First production of lithium concentrate from the Bald Hill mine in Western Australia remains on track for first quarter 2018 after the owners inked a $30 million contract to build a processing plant at the site.

Tawana Resources (ASX:TAW) and Singapore Exchange-listed Alliance Mineral Assets have signed an engineering, procurement and construction contract with Primero Group to build a 1.2 million tonne per annum Dense Media Separation (DMS) circuit at the project.

Tawana managing director Mark Calderwood said associated site works and construction had begun at the project with close to 200 people expected on site during the peak construction period.

“We remain committed and focussed on delivering lithium concentrate during the first quarter of 2018,” he said.

Alliance Mineral Assets owns the mine with Tawana holding 50 per cent of the lithium rights. The project is subject to a 50 per cent earn‐in to existing infrastructure and tantalum rights by Tawana through the spending of $12.5 million on development costs.

In July, a pre‐feasibility study confirmed the technical and financial viability of a low capital cost 1.2Mtpa lithium DMS adjacent to the existing tantalum processing facility at Bald Hill.

Key findings from the study included EBITDA of $83 million from the initial annual production of 155,000 tonnes per annum of spodumene concentrate and 260,000 pounds of tantalum pentoxide.

The project comprises four mining leases, 16 exploration/prospecting licences and five applications totalling 791.3 sq km.

The mine has a maiden indicated and inferred mineral resource estimate of 12.8 million tonnes at 1.18 per cent lithium oxide and 158 parts per million tantalum oxide at a 0.5 per cent lithium oxide cut-off.

Shares in Tawana remained unchanged at 22.5c at close of market on Tuesday.