Allkem Limited (ASX: AKE, “
Allkem” or the
“
Company”) provides an Ore Reserve update for its
Mt Cattlin operation in Western Australia (“
WA").
HIGHLIGHTS
-
Ore Reserve tonnage increased 34% to 7.8Mt at 1.20% Li2O and 130ppm
Ta2O5 at a cut-off grade of 0.4% Li2O.
-
The Ore Reserve and planned mining schedule suggests a projected
Life-of-Mine for the next 4-5 years (2027-2028) via open pit mining
methods. The Ore Reserve has increased with higher grade despite
mining depletion to support production. The recent category
upgrades in the latest Mineral Resource Estimate, and substantial
increases in revenue pricing for spodumene concentrate have
contributed to the increase in Ore Reserves.
-
The next mining stage (Stage 4) consists of two separate cutbacks
(Stage 4-1 and 4-2) to optimise ore presentation. A mining proposal
for Stage 4 has been submitted to WA regulators and is anticipated
to be received by the end of CY23.
-
The Board has approved mining of the first cutback (Stage 4-1) of
the open pit, which will result in continued spodumene production
into 2026.
-
In the second cutback (Stage 4-2), the increasing waste/ore strip
ratio at depth via open pit mining methods is being evaluated
against an alternate underground mining option. The company sees
significant opportunity in transitioning to an underground mine
including the unlocking of greater orebody extension potential and
prolonging the life of mine.
-
An underground Feasibility Study is expected to be delivered by Q1
CY24. It will enable a variety of scenarios to be modelled and will
ensure an optimised future mining method is selected.
ORE RESERVE ESTIMATE
The Mt Cattlin Ore Reserve estimate is based on
the Mineral Resource Estimate of 12.8Mt at 1.3% Li2O grade and
179ppm Ta2O5, released on 17 April 2023. The Mineral Resource was
updated after the completion of a major infill drilling program
which successfully upgraded Inferred Mineral Resources with 92% of
the total Mineral Resource tonnage now classified as Indicated
Mineral Resources.
Allkem has reviewed and updated the Mt Cattlin
Ore Reserve (Table 1 below), incorporating infill drilling results
from the 2NW deposit, depleted mined material and site stockpiles
at 31 March 2023 and material to be mined after this date are
presented in accordance with JORC (2012) Ore Reserve Reporting.
Table 1: Mt Cattlin Ore Reserve Update
as at 31 March 2023
Classification |
Location |
Ore Tonnes(Mt) |
Grade
Li2O(%) |
Grade
Ta2O5(ppm) |
ContainedMetal (‘000)
tLi2O) |
ContainedMetal (‘000)
lbsTa2O5 |
Proved |
In-situ |
- |
- |
- |
- |
- |
Probable |
In-situ |
6.1 |
1.3 |
130 |
80 |
1,800 |
|
Stockpiles |
1.8 |
0.8 |
99 |
14 |
380 |
Total Ore Reserve |
|
7.8 |
1.2 |
130 |
93 |
2,200 |
Notes: Ore Reserves are reported above a cut-off grade of 0.4 %
Li2O. The reported Ore Reserve incorporates regularisation of the
Mineral Resource to a Selective Mining Unit of dimension 5.0 m x
5.0 m x 2.5 m (East, North, Elevation), with no additional mining
dilution or mining recovery factors applied. Estimates have been
rounded to a maximum of two significant figures, thus sum of
columns may not equal.
Reserve
Methodology
Pit optimisations have been carried out using a
fixed spodumene concentrate sale price of US$1,500/t and an
exchange rate of 0.7 USD:AUD. Whittle pit optimisation software has
been used to identify the preferred pit shell on which the pit
design was based.
The target design shells were selected to
provide a logically phased mine life that maintains future
optionality to further evaluate the trade-off between the larger
second phase cutback compared to, or in conjunction with,
underground mining.
The current mine sequence is based on:
- Continued mining
of the current stage (Stage 3) of the 2NW pit to completion,
- Phasing of the
next stage (Stage 4) into two separate cutbacks to manage the strip
ratio and provide smoother ore supply to the processing plant;
and
- The timing of a
Mining Proposal that has been lodged in May with WA regulators to
extend the current pit and allow for both cutbacks. The associated
documentation, including updated Mine Closure Plan, will be
reviewed in due course and is anticipated to be approved by the end
of CY23.
The mine plan is shown to be technically and
financially feasible with an overall life of mine (LOM) ore: waste
strip ratio of 19.8:1. A suitable cashflow positive buffer exists
below the assumed product prices to provide confidence that the Ore
Reserve estimate will be financially viable within a reasonably
expected range of possible product prices.
Figure 1: Mt Cattlin Cross section
Looking East
Figure 2: Mt Cattlin Stage 4 Open Pit
Plan
Figure 3: Mt Cattlin Stage 4 Open Pit
Plan
Prior to the current 2023 Ore Reserve estimate,
the most recent estimate (Table 2) was a depletion by Allkem as of
30 June 2022. The 2023 Ore Reserve estimate shows the total
reserves have increased despite the mining depletion that has
occurred since the previous reserve statement. Mineral Resource
conversion from Inferred to Indicated and the economic environment
around Lithium have contributed to the increase in Ore
Reserves.
Table 2: Mt Cattlin Ore Reserve at 30
June 2022
Category |
Tonnage Mt |
Grade% Li2O |
Gradeppm Ta2O5 |
Contained metal(‘000) t Li2O |
Contained metallbs Ta2O5 |
Proven |
- |
- |
- |
- |
- |
% |
Probable |
2NW only |
3.3 |
1.12 |
105 |
37.0 |
764,000 |
|
Stockpiles |
2.4 |
0.80 |
122 |
19.0 |
646,000 |
Total |
5.8 |
0.98 |
113 |
56.0 |
1,410,000 |
Notes: Reported at cut-off grade of 0.4 % Li2O
within current mine design. The preceding statements of Ore
Reserves conforms to the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (JORC Code)
2012 edition. All tonnages reported are dry metric tonnes. Reported
with 17% dilution and 93% mining recovery. Revenue factor
US$650/tonne applied. Minor discrepancies may occur due to rounding
to appropriate significant figures.
A description of the major factors that resulted in changes from
the 2023 Ore Reserve to the 2022 Ore Reserve is as follows:
- An updated 2022
Mineral Resource Estimate with higher grade and increased tonnages
in the Indicated category;
- Increased pit
shell from US$650/tonne to US$1,500/tonne; and
- Decrease in Ore
Reserves due to ongoing open pit mining and stockpile
processing.
