Eye on Lithium: Wesfarmers’ budget blowout for Mt Holland could hit $1.3 billion
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All your ASX lithium news for Wednesday, February 15
In its half year results today West Australian industrial and retail giant Wesfarmers (ASX:WES) said the capex for the Mt Holland mine will be between $1.2-1.3 billion just for the company’s 50% share of the project with SQM.
That’s up from the prior guidance of $1085 million, itself an adjustment from the original $950 million in 2021 dollars which the company blames on labour availability pressures, refinery engineering delays and Covid restrictions.
Construction of the mine and concentrator at Mt Holland is well advanced though, with first earnings for the project expected in the first half of the 2024 calendar year as sales of spodumene concentrate ramp up.
But first production of lithium hydroxide is now expected in the first half of the 2025 calendar year, around six months later than previous guidance.
WES isn’t the first producer seeing long lead times in the ramp up to hard rock lithium production; IGO (ASX:IGO) and Tianqi’s TLEA Kwinana lithium hydroxide plant, Liontown Resources’ (ASX:LTR)Kathleen Valley lithium mine and expansions at Mineral Resources (ASX:MIN)and Ganfeng’s Mt Marion mine and Pilbara Minerals’ (ASX:PLS) Pilgangoora have all seen blowouts in costs and/or schedules.
The company saw a 10% lift in its interim dividend from 80c in FY22 to 88c in FY23, with revenue up 27% to $22.558 billion, EBIT 13.4% higher at $2.16b and NPAT up 14.1% to $1.384b.
CEO Rob Scott said solid sales and earnings at Bunnings, together with strong earnings at Kmart and in its chemicals and fertiliser business were behind the bump.
A total of 31 stocks were in the green, 48 were flat and 58 were red.
The company has entered a binding option agreement to acquire the 185 sqkm Bullabulling project in WA which includes a high priority +4km pegmatite corridor that remains open along strike.
Historic rock chip sampling returned numerous lithium values greater than 1% Li2O – and a peak value of 1.9% Li20.
“This highly prospective project hosts confirmed lithium bearing pegmatites and gold and shares geological similarities to other goldfields lithium deposits like Mt Marion to the east and Nepean to the south,” MD Bruce McCracken said.
“Preparations are underway to assess and validate the potential for economic LCT pegmatite mineralisation and lay the groundwork for more extensive exploration post the Option period.”
The recently listed WA explorer has identified a new lithium target at the Talga project called Nimerry, ~10km from Global Lithium’s (ASX:GL1) 18Mt Archer deposit in the Pilbara.
There are multiple peggies at Nimerry, OCT says, with the largest identified being ~30m in width and over 60m in length.
Early indications are that Nimerry could be similar in size to the company’s nearby Pinnacle Well prospect, which stands at 1.5sqkm.
Rock samples are in the lab for analysis, with results expected by the end of the month.
OCT says drill testing of priority lithium targets is planned immediately after the conclusion of the wet season in Q2.
Another early-stage lithium target identified, this time from minnow OM1 at the soon-to-be-acquired 540sqkm Lac des Montagnes tenement package in Quebec, Canada.
During the due diligence process the explorer has stumbled upon a 2.3km long, 440m wide spodumene target called Senay 5.
All up, +40 pegmatite granites have been mapped within the project area, seven of which have been identified by the Quebec Govt as a “high priority and highly prospective to be spodumene hosting”.
There are striking geological similarities here with the world class Wabouchi lithium deposit (36.7Mt @ 1.16% Li2O), which is 38km along strike from the Senay project.
“The company will continue to methodically review all the available data across this extensive land package with a view to commence field testing as soon as practicably possible,” OM1 boss James Warren said.
“We are excited to begin the discovery journey on this exciting belt-scale exploration opportunity with one of the largest land packages in the exciting James Bay Area for a junior on the ASX.”
Solis has acquired 22 exploration licences covering a total area of 248 km2 (24,800 hectares) in north-eastern Brazil – with a regional structural geological setting similar to Latin Resources’ (ASX:LRS) Colina deposit.
CEO Jason Cubitt says the country is fast becoming a Tier 1 destination for hard rock lithium explorers and producers alike.
“Brazil is still very much in its infancy with lithium exploration and offers a junior explorer such as Solis an exceptional opportunity to discover a material asset,” he said.
“Having our largest shareholder, Latin Resources, in the country will expedite the commencement of exploration and building of the team needed to advance these projects.
“I am excited to see our team commence first-pass reconnaissance and mapping programmes over the coming months.”
Another company picking up projects is SLB, who’ve signed a binding agreement with Everest Metals Corporation (ASX:EMC) to acquire a 90% interest in four large granted exploration licences – including the Trident, Midas and Perseus projects – with lithium, cobalt and copper potential in New South Wales.
Numerous pegmatite swarms are mapped along 15km of strike length at Trident that have historically been worked for tin and tantalum with individual pegmatites up to 300m in length and 60m wide.
Stelar is now planning the first drilling program targeting lithium at Trident.
The company has commenced its Phase I RC drilling program on Exclusive Prospecting Licence (EPL) 8535, part of the Uis Lithium Project, Namibia.
“We are confident in the mineralized pegmatites we have seen on surface to date and with our mapping team continuing in the field, there are numerous additional targets being identified highlighting the significant exploration upside,” VP-exploration and geology Johan Lambrechts said.
“We see the Uis Lithium Project as having significant potential and we are aiming to demonstrate the potential scale of the mineralization through aggressive drilling and other exploration campaigns.
“We are certainly leading the lithium charge out of Namibia.”
The company has signed a deal with Chinese lithium carbonate processor Yongxing Special Materials Technology Co. to supply four 20kg samples of lepidolite and other lithium ores from its Thailand projects for test work.
MAT says the common misconception that lepidolite is difficult or too expensive to process is false, with four producers in Jiangxi province, China – including Yongxing – producing battery grade lithium carbonate exclusively from lepidolite.
And their lithium carbonate end product from lepidolite is comparable to lithium carbonate produced from spodumene at comparable cost.
Yongxing who will treat the samples in their processing facilities to confirm:
Pursuit says due diligence for its acquisition of Trilogy Minerals and its Rio Grande Sur project in Argentina is on track for completion in late February / early March following shareholder approval on 7 February 2023.
“Whilst the final pieces of largely administrative due diligence items are being completed, Trilogy is aggressively pursuing on ground, value add activity that will result in high impact drilling mid-2023,” MD Bob Affleck said.
“The near-term surveys and subsequent drilling are designed to facilitate a maiden JORC resource in 2023 as well as advance feasibility studies.”
Anson has flagged an exploration target at its recently staked Green River lithium project i the Paradox Basin in Utah, USA of 2.0 billion tons to 2.6 billion tons of brine, grading 100 – 150ppm Li and 2,000 – 3,000ppm Br.
The company says this reaffirms a mineral resource potential similar to the company’s nearby Paradox lithium project.
Anson plans to conduct a drilling and sampling program of existing wells within the project area, with a view to including the results from these horizons in a further JORC Resource upgrade that will be confirmed at the Paradox project on completion of the Western Strategy exploration program.
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