With a proud history as Australia’s mining heartland for iron ore and gold production, Western Australia is also shaping up to be the country’s hub for lithium mining with two projects recently making big strides towards production.
Kidman Resources recently finalised a $US110 million ($137 million) joint venture deal ahead of schedule to build Mount Holland project while Altura Mining secured $US77 million in financing and has mined first lithium ore at its Pilgangoora project.
Investors welcomed the news with Kidman (ASX:KDR) gaining as much as 9 per cent to an intraday high of 83c before cooling to close yesterday at 82c while Altura (ASX:AJM) jumped 16 per cent to an intraday high of 23c before cooling to 21c at market close.
Kidman’s 50-50 joint venture with Chilean chemical company Sociedad Quimica y Minera (SQM) will see SQM take a 50 per cent stake in the Mount Holland tenements for US$30 million while SQM will provide US$80 million in funds for the JV.
The JV deal with SQM to develop Mt Holland was originally announced back in July with a 30 September deadline to finalise the JV.
Kidman Resources managing director Martin Donohue said finalising the joint venture almost three weeks ahead of the target date demonstrates the commitment of both parties to develop Mt Holland.
“Since Kidman and SQM announced the proposed joint venture on 12 July 2017, we have been encouraged by the positive feedback from investors and stakeholders about the potential of our lithium project and refinery aspirations,” he said.
Kidman will further test and potentially upgrade the Earl Grey mineral resource which currently stands at 128 million tonnes grading at 1.44 per cent lithium oxide for 1.84 million tonnes of lithium oxide.
“Due to Kidman’s size, we have only been able to test a relatively small portion of the exploration potential within the Mt Holland project area. Now, with SQM’s backing and support, we can further assess the full potential of the Earl Grey deposit as well as undertake a more extensive regional exploration program,” Mr Donohue said.
Kidman and SQM have also jointly commenced work on a Feasibility Study for the lithium refinery, to be in Western Australia.
The Mt Holland project is centred on the Earl Grey hard-rock lithium deposit south of Southern Cross, in Western Australia and is regarded as one of the best hard-rock lithium projects in the country.
Meantime, Altura Mining (ASX:AJM) mined first lithium ore at its Pilgangoora project late August and has been stockpiled ready for processing.
The Company, along with mining contractor NRW, civil construction partner Civmec and other contractors, began site preparation and construction process 6 months ago.
Since then work has progressed significantly with mine operations centre building delivered to site and currently being installed while early works have begun on crushing plant.
The company has also advised that conditions precedent required for the drawdown of the proceeds from Tranche 2 of its previously announced US$110 million senior secured debt facility have now been met.
Altura expects to receive the US$77 million in funds within 10 business days.
Pilgangoora, located 123 kilometres from the town of Port Hedland, is a world class hard-rock open pit lithium mine.
First production of lithium oxide is expected in early 2018.