Lithium Australia (ASX: LIT) is poised to begin drilling the Medcalf spodumene prospect near Lake Johnston in Western Australia, while acquiring the Mt Deans East tenement under a deal with Aruma Resources (ASX: AAJ).
As part of Lithium Australia’s vertical integration strategy, its raw materials division aims to establish a lithium resource base to provide options for its downstream processing facilities including its proprietary LieNA® technology.
Although Lithium Australia plans to use lithium mining waste streams as feedstock, the company noted it was also evaluating primary supply opportunities which includes the Medcalf spodumene prospect.
In April last year, Lithium Australia revealed it had identified a cluster of stacked pegmatite dykes at the prospect, which extend over 450m of strike and are 100m wide.
The pegmatites were found to have abundant spodumene and a lithium in soil geochemistry anomaly indicates there are possible undercover extensions to the mineralisation.
Additionally, spodumene samples from the pegmatites had minimal waste elements.
Once Lithium Australia has secured requisite approvals, it will kick-off drilling at Medcalf during the June quarter.
Drilling will comprise 12 reverse circulation holes for 2,500m with provisions made for additional holes if needed.
Lithium Australia has established an exploration target for Medcalf of 5-8 million tonnes at 0.8-1.2% lithium oxide.
Mt Deans East lithium tenement
As well as its plans to drill Medcalf, Lithium Australia revealed it will acquire the Mt Deans East lithium tenement in Norseman, WA from Aruma for $15,000 in cash plus $75,000-worth of Lithium Australia shares.
Under the deal, Lithium Australia will also keep the tenement in good standing for nine months to lock-in a 50% stake.
Following that period, Lithium Australia will issue a further $50,000-worth of shares and maintain the tenement in good standing for an extra 18 months. This will increase Lithium Australia’s interest to 80%.
According to Lithium Australia, the Mt Deans area has been explored for many years, with tin and tantalum the initial focus.
However, discoveries of substantial lithium mineralisation in the surrounding region has attracted Lithium Australia’s attention.
The tenement is adjacent to the Goldfield-Esperance Highway and is close to advanced lithium projects including Liontown Resources’ (ASX: LTR) Buldania asset and Pioneer Resources’ (ASX: PIO) Pioneer Dome.
Other company updates
While advancing the exploration potential in its raw materials division, Lithium Australia’s research and development activities for its LieNA® process have also continued.
This has involved the company receiving a 5t sample of spodumene ore grading 1.2% lithium oxide from Pioneer.
As part of the research plans for the process, the sample will be beneficiated to generate a concentrate which will then be given to the Australian Nuclear Science and Technology Organisation where it will extract the lithium using the LieNA® process.
Meanwhile, requisite rehabilitation activities have been completed at Lithium Australia’s Deep Purple and Horseshow prospects near Ravensthorpe with monitoring continuing.