NEXT STEPS
Underground Feasibility
Study
The Underground Feasibility Study is underway
and will trade off optimised mining methodologies to improve the
most beneficial/more economic outcomes. The study is expected to be
completed by early CY24. The approval to proceed as an underground
mine will be compared with the existing Open Pit Feasibility Study
and also consider the potential for future upside (i.e. orebody
continuation at depth).
Step out drilling
It was observed that both the USD 1,100 and
1,500 RPEEE Mineral Resource iterations remain limited by a lack of
drilling data which will be resolved by further step out drilling
planned for later in CY23.
RESOURCE AND RESERVE CONTROLS &
GOVERNANCE
Allkem ensures that quoted Mineral Resource and
Ore Reserve estimates are subject to internal controls and external
review at both project and corporate levels. Mineral Resource and
Ore Reserves are estimated and reported in accordance with the 2012
edition of the JORC Code. Further information is available in the
appendices and JORC Table 1.
Allkem stores and collects exploration data
using industry standard software that contains internal validation
checks. Exploration samples from drilling have certified reference
material standards introduced to the sample stream at set ratios,
typically 1 per 25 samples. These are reported as necessary to the
relevant Competent Persons to assess both accuracy and precision of
the assay data applied to resource estimates. In resource
modelling, block models are validated by checking the input drill
hole composites against the block model grades by domain.
Allkem engages independent, qualified experts on
a commercial fee for service basis, to undertake Mineral Resource
and Ore Reserve audits. Allkem internally reconciles the resource
outcomes to validate both the process and the outcome.
The Company has developed its internal systems
and controls to maintain JORC compliance in all external reporting,
including the preparation of all reported data by Competent Persons
who are members of the Australasian Institute of Mining and
Metallurgy or a ‘Recognised Professional Organisation’. As set out
above, the Mineral Resource and Ore Reserve statements included in
this announcement were reviewed by suitably qualified Competent
Persons (below) prior to their inclusion, in the form and context
announced.
PROJECT ECONOMICS
Project economics for the full stage 4 expansion
are set out below and will be updated following approval to proceed
with stage 4-2 and/or an underground option.
Operating costs
Operating cash costs for the LOM are estimated
at US$935/dmt produced. It incorporates the remainder of the
current Stage 3 open pit, Stage 4 open pits, and processing of
end-of-life stockpiles from 1 April 2023 to end of mine life.
The table below proves a summary of the
estimated LOM annual unitary cost by category.
Table 3: Estimated LOM operating cost by
category
LOM Operating Cash Cost |
US$/dmt produced |
|
Costs |
|
|
|
Mining |
|
445 |
|
Processing |
|
268 |
|
General & Administration |
|
68 |
|
Site Operating Costs |
|
780 |
|
Transport & Logistics |
|
40 |
|
Cash & Operating Costs |
|
821 |
|
Royalties |
|
126 |
|
By-Product credits |
|
-12 |
|
FOB Cash Cost |
|
935 |
|
Commodity prices
Forecast pricing for benchmark 6.0% Li2O
spodumene concentrate has been sourced from independent market
analyst group Wood Mackenzie1 and discounted for costs and
penalties to give a Realised Price. The final pricing used is
effectively net A$ FOB.
Tantalite (Ta2O5) concentrate is a by-product
that contributes meaningful, but not material, revenue to the
project. A flat sale price based on existing contracts has been
applied to expected production.
A forward USD: AUD exchange rate forecast
provided by Allkem has been used for this study, as shown in Table
4.
Table 4: Forward Estimates for
Concentrate Price and Foreign Exchange
Period |
Realised Li2O |
|
Exchange rate |
|
Realised Li2O |
|
Realised Ta2O5 |
|
US$/dmt |
|
AUD:USD |
|
A$/dmt |
|
A$/dry lb |
|
H2 CY23 |
4,048 |
|
0.70 |
|
5,783 |
|
34.72 |
|
CY24 |
2,074 |
|
0.70 |
|
2,963 |
|
34.72 |
|
CY25 |
1,425 |
|
0.70 |
|
2,036 |
|
34.72 |
|
CY26 |
2,375 |
|
0.70 |
|
3,393 |
|
34.72 |
|
CY27 |
2,103 |
|
0.70 |
|
3,004 |
|
34.72 |
|
CY28 |
1,762 |
|
0.70 |
|
2,517 |
|
34.72 |
|
H1 CY29 |
1,486 |
|
0.70 |
|
2,123 |
|
34.72 |
|
The cashflow model was also tested at a
conservative realised price of US$1,500/dmt Li2O in the
optimisation, and cashflows remained positive for the overall Ore
Reserve, and on each stage.
____________________________________1 The data
and information provided by Wood Mackenzie should not be
interpreted as advice and you should not rely on it for any
purpose. You may not copy or use this data and information except
as expressly permitted by Wood Mackenzie in writing. To the fullest
extent permitted by law, Wood Mackenzie accepts no responsibility
for your use of this data and information except as specified in a
written agreement you have entered into with Wood Mackenzie for the
provision of such of such data and information.
Economic evaluation
An economic evaluation was conducted by
consultants Entech Mining using financial data sourced from Allkem,
independent market analysis, and competitive tender.
Project economics for all of Stage 4 is forecast
to generate a NPV of US$1.2B (A$1.7B) when evaluated with the
prices in Table 4. Economics will be updated following approval to
proceed with stage 4-2 or as an underground option
As an existing operation, Mt Cattlin requires
only minor initial capital expenditure to support the Stage 4
expansion, and low total project capital requirements of
approximately US$80m (A$115m). This will be funded from operating
cashflow.
The economic model calculates Net Present Value (NPV) at a
discount rate of 10% over the LOM from 31 March 2023. The NPV is
based on financial model period cashflows, without allowance for
taxation, depreciation, or financing provisions. The summary of
this is shown in Table 5.
