The Explorers: Birimian’s Chris Evans on pitfalls, project development and that 100m tonne Mali resource
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The Explorers is Stockhead’s weekly in-depth look at the people behind some of Australia’s most innovative and courageous junior mining companies. Resources reporter Reuben Adams kicks it off this week with a chat with the new managing director of Birimian (ASX:BGS), Chris Evans.
In January, lithium explorer Birimian got serious about developing its Goulamina project in Mali.
It hired Chris Evans, a key exec from freshly-minted lithium producer Altura Mining (ASX:AJM), as managing director to spearhead Birimian’s transition from explorer to producer.
As Altura chief operating officer, Mr Evans was in charge of developing the Pilgangoora project into a world-class lithium operation.
Mr Evans is looking to bring his experience to Birimian’s advanced Goulamina project, one of the world’s largest spodumene mineral resources at 103.2 million tonnes grading 1.34 per cent lithium.
A full feasibility study on the project, which could produce 362,000 tonnes of 6 per cent lithium concentrate per year, should be out by June this year.
“I think it’s a natural progression.
“By necessity any exploration company is fairly small and lightly resourced, and new requirements mean that there is going to be a bolstering of the team.
“[Exploration teams] are also more likely to be ill-equipped to handle the demands of developing a project.
“I think people quickly realise this as soon as the work starts ramping up. So yes, it definitely has to be done.”
“As far as I’m concerned there’s three elements to it.
“Firstly, people with lithium experience, because it’s not the same as every other commodity.
“There are certain tricks to raising money for lithium, finding offtake for lithium, and the technical aspects of actually getting the plant working.
“Secondly there’s Africa experience; and thirdly, general project development and construction experience.”
“I have a background in civil engineering so I enjoy the feeling of building something new.
“For me it’s the excitement and diversity that goes with developing a project. I’m not waking up every morning and considering how many tonnes of reagents we used today and how we can squeeze that down, or what the recovery was.
“It’s far more exciting dealing with regulatory authorities and offtake partners, raising money, and the technical aspects of building a plant.
“The breadth of people you deal with, the experiences you have, and the learning is much more exciting.”
“The quality of the resource. The 100 million tonnes of resource at 1.32 per cent and the 32 million tonnes of reserve at 1.56 per cent – that pretty much puts it in the top 5 in the world.
“It’s probably going to be one of the next lithium projects built outside of Australia.
“The interesting thing about that 32 million tonnes reserve [is that] there is no cut-off grade, like you see with most other resources.
“The cut-off grade, for example 0.46 per cent at Altura, implies that anything below that you essentially throw that away as waste.
“The quality of this orebody is so good that there is no cut-off grade; it assumes every single bit of ore in the pit shell is being processed. If we did introduce a cut-off grade, then the grade of that reserve would jump right up.
“It’s such a good deposit that someone is going to develop this. If it’s not us, then someone else will. It’s just a given.”
“Underestimating the technical difficulty in floating the products to get a 6 per cent concentrate. It was easy to assume that it would go well, but I won’t be assuming that again.
“It was partly a mistake, but partly because three years ago there were very few experts in the market who understood it.
“There are more technical experts available now who have learnt over the last 3 years on the various projects that have been developed.
“The other one is always making sure you have your eye on the strategic ball, particularly in reference to offtake partners. Placing all your trust in one or two offtake partners is potentially fraught with danger.
“I wouldn’t say I know all of the pitfalls, but I have learnt a lot in the last 3 years, which arms me much better going into financing and offtake negotiations with Birimian.”
“We have two non-binding agreements signed, one with General Lithium, and one with a sub division of China Minmetals called the Changsha Research Institute of Metals and Mining.
“[Changsha] are interested in all facets of the project, from construction, financing, and potentially offtake. General Lithium are interested in offtake.
“There are many other conversations in both of those areas [financing and offtake] going on as well.”
“I think the feasibility study will be the gateway into the next step of funding and offtake discussions.
“It’s really going to be focused on optimising the flowsheet that was developed in the PFS last year.
“[The PFS] has a 70 per cent recovery, and everyone knows we should be able to get 80 per cent based on every other hard rock lithium orebody in the world.
“It’s just a function of the test work that been done so far and the time we had back then.
“We have the 100 million tonne resource, and there’s a 70 per cent conversion rate in the area that we [could] convert into a reserve through additional drilling.
“Now if that holds true for the entire orebody – and we can’t see why it wouldn’t – then we will have 70 million tonnes in reserve which gives us a 35 year mine life.
“At the moment we have 16 years [of mine life]; I don’t think it would make much difference if we increase it.
“Of course, at some point we would, but right now the money is probably better spent elsewhere.
“That’s my view. Pilbara Minerals (ASX:PLS) was hellbent on getting a huge resource. Mineral Resources (ASX: MIN) went crazy at Wodgina, and it seemed to pay off for them, selling half of it for $1 billion.
“But I tend to think once you’ve got 15 years it ticks the box for any investor.”