Lithium Australia NL (ASX:LIT) is preparing for a drill program at the Ravensthorpe lithium project, located 10 kilometres west of the Mt Cattlin lithium mine in Western Australia.
Mt Cattlin is one of Australia’s largest lithium developments and is the subject of a $700 million merger between Galaxy Resources Ltd (ASX:GXY) and General Mining Corporation Ltd (ASX:GMM).
The program will drill 35 holes and focus on a target zone that includes the Horseshoe prospect.
Fieldwork at Ravensthorpe has shown the tenement extends along 20 kilometres of prospective strike and hosts abundant lithium pegmatites.
Lithium Australia have also been granted permits to remove up to 5,000 tonnes of material for metallurgical test programs using the company's Sileach™ process.
Sileach™
Sileach™ is a market leading metal extraction technology owned by Lithium Australia.
The Sileach™ process is designed to recover lithium from silicates without the expensive roasting step that has long been the main stay of the lithium recovery process.
In March, the company began to fast track pilot plant testing of the Coolgardie lithium deposit using the Sileach™ process.
Hard rock lithium mining costs are high at around $4,000 per lithium carbonate equivalent tonne.
Lithium Australia wants to remove the energy cost from hard rock operations using its technology to take the mining cost to below $2,000 per lithium equivalent tonne.
Analysis
The Ravensthorpe project area contains the Cocanarup lithium pegmatites, located only a few kilometres to the south-west of the Mt Cattlin lithium mine operated by Galaxy Resources and General Mining Corporation.
The project is well supported by established transport routes, nearby infrastructure and services at Ravensthorpe. The large, deep water port of Esperance is 185 kilometres east of Ravensthorpe.
The bulk sampling permit gives Lithium Australia the ability to apply their 100% owned Sileach™ process.
The company is positioned well within a strong lithium market, developing both, processing technology that is potentially applicable on a global scale, and growing a portfolio of lithium projects.
Lithium Australia now has a variety of lithium related alliances and joint ventures, which means technical resources are pooled and exploration costs are shared.
This portfolio of lithium projects in Western Australia, Northern Territory and Mexico helps produce steady news flow.
Lithium Australia's share price is up 180% over the past 12 months.
Deutsche Bank recently stated lithium demand is expected to increase from 181,000 tonnes lithium carbonate equivalent in 2015 to 535,000 tonnes by 2025.
Once Lithium Australia receives final environmental approvals at Ravensthorpe, drilling will begin and results will be expected thereafter.
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