Table 5: Summary of Mt Cattlin Project
Economics
Parameter |
Unit |
Stage 3 |
Stage 4-1 |
Stage 4-2 |
ClosureStockpiles |
|
Total |
Product Produced |
Mt |
0.4 |
0.2 |
0.3 |
0.1 |
|
1.0 |
Life-Of-Mine Revenue |
A$B |
1.8 |
0.5 |
1.0 |
0.3 |
|
3.5 |
Life-Of-Mine Total Expenditure |
A$B |
0.4 |
0.4 |
0.6 |
0.2 |
|
1.5 |
Life-Of-Mine Free Cashflow |
A$B |
1.4 |
0.1 |
0.4 |
0.1 |
|
2.0 |
Free Cashflow Margin |
% |
80% |
22% |
37% |
36% |
|
57% |
Life-Of-Mine NPV |
A$B |
1.4 |
0.1 |
0.2 |
0.1 |
|
1.7 |
Sensitivity analysis
Sensitivity analysis was conducted on the following variables
(+/-20%) and quantified with the NPV outputs:
- Revenue factors:
spodumene concentrate price, currency exchange rate and plant
recovery
- Cost factors:
mining operating costs and processing operating costs
The results are graphically summarised in Figure
4. The outputs show the expected heightened sensitivity from
revenue factors compared to cost factors. The plant recovery and
revenue trends mimic each other, and currency exchange rate (FX) is
the inverse. The cost sensitivity trends of the mining and
processing operating costs mimic each other with mining being
somewhat influential on cashflow and NPV due to being a larger
overall cost.
Figure 4: NPV Sensitivity to Key Revenue
and Cost Factor Variables
ENDS
This release was authorised by Mr Martin Perez de
Solay, CEO and Managing Director of Allkem Limited.
Allkem LimitedABN 31 112 589 910 Level 35, 71
Eagle StBrisbane, QLD 4000 |
Investor Relations & Media EnquiriesAndrew
Barber M: +61 418 783 701 E:
Andrew.Barber@allkem.coPhoebe LeeP: +61 7 3064
3600 E: Phoebe.Lee@allkem.co |
Connect info@allkem.co+61 7 3064
3600www.allkem.co |
|
|
|
IMPORTANT NOTICES
This investor ASX/TSX release
(Release) has been prepared by Allkem Limited (ACN
112 589 910) (the Company or
Allkem). It contains general information about the
Company as at the date of this Release. The information in this
Release should not be considered to be comprehensive or to comprise
all of the material which a shareholder or potential investor in
the Company may require in order to determine whether to deal in
Shares of Allkem. The information in this Release is of a general
nature only and does not purport to be complete. It should be read
in conjunction with the Company’s periodic and continuous
disclosure announcements which are available at allkem.co and with
the Australian Securities Exchange (ASX)
announcements, which are available at www.asx.com.au.
This Release does not take into account the
financial situation, investment objectives, tax situation or
particular needs of any person and nothing contained in this
Release constitutes investment, legal, tax, accounting or other
advice, nor does it contain all the information which would be
required in a disclosure document or prospectus prepared in
accordance with the requirements of the Corporations Act 2001 (Cth)
(Corporations Act). Readers or recipients of this
Release should, before making any decisions in relation to their
investment or potential investment in the Company, consider the
appropriateness of the information having regard to their own
individual investment objectives and financial situation and seek
their own professional investment, legal, taxation and accounting
advice appropriate to their particular circumstances.
This Release does not constitute or form part of
any offer, invitation, solicitation or recommendation to acquire,
purchase, subscribe for, sell or otherwise dispose of, or issue,
any Shares or any other financial product. Further, this Release
does not constitute financial product, investment advice (nor tax,
accounting or legal advice) or recommendation, nor shall it or any
part of it or the fact of its distribution form the basis of, or be
relied on in connection with, any contract or investment
decision.
The distribution of this Release in other
jurisdictions outside Australia may also be restricted by law and
any restrictions should be observed. Any failure to comply with
such restrictions may constitute a violation of applicable
securities laws.
Past performance information given in this
Release is given for illustrative purposes only and should not be
relied upon as (and is not) an indication of future
performance.
Forward Looking Statements
Forward-looking statements are based on current
expectations and beliefs and, by their nature, are subject to a
number of known and unknown risks and uncertainties that could
cause the actual results, performances and achievements to differ
materially from any expected future results, performances or
achievements expressed or implied by such forward-looking
statements, including but not limited to, the risk of further
changes in government regulations, policies or legislation; the
risks associated with the continued implementation of the merger
between the Company and Galaxy Resources Ltd, risks that further
funding may be required, but unavailable, for the ongoing
development of the Company’s projects; fluctuations or decreases in
commodity prices; uncertainty in the estimation, economic
viability, recoverability and processing of mineral resources;
risks associated with development of the Company Projects;
unexpected capital or operating cost increases; uncertainty of
meeting anticipated program milestones at the Company’s Projects;
risks associated with investment in publicly listed companies, such
as the Company; and risks associated with general economic
conditions.
Subject to any continuing obligation under
applicable law or relevant listing rules of the ASX, the Company
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements in this Release to
reflect any change in expectations in relation to any
forward-looking statements or any change in events, conditions or
circumstances on which any such statements are based. Nothing in
this Release shall under any circumstances (including by reason of
this Release remaining available and not being superseded or
replaced by any other Release or publication with respect to the
subject matter of this Release), create an implication that there
has been no change in the affairs of the Company since the date of
this Release.
Competent Person Statement
The information in this announcement that
relates to Exploration Results and Mineral Resources is based on
information compiled by Albert Thamm, B.Sc. (Hons)., M.Sc.
F.Aus.IMM (203217), a Competent Person who is a Fellow of The
Australasian Institute of Mining and Metallurgy. Albert Thamm is a
full-time employee of Galaxy Resources Pty. Limited. Albert Thamm
has sufficient experience that is relevant to the style of
mineralization and type of deposit under consideration and to the
activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves’. Albert
Thamm consents to the inclusion in this announcement of the matters
based on his information in the form and context in which it
appears.
The information in this announcement that
relates to the 31 March 2023 Mt Cattlin Ore Reserve is based on
information compiled by Daniel Donald, B. Eng. (Mining), F.Aus.IMM
(210032), a Competent Person who is a Member of the Australasian
Institute of Mining and Metallurgy. Daniel Donald is an employee
working for Entech Mining Pty Ltd and has been engaged by Allkem
Limited to prepare the documentation for the Mt Cattlin operation
on which the Ore Reserve Report is based, for the period ended 31
March 2023, and has sufficient experience that is relevant to the
style of mineralization and type of deposit under consideration and
to the activity being undertaken to qualify as a Competent Person
as defined in the 2012 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Daniel Donald consents to the inclusion in this
announcement of the matters based on his information in the form
and context in which it appears.
Technical information relating to the Company’s
Mt Cattlin project contained in this release is derived from, and
in some instances is an extract from, the technical report entitled
“Mt Cattlin Ore Reserve Estimate, March 31, 2023“ (Technical
Report) which has been reviewed and approved by Albert Thamm,
F.Aus.IMM (who is an employee of Galaxy Resources Pty. Ltd) as it
relates to geology, drilling, sampling, exploration, QA/QC and
mineral resources and Daniel Donald F.Aus.IMM (an employee of
Entech Pty Ltd) as it relates to mining methods, Ore Reserves, site
infrastructure, capital cost, operating cost estimates, , mining
cost, financial modelling and economic analysis in accordance with
National Instrument 43-101 – Standards for Disclosure for Mineral
Projects. The Technical Report will be filed within 45 days of this
release and will be available for review under the Company’s
profile on SEDAR at www.sedar.com.
