Junior explorer Liontown Resources (ASX: LTR) is set to expand its lithium footprint in Western Australia’s south-eastern goldfields district after striking a deal with Avoca Resources to acquire an adjoining mining lease.
Under the terms of the deal, Liontown will issue 10 million Liontown shares to Avoca to incorporate mining lease M63/647 into the existing Buldania Lithium Rights Agreement (BLRA), expanding the project’s acreage by approximately 67 square kilometres.
In doing so, Liontown will acquire 100% of the lithium and related metal rights on the lease, including beryllium, caesium, niobium, rubidium, tantalum and tin and will pay Avoca $2 per tonne of ore mined and 1.5% of gross sales revenues in respect to metals extracted.
M63/647 adjoins the BLRA tenure and covers the north-west extension of the prospective stratigraphy which includes the Anna pegmatite and where drilling by Liontown earlier this year discovered significant spodumene-related lithium mineralisation of up to 58 metres at 1.2% lithium oxide.
Recent mapping and rock chip sampling in the area of the lease has also defined a series of outcropping spodumene-bearing pegmatites up to 800m long and 20m wide, with assay values of up to 3.0% lithium oxide.
Currently comprising two tenements (E63/856 and P63/1977) 30 kilometres east of Norseman, the BLRA is one of a number of largely-contiguous projects held by Liontown in the southern part of the eastern goldfields province – a region well-known for hosting large lithium deposits including the operating mines at Mt Marion (part-owned by Mineral Resources ASX: MIN) and Bald Hill (Tawana Resources ASX: TAW).
The projects cover a total area of approximately 650sqkm and are considered highly prospective for pegmatite-hosted lithium mineralisation.
Mapping and rock chip sampling by Avoca on M63/647 and by Liontown on tenure immediately adjacent have defined a number of outcropping, spodumene-bearing pegmatites.
Due to the sparse nature of the outcrop, Liontown said it is probable that the mineralisation is more extensive and further geochemical sampling has been planned to identify targets for drill testing in early 2019.
There has been no drilling into newly-discovered pegmatites located between 5km and 8km north-west of the Anna pegmatite.
Lithium mineralisation has so far been defined over a strike length of 1.3km at Anna and geological modelling is in progress as a precursor to preparing a maiden resource estimate.
Kathleen Valley progress
Meanwhile, Liontown continues to make good progress at its wholly-owned Kathleen Valley lithium-tantalum project, located on the western edge of the Norseman-Wiluna Belt, approximately 400km north of Kalgoorlie.
In May, the company encountered lithium grades of up to 2.6% from a batch of assays from the project, confirming continuity and strike extensions of high-grade mineralisation.
This week, it reported “encouraging results” from initial metallurgical test work on a 300 kilogram composite sample created from six diamond drill core holes.
Lithium oxide grades of 5.9% from two-stage dense media separation tests, and 5.5% from flotation tests resulted in a combined concentrate product of 5.6% lithium oxide at a predicted recovery of 79% and with a low iron content (<0.5% iron oxide).
A tantalum concentrate was also produced during the tests however low mass recovery precluded the implementation of subsequent upgrade process stages.
Liontown said the results support the inclusion of tantalum concentrate recovery in a large-scale test work program scheduled for early 2019.
“While our individual process units have not yet been optimised for recovery or grade, these results provide strong support for the ability to achieve saleable lithium oxide from Kathleen Valley and increase our confidence that tantalum pentoxide concentrates can [also] be produced,” said Liontown managing director David Richards.
He said further diamond core drilling is planned to provide material for the project’s optimisation work.
In September, Liontown announced a maiden measured, indicated and inferred mineral resource for Kathleen Valley of 21.2 million tonnes at 1.4% lithium oxide and 170 parts per million tantalum pentoxide.
At midday, shares in Liontown Resources were up 4.17% to $0.025.