How much upside can Manono provide for lithium hopeful AVZ?
Mining & Resources
Special Report: At the Manono lithium project in the DRC, explorer AVZ Minerals has unveiled a fresh prospect that’s potentially bigger than its world-beating Roche Dure resource.
With a resource of 400.4mt grading 1.66 per cent lithium, the Manono project’s Roche Dure deposit is already the largest tonnage and one of the highest grades of undeveloped hard rock lithium resources in the world.
AVZ’s reported JORC Mineral Resource estimate for Manono was completed in August 2018 using drilling results from just 75 per cent of the Roche Dure pegmatites’ strike length, which is just one of six massive pegmatites at the Manono project, located some 500 kilometres north of Lubumbashi City.
Pegmatites are rocks formed from granite derived lava or magma that often contain rare earth minerals, tin and tantalum metals and gem quality crystals.
They are also the primary source of lithium rich spodumene mineralisation.
Now, new drilling some 5km northeast of Roche Dure along the mineralised trend, suggests the Carriere de l’Este pegmatite at Manono could be even bigger than Roche Dure and at a better grade.
Wide spaced, first pass diamond drilling confirmed shallow, widespread, high-grade spodumene lithium grades over 2 per cent Li2O and up to 4 per cent in places.
These are exceptional grades.
The main upper Carriere de l’Este pegmatite is also huge – greater than 1.5km long and up to 200m thick in places with other underlying pegmatites bringing the complete mineralised package up to 350m thick.
AVZ’s technical team have not yet closed off the pegmatite along strike to the south where it could possibly extend further under shallow alluvial cover.
Given the size and mineralised nature of the pegmatites at Carriere de l’Este, AVZ has generated an exploration target – which is conceptual in nature — of between 400 and 600 million tonnes at grades between 1.3 per cent to 1.7 per cent Li2O.
The company needs to complete further drilling campaigns to define JORC resources at Carrier de l’Este and it has plans to do so over a three year period but is concentrating its efforts on the BFS study currently underway for Roche Dure.
AVZ managing director Nigel Ferguson says it is an exciting discovery that could “potentially exceed the Roche Dure deposit” in size.
“The exciting near surface, high-grade zones of this flat dipping deposit, coupled with strong surface mineralisation noted from mapping and these new drill results, have extended the strike of the deposit to at least 1.5 kilometres long,” he says.
“There is no evidence to suggest it does not continue under cover towards the Tempete pegmatite some 2 kilometres to the southwest,” he says.
And with an additional four targets after Carriere de l’Este yet to be tested at Manono, AVZ is still just scratching the surface on likely final tonnages for the project.
This is a giant deposit, there’s no doubt about that.
There is about 9km of exposed pegmatites from the most southern end of Roche Dure to the northern end of Carriere de l’Este, all exposed at surface and up to three hundred metres thick in places and at an average of +200m thick.
Only 1.8km strike length at Roche Dure and 700m at Carriere de l’Este have been drilled so far.
Not only does Manono have size on its side, it also has quality, with the initial resource of 400.4 million at 1.66 per cent lithium oxide already ranking as the highest grade for a hard rock lithium deposit owned by an ASX-listed company.
Higher grades, as well as super low stripping ratios of about 0.7 to 1 (which means AVZ is moving more ore and less waste) potentially means very low average mining and processing costs. Quite simply, less tonnes of ore to produce a tonne of concentrate.
And because of the low level of impurities found in Roche Dure ore, the company expects to produce a spodumene concentrate potentially as high as 6.3 per cent Li2O.
Initial metallurgical test work demonstrated Roche Dure can produce up to a 6.3 per cent. concentrate using standard metallurgical laboratory test standards.
This is important because 6.3 per cent represents a big jump on the conservative grades of 5.8 per cent used in last year’s Scoping Study and would therefore attract a further premium price.
A 13 tonne metallurgical sample is currently en route to Perth, where it will be used to gather information for optimal spodumene recovery and process plant design.
This testing will give AVZ all the information it needs to treat the ore efficiently to maximise recovery of not only spodumene, but also the contained tin and tantalum.
Additional tests will also be undertaken to estimate the likely tin and tantalum recovery from the ore, which will allow AVZ to finally include this bonus production to the project’s bottom line.
A 2018 MIT study, cited by Rio Tinto Ventures boss Andrew Latham, showed future tin demand spiking on the rise of autonomous and electric vehicles, advanced robotics, renewable energy, and advanced computing and IT.
More tin is required in the world regardless – demand is growing at a steady 2 to 3 per cent from existing tech demand — and there is limited new supply entering the market.
The spot price has already surged in the past few months, currently sitting at well over $US21,000 per tonne.
Roche Dure currently includes a substantial 330,000 tonne JORC compliant tin resource, which has not yet been taken into account in the independent financial modelling.
It’s expected this will be included in the definitive feasibility study, which could represent a notable boost to the bottom line given current tin prices even with a modest recovery.
The definitive feasibility study on Manono is due for completion towards the middle of 2019, with the company confident of having approvals and funding in place to commence construction towards the end of the year and production in 2020.