NPV ranges and sensitivity to variations in the Sensitivity analyses were generated by varying the
significant assumptions and inputs. salient economic variables. The project is most sensitive
to grade, recovery of lithium and AUD/USD. The project
is robust against a 20% negative change to recovery,
grade, metal pricing, foreign exchange rates, capital or
operating costs.
The status of agreements with key stakeholders The site is a Brown Fields operation however over time
and matters leading to social licence to operate. the larger project footprint will have marginal impact
on pastoral lease feed and improvements. The Company
Social is working with the lessee to mitigate impacts. The
License pre-dates Native Title however the Company has
been in dialog with the Ngadju Native Title Group on
neighboring tenements
To the extent relevant, the impact of the following on the project and/or on the estimation and
classification of the Ore Reserves:
Any identified material naturally occurring risks. No material naturally occurring risks have been
identified.
The status of material legal agreements and The Company has a binding offtake agreement for the
marketing arrangements. supply of lithium concentrate from the Bald Hill Project
over an approximate initial five-year term. Apart from
Bald Hill JV agreements that govern the Project there are
no other relevant material legal agreements.
Other
The status of governmental agreements and The Company has granted mining lease M15/400 covering
approvals critical to the viability of the project, sufficient area for the open pit, plant and other
such as mineral tenement status, and infrastructure. Being an operating tantalum mine the site
government and statutory approvals. There must has existing DER operating license and DMP mining
be reasonable grounds to expect that all proposal. An amendment DMP mining proposal has also
necessary Government approvals will be received been approved and a DER license amendment has been
within the timeframes anticipated in the Pre- submitted. There are no apparent impediments to
Feasibility or Feasibility study. Highlight and obtaining all government approvals required for the
discuss the materiality of any unresolved matter project.
that is dependent on a third party on which
extraction of the reserve is contingent. The License pre-dates Native Title.
The basis for the classification of the Ore Probable Ore Reserves were determined from Indicated
Reserves into varying confidence categories. resource material as per the guidelines. As there is no
Measured resource material, there are no Proven Ore
Reserves.
Classification Whether the result appropriately reflects the The results reflect the views of the Competent Person.
Competent Person’s view of the deposit.
The proportion of Probable Ore Reserves that There are currently no Measured Mineral Resources for
have been derived from Measured Mineral the project
Resources (if any).
The results of any audits or reviews of Ore Ore Reserve estimates have been reviewed internally and
Reserve estimates. mine design and scheduling has been reviewed. No
material flaws have been identified and the Ore reserve
Audits or is considered appropriate for a PFS level of study.
reviews
The Primero capital cost and operating estimate and
scope of work was externally reviewed.
The financial model was reviewed externally.
Where appropriate a statement of the relative The Ore Reserve is the outcome of the PFS that has taken
Discussion of accuracy and confidence level in the Ore Reserve into account geological, metallurgical, geotechnical,
relative estimate using an approach or procedure deemed process engineering and mining engineering
accuracy/ appropriate by the Competent Person. For considerations. It has a nominal accuracy of + 15% / -10%.
confidence example, the application of statistical or
geostatistical procedures to quantify the relative
Criteria Explanation Commentary
accuracy of the reserve within stated confidence The Project has a IRR and NPV which makes it robust in
limits, or, if such an approach is not deemed terms of cost variations. The project is sensitive to price
appropriate, a qualitative discussion of the variations for spodumene concentrates and mining costs
factors which could affect the relative accuracy and less sensitive to capital costs.
and confidence of the estimate.
The statement should specify whether it relates All estimates are based on local costs in Australian
to global or local estimates, and, if local, state dollars.
the relevant tonnages, which should be relevant
to technical and economic evaluation. Standard Industry practices have been used in the
Documentation should include assumptions made estimation process.
and the procedures used.
Accuracy and confidence discussions should The degree of accuracy of study knowledge surrounding:
extend to specific discussions of any applied
Modifying Factors that may have a material - Geology
impact on Ore Reserve viability, or for which - Engineering
there are remaining areas of uncertainty at the
current study stage - Permitting requirements
- Project delivery
- Capital and Operational expenditure estimates,
and
- Financial modelling
are considered to be at a minimum of Class 3 in regard
to the Association for the Advancement of Cost
Engineering (AACE). Refer to the AACE International
Recommended Practice No. 18R-97.
Importantly:
- Capital expenditure estimates are considered
to be within -5%/+10%, and
- Operational expenditure estimates are
considered to be within -10%/+15%.
There are no known undisclosed areas of uncertainty.
It is recognised that this may not be possible or There has been no lithium production via DMS to date, so
appropriate in all circumstances. These no comparison or reconciliation of data can be made.
statements of relative accuracy and confidence
of the estimate should be compared with There is significant tantalum recovery records and these
have been used as a basis for estimating future recovery.
production data, where available.
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