Not for
release or distribution
in the United States
This announcement has been prepared for
publication in Australia and may not be released to U.S. wire
services or distributed in the United States. This announcement
does not constitute an offer to sell, or a solicitation of an offer
to buy, securities in the United States or any other jurisdiction,
and neither this announcement or anything attached to this
announcement shall form the basis of any contract or commitment.
Any securities described in this announcement have not been, and
will not be, registered under the U.S. Securities Act of 1933 and
may not be offered or sold in the United States except in
transactions registered under the U.S. Securities Act of 1933 or
exempt from, or not subject to, the registration of the U.S.
Securities Act of 1933 and applicable U.S. state securities
laws.
APPENDIX 1 – JORC 2012 TABLE 1
DISCLOSURE
Section 1: Sampling Techniques and
Data
MT CATTLIN LITHIUM PROJECT SAMPLING
AND DATA |
Sampling techniques |
Nature and quality of sampling (e.g. cut channels, random
chips, or specific specialized industry standard measurement tools
appropriate to the minerals under investigation, such as down hole
gamma sondes, or handheld XRF instruments, etc.). These examples
should not be taken as limiting the broad meaning
of sampling. Include reference to measures taken to
ensure sample representivity and the appropriate
calibration of any measurement tools or systems used.
Aspects of the determination of mineralization that are
Material to the Public Report. In cases where ‘industry
standard’ work has been done this would be relatively simple
(e.g. ‘reverse circulation drilling was used to obtain 1 m
samples from which 3 kg was pulverized to produce a 30 g charge for
fire assay’). In other cases more explanation may be
required, such as where there is coarse gold that has inherent
sampling problems. Unusual commodities or mineralization types
(e.g. submarine nodules) may warrant disclosure of
detailed information. |
Pre-2017 Mt Catlin mineralization was
sampled using a mixture of Diamond (DD) Reverse Circulation drill
holes (RC), rotary Air Blast (RAB) and Open Hole (OH). In the north
zone drilling is a 40mE x 40mN spacing and infilled to 20mE to 25mE
x 20mN to 20mN in the central zone. In the south the drilling is on
a 40mE x 80mN pattern. Drill holes were drilled vertical to
intersect true thickness of the spodumene mineralization. A
total of 39 DD holes for 1,528.56m, 986 RC holes for
48,763m,59 OH holes for 1,999m and 23 RAB for 402m had been completed
before 2017. The drill-hole collars were surveyed by
professional survey contractors. A total of 71 drill holes were
surveyed by Surtron Technologies Australia
of Welshpool in 2010. Sampling was carried out under
Galaxy Resources QAQC protocols and as per industry best
practice. RC sample returns were closely monitored, managed
and recorded. Drill samples were logged for lithology and SG
measurements. Diamond HQ and PQ core was quarter-cored to
sample lengths relating to the geological boundaries, but not
exceeding 1m on average. RC samples were composited from 1m drill
samples split using a two-stage riffle splitter 25/75 to obtain 2kg
to 4kg of sample for sample preparation. All samples were dried,
crushed, pulverized and split to produce a 3.5kg and then 200g
sub-sample for analysis For Li (method AAS40Q), for Ta, Nb and Sn
(method XRF78O) and in some cases for SiO2, Al2O3, CaO, Cr2O3,
Fe2O3, K2O3, MgO, MnO, P2O5, SO3, TiO2 and V2O5 were analysed by
XRF78O. Entire drill-hole lengths were submitted for
assay. Drilling 2017-8 From 1m
of drilling and sampling, two 12.5% splits are taken by a static
cone splitter in calico drawstring bags. This obtains two 2kg to
4kg samples with one being retained as an archive sample and the
other submitted for assay, where required an archive bag is used as
the duplicate sample. A 4.5-inch diameter rod string
is used and the cyclone is cleaned at the end of every 6m
rod as caking occurs from the mandatory use of dust suppression
equipment. Drilling November 2018 –
2021 Subsequent to 2018 update, 5,912m (41
holes) of new reverse circulation (RC) and 273.65m of
diamond tails (2 holes) has been completed
(excluding metallurgical and geotechnical) has taken place. From 1m
of drilling and sampling, two 12.5% splits are taken by a static
cone splitter in calico drawstring bags. This obtains two 2kg to
4kg samples with one being retained as an archive sample and the
other submitted for assay, where required an archive bag is used as
the duplicate sample. A 4.5-inch diameter rod string
is used and the cyclone is cleaned at the end of every 6m
rod as caking occurs from the mandatory use of dust suppression
equipment. 2022 Drilling The current
drillhole dataset for the project contains 3,232 drillholes, for
175,950 metres, comprised of a combination of reverse circulation
(RC), diamond drilling (DD), and RC with a diamond tail (RC_DDT)
drillholes. The dominant drillhole type is RC, with over 95% of the
metres being from RC drillholes. |
|
|
Hole_Type |
Count |
Metres |
% Drillholes |
% Metres |
|
|
DDH |
45 |
5,437.8 |
1.4% |
3.1% |
|
|
RC |
3,173 |
169,037.8 |
98.2% |
96.1% |
|
|
RC_DDT |
14 |
1,474.4 |
0.4% |
0.8% |
|
|
TOTAL |
3,232 |
175,950 |
100% |
100% |
|
|
|
|
|
|
|
Drilling techniques |
Drill type (e.g. core, reverse circulation, open-hole hammer,
rotary air blast, auger, Bangka, sonic, etc.) and details (e.g.
core diameter, triple or standard tube, depth of diamond tails,
face-sampling bit or other type, whether core is oriented and if
so, by what method, etc.). |
RC drilling hammer diameter was generally 4 & 5/8 inches in
early exploration, from 2009 and 2010 the bit diameter was 5 ¼
inches. RC 2017 -2020 5.25-inch
face sampling hammer, reverse circulation, truck mounted or tracked
drilling rigs, Three Rivers Drilling, Castle Drilling.
Diamond core is generally RC from surface, and either PQ size tails
in weathered rock and narrowed to HQ in fresh
rock (standard tubing). Core was not oriented as the
disseminated and weathered nature of the mineralization does not
warrant or allow it. Diamond core is typically for
metallurgical test-work. Pre-collars drilled short
of mineralisation. RC 2021 A 5.25-inch
face sampling hammer, used in reverse circulation. ASX (Australian
Surface Exploration) drillers used for RC (including pre-collars).
