Tawana Resources (ASX: TAW) has revealed it is on track for production from its Bald Hill mine in Western Australia’s eastern goldfields, with first lithium concentrate expected by the end of the March 2018 quarter.
Commenting on the development progress, Tawana managing director Mark Calderwood said structural steel work was well-advanced and mechanical equipment and electrical cabling installation has begun.
“We have selected mining, crushing, power and fuel contractors and the mining contractor has mobilised to site,” Mr Calderwell added.
The concrete works have almost been finalised and installation is underway for bins, hoppers, screens and pumps.
Owned via 50:50 joint venture between Tawana and Alliance Mineral Assets (SGX: AMA), Bald Hill development is fully funded to its first lithium concentrate shipment.
Under an offtake agreement the duo inked with Burwill Holdings in April 2017, Tawana was prepaid $12.5 million. The prepaid funds went towards subsidising the project’s development.
The offtake agreement covers a five-year period with set pricing between 2018 and 2019 of US$880 per tonne (free on board from Esperance) for 6% lithium oxide.
Bald Hill has a current indicated and inferred resource of 18.9 million tonnes grading 1.18% lithium and 149 parts per million tantalum.
A pre-feasibility study completed in July this year confirmed the viability of a 1.2 million tonne per annum lithium processing facility adjacent to an existing tantalum plant at Bald Hill.
“The project is coming to life, with significant increases in manning levels, and we remain committed and focussed on delivering lithium concentrate from Bald Hill during the first quarter of 2018,” Mr Calderwell said.
Bald Hill encompasses 774 square kilometres and includes four mining leases, one mining lease application, 12 exploration permits, eight prospecting licences and a general-purpose lease.
In early October, Tawana reported a 47% increase in its contained lithium resources, which only includes 25% of the known pegmatites in the project’s south.
The company has planned further drilling during 2018.
Tawana’s shares rose almost 4% to A$0.42 in early morning trade.