Lithium Australia NL (ASX:LIT) is preparing to divest its Western Australian graphite assets as part of an initial public offer on the Australian Stock Exchange.
The spin out will be a pure graphite play called Graphite Australia NL.
Graphite Australia NL has five graphite projects and has recently been granted two exploration licences at one of these projects, Greenhills.
Two experienced Western Australian mining business identities Tom Revy, and George Bauk will drive the proposed public offer.
All Lithium Australia shareholders will be offered a priority entitlement to share subscriptions under the public offer.
The Greenhills Project consists of two applications E70/4811 and E70/4812 having a combined area of 56 square kilometres.
The applications cover a number of historic graphite occurrences which have not been subject to
evaluation by advanced exploration techniques.
Historical tests from the area revealed a graphitic zone contained 8.7% total graphitic carbon and circa 10% of the flake graphite exceeded 600 microns in diameter, which is considered jumbo sized.
Sileach™ pilot plant testing
Lithium Australia recently commenced pilot testing of its 100% owned lithium extraction process, Sileach™, at the ANSTO Minerals facility in New South Wales.
The first test will consist of a 24 hour commissioning run of the circuit.
The results will then be examined prior to commencing continuous operations in about two weeks.
Pilot testing will lead to a decision being made to proceed with construction of a larger-scale pilot plant, for which Port Hedland is currently the preferred location.
Lithium Australia recently won its second grant, this time from the federal government to support the commercialisation of its Sileach™ process.
Definitive feasibility study
Data generated from operating the large-scale pilot plant will be used for feasibility investigations into the construction of a full-scale commercial Sileach™ processing plant.
In the event of a positive outcome of the definitive feasibility study, a joint venture between the company and Pilbara Minerals Ltd (ASX:PLS) will advance to commercial production, including finance and construction, on a 50/50 basis.
The study is due for completion in Q4, 2016 which will lead to deciding whether to proceed to a continuous, site-based pilot plant in Q1, 2017.
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