Diamond 2021: Wizard Drilling utilised for
diamond drilling from surface. HQ size Metallurgical and
geotechnical diamond drilling (standard
tubing). Two Metallurgical holes were diamond tails from
approximately 70m to 80m. Four Geotechnical holes
were diamond from surface and two tails from 50-60m depth.
RC 2022 PXD drilling was utilised for RC
drilling from surface. HQ size Metallurgical
and geotechnical diamond drilling (standard tubing) by Orlando
Drilling. Four Metallurgical holes were and three Geotechnical
holes were diamond drilled from surface and two diamond tails from
150-160m depth. |
Logging |
Whether core and chip samples have been geologically and
geotechnically logged to a level of detail to support appropriate
Mineral Resource estimation, mining studies and
metallurgical studies. Whether logging is qualitative or
quantitative in nature. Core (or costean, channel,
etc.) photography. The total length and percentage of
the relevant intersections logged. |
All DD, RC and OH (PC) and RAB intervals were geologically logged
(where applicable); RQD (DD only), interval weights, recovery,
lithology, mineralogy and weathering were recorded in the
database. The DD core was oriented using the Ezy-Mark
tool and after 2019 using the Reflex ACT electronic
orientation tool. Geological logging was qualitative.
Recording of interval weights, recovery and RQD was
quantitative. All DD core was photographed and representative
1m samples of RC and OH (PC) chips were collected in chip trays for
future reference and photographed. All drill holes were logged
in full. 2017-2023 logging All drill
holes are logged and validated via LogChief/ Maxwells
Geosciences/DataShed systems. Assays, standards and
control limits are monitored after loading of each batch and
reports supplied on demand. All drill holes are logged in
full. Different Lithium bearing mineral species are
logged in detail. |
Sub- sampling techniques and sample
preparation |
If core, whether cut or sawn and whether quarter, half or all
core taken. If non-core, whether riffled, tube sampled,
rotary split, etc. and whether sampled wet or dry. For
all sample types, the nature, quality and appropriateness of the
sample preparation technique. Quality control procedures
adopted for all sub-sampling stages
to maximise representivity of samples.
Measures taken to ensure that the sampling is representative of
the in situ material collected, including for instance
results for field duplicate/second-half sampling.
Whether sample sizes are appropriate to the grain size of the
material being sampled. |
Pre-2016 sampling All fresh rock DD core
was quarter-cored using a stand mounted brick
saw. Soft, weathered DD core was also sampled quarter-core,
using a knife and scoop where applicable and practical. RC samples
were collected using a two stage riffle splitter. All
samples were dry or dried prior to riffle-splitting. All 2kg
1m drill samples were sent to SGS, dried, crushed, pulverized and
split to approximately -75µ to produce a sample less than 3.5kg
sub-sample for analysis. Sampling was carried out under
Galaxy Resources QAQC protocols and as per industry best
practice. Duplicate, blank and standard reference
samples were inserted into the sample stream at random,
but averaging no less than 1 blank and standard in every 25
samples. Samples were selected periodically and screened to
ensure pulps are pulverized to the required specifications.
Duplicate quarter-core samples were taken from DD core at random
for testing averaging one in every 25 samples. Duplicate
riffle-split RC samples were taken at random,
but averaging one every approximately 25 samples. The
sample sizes are appropriate to the style, thickness and
consistency of the mineralization at Mt Catlin.
Drilling 2016 (SGS) Core was
halved by saw and sample lengths typically 0.5m in
length. Sample
preparation involved crushing followed by splitting
of sample if sample greater than 3 kg using a riffle splitter
(SPL26), Dry sample, crush to 6mm, pulverise to 75µm (PRP88)
in a LM5 Mill. Drilling 2017-2021
Diamond drilling was typically sawn half core with whole
core used for metallurgical test work. Intertek
(2017-8) Samples are sorted and weighed. Samples
>3kg are riffle split and milled in LM5 to obtain 85% passing 75
Microns. A 400g pulp is taken and a nominal 0.25g sub-sample is
fused with sodium peroxide.
Nagrom: 2018-2021 RC chips are
dried to 105C°, crushed to nominal top-size of 2 mm in a Terminator
Jaw crusher using method CRU01. Pulverised up to 3 kg in a
LM5 pulveriser mill at 80% or better passing 75µm, using
method PUL01. If the sample is greater than 3 kg, the sample
is dried, and split with rotary splitter before
analysis, Diamond core is dried, crushed in a Terminator Jaw
crusher to top size 6.3 mm, and pulverised in a LM5 mill
up to 2.5 kg using method CRU01. If the sample is greater
than 2.5 kg, the sample is riffle split after drying to reduce the
sample size. Intertek 2022-3 Samples are sorted
and weighed. Samples >3kg are riffle split and milled in LM5 to
obtain 85% passing 75 Microns. A 400g pulp is taken and a nominal
0.25g sub-sample is assayed by Sodium peroxide fusion in a Ni
crucible / MS, OES method FP6-Li/OM19. |
Quality of assay data and laboratory
tests |
The nature, quality and appropriateness of the assaying and
laboratory procedures used and whether the technique is considered
partial or total. For geophysical tools, spectrometers,
handheld XRF instruments, etc., the parameters used in determining
the analysis including instrument make and model, reading times,
calibrations factors applied and their derivation, etc.
Nature of quality control procedures adopted (e.g. standards,
blanks, duplicates, external laboratory checks) and whether
acceptable levels of accuracy (i.e. lack of bias) and precision
have been established. |
Pre-2016 QAQC
All samples were dried, crushed, pulverized and split to produce a
3.5kg and then 200g sub-sample for analysis For Li (method AS40Q),
for Ta, Nb and Sn (method XRF78O) and in some cases for SiO2,
Al2O3, CaO, Cr2O3, Fe2O3, K2O3, MgO, MnO, P2O5, SO3, TiO2 and V2O5
were analysed by XRF78O. This process involves fusing the sample in
a platinum crucible using lithium metaborate/tetraborate flux. For
Cs, Rb, Ga, Be and Nb from time to time analysis was by IMS40Q –
DIG40Q to ICPMS end.
