Impact Minerals leaps ahead with mining lease application for Lake Hope

Impact Minerals lodges mining lease application for Lake Hope HPA mine
Progress continues to be made towards completing PFS by Q4 2024
Lake Hope on track for production and offtake in 2025

Special Report: Impact Minerals continues to progress its Lake Hope high purity alumina mine in WA towards production with the lodgement of the key mining lease over the West Lake resource.

The mining lease application MLA63/684 and associated miscellaneous licence (L63/99) to cover mine infrastructure and the haulage road are crucial steps in advancing the project towards production as they define the work required to obtain the statutory approvals needed for the grant of the mining lease.

Additionally, the approvals process and the logistics and estimated costs of mining and transporting the Lake Hope mud to the process plant, make up one of the four key parts of the pre-feasibility study that Impact Minerals (ASX:IPT) is currently working on.

The company can take an 80% interest in Playa One Pty Ltd, which owns Lake Hope and associated intellectual property, by completing the PFS – currently on track to be released in Q4 2024.

It adds that a clear pathway to the grant of the mining lease has been established with a negotiation protocol for land access and cultural heritage agreements with the Ngadju people now under review along with further seasonal flora and fauna surveys.

The project, which is about 500km east of Perth, contains a maiden resource of 3.5Mt at 25.1% Al2O3, with 88% already in the higher confidence indicated category.

The Lake Hope project and proposed haul route. Pic: Impact Minerals

“We are very pleased to have lodged Impact’s first-ever mining lease, a major step in our goal to bring the Lake Hope high purity alumina project into production. The application covers West Lake and sufficient material for at least the first 15 years of our proposed production,” managing director Dr Mike Jones said.

“It also offers a more direct haulage route to the Norseman-Hyden road than existing tracks, potentially saving millions of dollars in road construction costs.

“The application also clearly sets a path towards gaining the statutory approvals required for the grant of the mining lease. In particular, this will require engaging in a well-defined negotiation process with the Ngadju Aboriginal People, the traditional custodians of the land around Lake Hope and further seasonal flora and fauna surveys in and around the proposed mine infrastructure.

“We will progress on both these critical paths in the next Quarter. All this work at what will be the Lake Hope Mine is one piece of the large jigsaw puzzle that comprises the pre-feasibility study, and we continue to make progress with the other key pieces: the process plant, test work, product offtake, and marketing.

“We are working towards completing the PFS by the end of the year and set ourselves up for significant strides towards production and offtake in 2025.”

A near-term HPA opportunity

Lake Hope presents a rare opportunity to produce HPA – aluminium oxide with a purity level of 99.99% that trades for around US$20,000/t – at the bottom end of the global cost curve.

An existing scoping study completed last year has indicated that the project could produce 10,000tpa at just US$4000/t, underpinning strong margins for the product used in LED lights, lithium-ion batteries and flame retardants.

Post-tax net present value – a measure of profitability – has been estimated at $1.3bn.

Initial experimental work has produced a hydrated alumina product with uses in the catalyst and flame-retardant industries while early-stage discussions have been held with ceramic and alumina producers in Europe and the US.

PFS progress

Mining studies are currently underway to provide detailed mining schedules, proposed equipment, site logistics and costs of mining and transport of ore to Kwinana, which has been selected as the best location for the processing plant.

H and S Resource Consultants are currently interpreting drill assay data to help upgrade a significant portion of the previously defined indicated resource to an even higher confidence measured resource. This will allow a maiden proven reserve to be declared with further mining and economic studies.

IPT is also seeking quotes for the seasonal flora and fauna surveys that will be required along the haul road and proposed gravel pits.

In addition, further heritage surveys will be needed for the same infrastructure and will likely occur next year as discussions with the Ngadju People and the statutory approvals process progress.

For the proposed process plant, IPT is holding discussions with potential suppliers of the input reagents required for the process and potential buyers of the associated fertiliser and acid by-products.

The company notes these talks indicate that both the required inputs and by-product outputs can be provided “at the gate” in Kwinana. This is a significant strategic advantage for the project that minimises the requirement for many minor capital items and will deliver operating cost savings.

It has identified a block of land as being suitable for the plant, and discussions are underway to secure it when appropriate.

Additionally, CPC Engineering has been commissioned to undertake design engineering studies and provide estimates of the capital and operating costs for the 10,000tpa process plant.

Metallurgical test work is also progressing well with production of HPA samples now underway.

Work is progressing on both the sulphate process and low temperature leach process and now includes further mass flow balance and process flow design work with a particular focus on acid usage and regeneration at the back end of the processes.

Further test work has also been completed on the fertiliser by-product to help determine likely demand and pricing while detailed discussions are in progress regarding the design and construction of a pilot plant that will produce HPA of consistent quality for potential offtake partners.

This article was developed in collaboration with Impact Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.