Leading lithium developer, Lithium Australia (ASX: LIT) has increased its footprint in Western Australia’s prospective Archean Yilgarn Block region by taking an option over the Youanmi lithium project, 450 kilometres north-east of Perth.
The company has signed a binding heads of agreement to acquire 100% of the early-stage project, which consists of three exploration licences and hosts abundant lithium pegmatites with vanadium-rich magnetite horizons.
The primary driver for the acquisition is to develop an additional feed source for Lithium Australia’s planned large scale pilot plant.
Under the terms of the agreement, Lithium Australia will pay a non-refundable $100,000 for an initial six-month option to acquire all of the rights, interests and titles relating to exploration licences covering about 35 square kilometres of prospective ground.
The option period can be extended to 12 months via another non-refundable payment of $100,000.
Also part of the deal is a $3.1 million scrip exercise and a surviving gross production royalty of either 2% or $1 per tonne of material mined and processed, whichever is greater.
The agreement is subject to Lithium Australia receiving regulatory and shareholder approval, with a formal agreement expected to be completed within 30 days.
Initial progress at Youanmi has included prospecting, reviews of historical work, geological inspections, geological mapping and rock chip sampling.
The work has revealed occurrences of lithium-bearing pegmatites over a strike length of almost 3km and a width of at least 200 metres.
Rock sampling has confirmed the presence of potentially-economic lithium values (up to 4.2% lithium oxide) and anomalous tantalum values.
While the lithium mineral in pegmatites inspected to date has been confirmed as lepidolite, it is believed zoning patterns in surrounding regional pegmatites suggest the possibility that spodumene could also occur in the project area.
Lithium Australia said it is likely that lithium pegmatites are far more extensive than the few outcrops currently known.
Managing director Adrian Griffin said an “unexplained magnetic low” beneath the main area of pegmatite dykes suggests the possibility of a larger pegmatite mass beneath.
“Youanmi has been the focus of past multi-metal exploration and has many of the attributes of WA’s other emerging lithium centres,” he said.
“There has been a significant amount of drilling of the vanadium horizons [but] its lithium potential has largely been ignored.”
He said the style of lithium mineralisation is ideally suited to the company’s SiLeach processing method and may be a feed source for its Generation 3 pilot plant.
Studies have shown SiLeach has a very low energy footprint and is the only hydrometallurgical process capable of digesting all lithium silicates and recovering lithium and a range of other valuable byproducts.
This results in a much lower energy footprint than conventional ‘roasting’ which is the current preferred method of extracting lithium from hard rock micas.