Duplicate, blank and certified reference samples were inserted into
the sample stream at random, but averaging one every
~25 samples. Galaxy Resources utilized certified Lithium
standards produced in China and one from SGS in
Australia, STD-TAN1. Inter-laboratory checking of
analytical outcomes was routinely undertaken to ensure continued
accuracy and precision by the preferred laboratory. Samples
were selected periodically and screened by the laboratory to ensure
pulps are pulverized to the required specifications. All QAQC data
is stored in the Mt Catlin database and regular studies were
undertaken to ensure sample analysis was kept within acceptable
levels of accuracy; the studies confirmed that accuracy and
precision are within industry standard accepted limits.
Umpire analysis performed on pulps at Genalysis and Ultratrace
Perth 2016-QAQC In 2016 Perth SGS were
used for a small 6 hole diamond program by
General Mining. Samples were digested using a sodium peroxide
fusion digest, method DIG90Q and the resultant solution from the
digest was then presented to an ICP-MS for the quantification of
Li2O, using method IMS40Q. The majority of standards
submitted performed within expected ranges with a positive bias
observed for two standards. 2017 - 2021
QAQC Samples (including QA/QC samples) were processed by
Intertek PLC, Perth laboratory in 2017 and 2018, by utilised method
FP1 digest (Peroxide Fusion – complete), MS analytical finish, 22
elements, Li2O detection limit 0.03% Ta2O5 detection limit, 0.2
ppm. Monthly review of QA/QC, which includes blanks, field
duplicates, high grade standards and CRM (certified reference
materials) and SRM (standard reference materials).
FS_ICPMS is a Laboratory Method FP1/MS (mass
spectrometry) used to analyse for Cs, Nb, Rb, Ta,Th, and U .
FS/ICPES (inductively coupled plasma emission spectroscopy) is
Laboratory method FP1/OE used to analyse Al, Fe, K, Li, and Si.
Reports include calculated values of oxides for all elements.
RC samples and diamond (including QA/QC samples) have been
processed by Nagrom Perth, Perth Western Australia. Methods
utilised from Lithium and Tantalum are ICP004 and ICP005 (Peroxide
Fusion – complete). ICP005 utilises tungsten carbide bowl
to reduce iron contamination at exploration and resource
development stages (detection limit of 10ppm and 1ppm for Li2O and
Ta respectively) Monthly review of QA/QC, which includes blanks,
field duplicates, high grade standards and CRM (certified reference
materials) and SRM (standard reference materials). All
sampling has rigorous QAQC in terms of reference sampling as well
as blank and standards introduced into the sample steam.
Duplicate field samples show some evidence of high nugget effect.
Typically, duplicate pairs plot within acceptable limits. Field
duplicates have been submitted at a rate of 1 per
20.5 samples. Standards used are ASM0343, ASM0340 AMIS0339,
OREAS147, OREAS148 and OREAS149. Standards reported only one
result outside three standard deviations from 533 assays for
Lithium. The majority of Tantalum standards reported
within three standard deviations. Coarse blanks have shown no
evidence of systematic contamination from 2016-2021 with results
consistently low. QAQC in 2022-3 is broadly in line with the
processes above, assays are by Intertek, Perth and Kalgoorlie.
Standards used are OREAS 147, AMIS0341, OREAS 751, OREAS 753,
OREAS 148, AMIS0341, AMIS0341, and OREAS 147 to support Sodium
peroxide fusion in Ni crucible assay method MS, OES FP6-Li/OM19.
This method provides near complete recovery for most samples. Ore
grade standards e.g. Oreas 751 reported only four results outside 2
standard deviations from assays for Lithia. The majority of
Tantalum standards reported within 2 standard deviations. A figure
accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a0a96d56-0609-4c98-a4b7-54a5abe86952
The data is moderately precise. |
Verification of sampling and assaying |
The verification of significant intersections by either independent
or alternative company personnel. The use of
twinned holes. Documentation of primary data, data entry
procedures, data verification, data storage (physical and
electronic) protocols. Discuss any adjustment to
assay data. |
Pre-2018 Verification An external geological
consultant and staff have visually assessed and verified
significant intersections of core and RC and PC chips.
Several core holes were compared to neighbouring RC and PC drill
holes. The geological logging of the DD holes supports the
interpreted geological and mineralization domains. Studies on
assays results from twinned holes showed a close correlation of
geology and assays. Primary data is recorded by hand in the
field and entered Excel spread sheets with in-built validation
settings and look-up codes. Scans of field data sheets and
digital data entry spread sheets are handled on site at Mt
Cattlin. Data collection and entry procedures
are documented, and training given to all staff.
QAQC checks of assays had identified several standards out of
control, these were subsequently reviewed and results
rectified. No clear and consistent biases were defined by
Galaxy during the further investigations into QAQC performances
although deviations were noted by Galaxy. 2017-8
Verification CP independently verified drilling,
sampling, assay and results from validated, externally maintained
and stored database. No adjustments to assay data other than
conversion from Li to Li20 and Ta to Ta2O5. 2018 - 2022
Verification The CP independently verified drilling,
sampling, assay and results from validated, externally maintained
and stored database. No adjustments to assay data other than
conversion from Li to Li20 and Ta to Ta2O5. Primary data
capture by Maxwell LogChief and management by
Maxwell DataShed. Assay data loaded directly from
Laboratory supplied .csv files as are downhole and collar surveys.
An independent data verification was completed as part of a 2021
Ni-43-101 filing by then competent person. Data exported from SQL
database and verified by the CP. No adjustments are made to assay
data. |
Section 2: Reporting of Exploration
Results
Criteria |
JORC Code explanation |
Commentary |
Mineral tenement and land tenure
status |
- Type, reference name/number, location and ownership including
agreements or material issues with third parties such as joint
ventures, partnerships, overriding royalties, native title
interests, historical sites, wilderness or national park and
environmental settings.
- The security of the tenure held at the time of reporting along
with any known impediments to obtaining a license to operate in
the area.
|
Mining Lease M74/244 was amalgamated and awarded on 04/08/2009 and
is valid until 23/12/2030 and covers 1830 Ha. The project is
subject to normal projects approvals processes as regulated by the
WA Department of Mines, Industry and Regulation. The tenement is
subject to the Standard Noongar Heritage agreement as executed 7
February 2018. The underlying land is a mixture of freehold
property and vacant Crown land. The property Freehold title is held
by Galaxy Resources or its child subsidiaries. |
Exploration done by other parties |
- Acknowledgment and appraisal of exploration by other
parties.
