Sayona Mining (ASX: SYA) has begun its pilot plant program for its flagship Authier lithium project, which the company claims will “de-risk” the project further by assisting with finalising its flowsheet and processing parameters for producing a 6% lithium concentrate.
Ontario-based SGS Canada will be undertaking the program which is also expected to produce engineering information required equipment sizes and plant design.
Once completed, Sayona will incorporate the results into its definitive feasibility study, which the company anticipates will wind up in the June quarter.
“The objective of the pilot program is to further refine the design and confirm the operating parameters for the Authier process plant, in order to de-risk the plant construction, commissioning and ramp up,” Sayona chief executive officer Corey Nolan said.
Sayona is targeting first production from Authier for late next year or early 2020.
A pre-feasibility study published last year indicated a 17-year mine life with forecast annual earnings before tax interest depreciation and amortisation of around A$38 million.
The start-up cost was estimated at A$65 million to produce an initial 96,000tpa of 6% lithium concentrate.
Sayona has de-risked Authier further with a memorandum of understanding (MoU) with major battery materials manufacture Minmetals Group’s subsidiary Hunan Changyuan Lico.
Under the MoU, Sayona and Hunan are evaluating various development, technical, marketing and financial options regarding Authier, including Hunan purchasing all lithium concentrate from the project and assessing downstream processing avenues.
A scoping study suggested downstream processing of Authier lithium to lithium carbonate or lithium hydroxide could boost the project’s pre-tax net present value to C$794 million from C$221 million by producing 6% lithium.
Situated 45km from Val-d’Or in Quebec, Authier has a reserve of 102,725 contained lithium, and a resource of 186,939 contained lithium, with the deposit remaining open in all directions.
Sayona started its phase three drilling program mid last month to expand and optimise the existing reserve and resource for inclusion in the definitive feasibly study.
By mid-afternoon trade, Sayona’s share price was up more than 9% at A$0.07.