Lithium Australia are on track to give the green light to a large scale, US$42m pilot plant for their SiLeach Lithium processing technology technology in Malaysia thanks to significant global interest in financing and offtake deals. The Perth-based technologist said off-take proceeds would be one of three principal sources of funding for the project, along with the company’s +$10m in cash reserves and future R&D rebates.
Lithium Australia are working on a range of financing options ahead of an anticipated green-light decision for a US$42m large scale pilot plant for their breakthrough Sileach Lithium processing technology.
The Lithium processing technologist and explorer told the ASX they were on track for a financial investment decision for the project by early 2018.
Managing Director, Mr Adrian Griffin, said: “Global interest in the pilot plant has been significant. Development has now moved to the product off-take negotiations and structuring finance options stage– both with a completion objective of early in the New Year. The commercial opportunity for new battery-focused lithium technologies and products is now well enunciated and a pilot plant of this large-scale is the prelude to a full-scale production plant.”
An engineering study by CPC Project Design released in July found a SiLeach pilot plant built in Malaysia would have a capital cost of US$42m and would be cash flow positive, even before by-product credits. The plant is now in the final stages of design optimization.
It is expected to produce about 2,500 tonnes of Lithium Carbonate equivalent per annum for the rapidly expanding global Lithium-ion battery market.
The key outcome from the pilot plant is for Lithium Australia and its clients to establish the commercial credentials of the 100%-owned SiLeach process, which economically extracts Lithium from a wide range of low quality sources. Sileach eliminates the energy-intensive and expensive roasting stage from the Lithium Carbonate manufacturing process.
It can treat all Lithium silicates including micas and contaminated spodumene concentrates, which are currently being disposed of as waste from mining operations around the world.
The company reported it intended to raise most of the funds it needed for the pilot plant from its own balance sheet. The principal components of funding were likely to be cash reserves and equivalents of around AS$10 million, future government receivables in the form of R&D rebates and pre-payments from off-take partners.
Northern Minerals, whose management is led by Lithium Australia’s non-executive chairman, George Bauk, have successfully used a similar funding approach at their 100%-owned Browns Range heavy rare earths project near Halls Creek. Northern finalised funding earlier this year and is racing towards first production from its own rare earths pilot plant in the first half of next year.
Investor confidence in Lithium Australia’s own maiden development project is on the rise, reflected in a 50% jump in the company’s share price over the past month.