|
During the 1960’s WMC carried out an extensive drilling program to
define the extent of local spodumene bearing pegmatite. The WMC
work led onto a further investigation into project
feasibility. In 1989 Pancontinental Mining, Limited drilled
101 RC drill holes. In 1990 Pancontinental drilled a further 21 RC
drill holes. In 1997 Greenstone Resources drilled 3 diamond
holes and 38 RC holes, undertook soil sampling and metallurgical
test work on bulk samples from the mine area.Haddington Resources
Ltd in 2001 drilled 9 diamond holes for metallurgical test work and
undertook further sterilization drilling. Galaxy acquired the
M72/12 mining tenement from the Sons of Gwalia administrators in
2006. |
Geology |
- Deposit type, geological setting and style of
mineralization.
|
The Mount Catlin Project lies within the Ravensthorpe Suite, with
host rocks comprising both the Annabelle Volcanics to the
west, and the Manyutup Tonalite to the east. The contact between
these rock types extends through the Project area. The
Annabelle Volcanics at Mt Cattlin consist of intermediate
to mafic volcanic rocks, comprising both pyroclastic material and
lavas. The pegmatites which comprise the orebodies occurs as a
series of sub- horizontal sills, hosted by both volcanic and
intrusive rocks, interpreted as a series of westward verging
thrusts. Typical coarse grained spodumene (grey green colour) from
the NW pegmatite shown below.A photo accompanying this announcement
is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/f75c30db-a3c7-4a94-b77e-7e2fe8863892
|
Drill hole Information |
- A summary of all information material to the understanding of
the exploration results including a tabulation of the following
information for all Material drill holes:
- easting and northing of the drill hole collar
- elevation or RL (Reduced Level – elevation above sea level in
meters) of the drill hole collar
- dip and azimuth of the hole
- down hole length and interception depth
- hole length.
|
Pre-2017 drilling reported 4 August 2015 by subsidiary GMM
(ASX:GMM). Last prior resource and update was 28
November 2018 2019-2022 drill
collars New resource development collar information
is presented in Appendices
below.Holes generally inclined between -75 to
-80 degrees to determine true width or due to local
infrastructure. |
Data aggregation
methods |
- In reporting Exploration Results, weighting averaging
techniques, maximum and/or minimum grade truncations
(e.g. cutting of high grades) and cut-off grades are
usually Material and should be stated.
- Where aggregate intercepts incorporate short lengths
of high grade results and longer lengths of low grade
results, the procedure used for such aggregation should be stated
and some typical examples of such aggregations should be shown
in detail.
- The assumptions used for any reporting of metal equivalent
values should be clearly stated.
|
Pre-2017 Data Where higher grade zones
internal to broader intervals of lower grade mineralization were
reported, these were noted as included intervals and
italicized. 2019-2022 Drilling New
results are reported to a 0.3% cut-of grade (below), minimum 4m
width, maximum 1m internal dilution. Only drillholes
incorporated into the resource model are reported. No metal
equivalent values are used. |
Relationship between mineralization widths and intercept
lengths |
- These relationships are particularly important in the reporting
of Exploration Results.
- If the geometry of the mineralization with respect to the
drill hole angle is known, its nature should
be reported.
- If it is not known and only the down hole lengths are reported,
there should be a clear statement to this effect (eg ‘down
hole length, true width not known’).
|
All intersection grades have been reported previously as length
weighted average grades using a 0.3% Li2O lower grade cut-off
except where stated. Intersections were calculated allowing a
maximum of 2m of internal dilution with no top-cut applied. Cutting
of high grades is not required due to nature of the mineralization
and grade distribution/estimation. The Mt Cattlin lithium and
tantalum mineralization occurs as a thick horizontal to gently
dipping pegmatite and generally lies 30 to 280m below the current
topographic surface resulting in drill intercepts nearing true
widths. All reported intersections in 2023 are approximate true
widths. |
Diagrams |
- Appropriate maps and sections (with scales) and tabulations of
intercepts should be included for any significant discovery being
reported These should include, but not be limited to a plan view of
drill hole collar locations and appropriate sectional
views.
|
Diagrams are included in the text above. |
Balanced reporting |
- Where comprehensive reporting of all Exploration Results is not
practicable, representative reporting of both low and high
grades and/or widths should be practiced to
avoid misleading reporting of
Exploration Results.
|
All significant intersections above 0.3% Li2O have been fully
reported in previous releases. 2019-2022
Drilling Drill hole collars and relevant assay
details are appended below. |
Other substantive exploration data |
- Other exploration data, if meaningful and material, should be
reported including (but not limited to): geological observations;
geophysical survey results; geochemical survey results;
bulk sample– size and method of treatment; metallurgical test
results; bulk density, groundwater, geotechnical and rock
characteristics; potential deleterious or contaminating
substances.
|
Fe2O3 is modelled with Li and Ta to determine the effect of
deleterious chemistry and mineralogy at or near pegmatite contacts
and rafts of surrounding country rock with pegmatite. |
Further work |
- The nature and scale of planned
further work (eg tests for lateral extensions or depth
extensions or large-scale step-out drilling).
- Diagrams clearly highlighting the areas of possible extensions,
including the main geological interpretations and future drilling
areas, provided this information is not
commercially sensitive.
|
Development and extraction of the NW Pit Mineral Resource and
Reserve.Diagrams are illustrated in the text above.Feasibility
study work to trade off open pit vs underground options has
commenced. |
Section 3: Estimation and Reporting of
Mineral Resources – Mt Cattlin
Criteria |
JORC Code explanation |
Commentary |
Database integrity |
- Measures taken to ensure that data has not been corrupted by,
for example, transcription or keying errors, between its initial
collection and its use for Mineral Resource estimation
purposes.
- Data validation procedures used.
|
Pre-2017 At the time of the 2012 Mineral Resource
estimates, Allkem had appointed a data administrator to manage and
host the Mt Catlin database in a GBIS SQL database. Field data was
entered into project-specific password-protected spread sheets with
in-built auto-validation settings. The spread sheets were emailed
to head office on a weekly basis and then passed on to the data
administrator, where all data was subject to validation procedures
and checks before being imported into the central database. Invalid
data was not imported into the central database but was quarantined
until corrected. Data exports were routinely sent from head office
to site for visual validation using ArcGIS and Micromine.
2017 to Jan 2019 Database and data QAQC processes
was re-established after review in 2016. The Datashed database was
managed/maintained by Maxwell Geoservices and was validated
externally to GXY and aggregated meta-data from site and the sample
laboratory. The assay laboratory reported sample validation and
checks on arrival. Database managers’ reported both QAQC and
validation checks monthly and upon request. Jan 2019 to
Current Allkem have employed a Database Administrator who
loads all data, manages the database and performs routine
validations on all loaded data. All logging is undertaken on a
Toughbook using the dedicated LogChief logging system matched to
the Datashed database. Visual validation of drilling data versus
the wireframes in Surpac software is undertaken routinely by Mine
Geology and Exploration personnel. |
Site visits |
- Comment on any site visits undertaken by the Competent Person
and the outcome of those visits.
