Bald Hill commissioning ‘exceeds’ expectations for Tawana Resources with higher-grade lithium

Tawana Resources ASX TAW Bald Hill lithium spodumene ore concentrate
Lithium concentrate stockpiles from ore mined from Tawana's Bald Hill project.

Maiden spodumene production at Tawana Resources’ (ASX: TAW) 50%-owned Bald Hill project has been completed successfully, with performance tests exceeding nameplate capacity and average lithium grades using the lower grade commissioning ore.

According to Tawana, nameplate capacity of 162 tonnes per hour was achieved within the first two weeks of commissioning, with ramp up to full production on-track for the next quarter.

Three performance tests were carried out with 4,152t of ore processed over 24 hours with the average rate of 173tph greater than nameplate capacity.

Samples of the primary concentrate returned 7.03% lithium, 0.34% iron, plus 1.12% sodium and potassium.

“To produce concentrates with more than 5% lithium within the first two week of ore commissioning exceeds expectations give the initial low feed grade ore being used for commissioning start up,” Tawana managing director Mark Calderwood said.

“Equally impressive is the exceptionally low iron and mica contents,” he noted.

He added it was positive the dense media separation plant had attained its predicted performance during performance testing.

Lithium producer status

Earlier this month, Tawana reported it had begun producing lithium concentrate at Bald Hill in Western Australia.

Tawana and its joint venture partner Singapore-listed Alliance Mineral Assets (SGX: 40F) claimed this first production made Bald Hill Australia’s first spodumene operation to come online since 2016.

Offtake tied up

The duo has a secure five-year offtake arrangement in place with Burwill Holdings.

Burwill will purchase 6% lithium concentrate for five years at US$880 per tonne for 2018 and 2019, with the new price to be agreed on thereafter.

The off-taker locked-in its supply with a A$12.5 million prepayment to Tawana and a further prepayment to Alliance Minerals.

Both Tawana and Alliance used the prepayments to cover Bald Hill development costs.

Burwill anticipates receiving of its first spodumene next month.

Fast facts on Bald Hill

The Bald Hill resource only accounts for 25% of the known pegmatites in the project’s south, with the entire project purportedly “significantly underexplored”.

Bald Hill encompasses 774 square kilometres and has a current resource of 223,000t of contained lithium and 5.1 million pounds of tantalum.

Last week, Tawana reported it was spinning out its other assets into a new entity to focus on progressing Bald Hill.

The proposed spin out would enable the new entity to unlock the value of Cowan, Yallari and Mofe Creek lithium and iron projects, while enabling Tawana to put its cash and time into advancing Bald Hill.

Shares in Tawana lifted 3% in early morning trade to A$0.465.

Lorna has more than 10 years' experience as a finance journalist and editor. She has written for numerous industry publications reporting on various sectors, including: resources, energy, construction, biotech, pharma, science and technology, agriculture, and chemicals. Specialising in resources, Lorna has also covered a myriad of small and large cap ASX and dual-listed stocks.