- If no site visits have been undertaken indicate why this is the
case.
|
The reporting CP has completed several site visits since 2016. |
Geological interpretation |
- Confidence in (or conversely, the uncertainty of) the
geological interpretation of the mineral deposit.
- Nature of the data used and of any assumptions made.
- The effect, if any, of alternative interpretations on Mineral
Resource estimation.
- The use of geology in guiding and controlling Mineral Resource
estimation.
- The factors affecting continuity both of grade and
geology.
|
The geological interpretation is considered robust due to the
nature of the geology and mineralisation. Surface diamond and
reverse circulation (RC) drillholes have been logged for lithology,
structure, and alteration and mineralisation data. The lithological
logging of pegmatite in combination with the Li2O, Fe2O3 and MgO
assays, including grain size and mineralogical differentiation,
have been used to guide the sectional interpretation of the
pegmatites in Leapfrog Geo modelling software. The geological
wireframes have then been used as a boundary within which internal,
mineralisation wireframes have been generated in Leapfrog software
using geology logging and assay data. The primary assumption is
that the mineralisation is hosted within the fine-grained material
within the pegmatite sills, which is considered robust. Weathering
surfaces have been updated by Allkem Resources in Leapfrog Geo
software for recently completed drillholes. Due to the consistent
nature of the pegmatite identified in the area, no alternative
interpretations have been considered. The pegmatites are found to
be continuous over the area of the deposit. The Li2O%
mineralisation interpretations are contained wholly within the
pegmatite geological units. Evidence of late-stage faulting is
present and has, where appropriate, been incorporated into the
geological model. |
Dimensions |
- The extent and variability of the Mineral Resource expressed as
length (along strike or otherwise), plan width, and depth below
surface to the upper and lower limits of the Mineral Resource
|
The Mt Cattlin pegmatites strike north-south and are typically
between 10 m and 30 m wide and are typically flat-lying
or with a subtle dip east of around 5 to 10 degrees. Several
different pegmatites have been identified, either as separate
intrusions or due to fault offsets, over a strike length of
1,300 m, an across strike extent of 1,700 m and down to a
depth of greater than 300 m below surface. Thirteen pegmatites
have been identified to date in the NW and SW area. They range in
extent from 50 m along strike and 50 m down-dip to
650 m along-strike and 500 m down-dip. The pegmatites
range in thickness from a few metres to 20 m. |
Estimation and modelling techniques |
- The nature and appropriateness of the estimation technique(s)
applied and key assumptions, including treatment of extreme grade
values, domaining, interpolation parameters and maximum distance of
extrapolation from data points. If a computer assisted estimation
method was chosen include a description of computer software and
parameters used.
- The availability of check estimates, previous estimates and/or
mine production records and whether the Mineral Resource estimate
takes appropriate account of such data.
- The assumptions made regarding recovery of by-products.
- Estimation of deleterious elements or other non-grade variables
of economic significance (e.g. sulphur for acid mine drainage
characterisation).
- In the case of block model interpolation, the block size in
relation to the average sample spacing and the search
employed.
- Any assumptions behind modelling of selective mining
units.
- Any assumptions about correlation between variables
- Description of how the geological interpretation was used to
control the resource estimates.
- Discussion of basis for using or not using grade cutting or
capping.
- The process of validation, the checking process used, the
comparison of model data to drillhole data, and use of
reconciliation data if available.
|
Grade estimation for Li2O%, Fe2O3% and Ta2O5 ppm has been completed
using Ordinary Kriging (OK) into pegmatite domains using Datamine,
Studio RM software. Grade estimation of Fe2O3% has been completed
using OK into the encapsulating mafic waste and late-stage mafic
dyke, which intersects the pegmatites. The geological,
mineralisation and weathering wireframes generated have been used
to define the domain codes by concatenating the three codes into
one. The drillholes have been flagged with the domain code and
composited using the domain code to segregate the data. Hard
boundaries have been used at all domain boundaries for the grade
estimation Pegmatite waste wireframing using <0.3% lithia and
< 4% Na2O. Compositing has been undertaken within domain
boundaries at 1m with a merge tolerance of 0.1 m. Top cuts for all
elements have been assessed for all mineralised and un-mineralised
pegmatite domains, as well as for the external waste and mafic dyke
domains, with only those domains with extreme values having been
top cut. The top cut levels have been determined using a
combination of histograms, log probability and mean-variance plots.
Two domains have been top cut for Li2O. Three domains have been
top-cut for or Ta2O5 ppm and no top-cutting completed in Fe2O3%.
Variography has been completed in Supervisor 8.14 software on an
individual domain basis. Domains with too few samples have borrowed
variography. No assumptions have been made regarding the recovery
of any by-products. The drillhole data spacing ranges from
40 m by 40 m resource definition drillhole spacing out to
an 80 m by 80 m exploration spacing. The block model
parent block size is 20 m (X) by 20 m (Y) by 5 m
(Z), which is considered appropriate for the dominant drillhole
spacing used to define the deposit. A sub-block size of 2.5 m
(X) by 2.5 m (Y) by 0.625 m (Z) has been used to define
the mineralisation edges, with the estimation undertaken at the
parent block scale.
- Pass 1 estimations have been undertaken using a minimum of 7
and a maximum of 27 samples into a search ellipse set at
approximately half of the variogram range. A 4 sample per drillhole
limit has been applied in all pegmatite domains.
- Pass 2 estimations have been undertaken using a minimum of 7
and a maximum of 27 samples into a search ellipse set at
approximately the variogram range. A 4 sample per drillhole limit
has been applied in all pegmatite domains.
- Pass 3 estimations have been undertaken using a minimum of 2
and a maximum of 24 samples into a search ellipse set at four times
the Search 2 range.
The Mineral Resource estimate has been validated using visual
validation tools combined with volume comparisons with the input
wireframes, mean grade comparisons between the block model and
composite grade means and swath plots comparing the composite
grades and block model grades by Northing, Easting and RL. Mining
reconciliation data for the NW and SW regions is available. No
selective mining units are assumed in this estimate. No correlation
between variables has been assumed. |
Moisture |
- Whether the tonnages are estimated on a dry basis or with
natural moisture, and the method of determination of the moisture
content.
|
Tonnes have been estimated on a dry basis. |
Cut-off parameters |
- The basis of the adopted cut-off grade(s) or quality parameters
applied
|
For the reporting of the Mineral Resource Estimate, a 0.4 Li2O%
cut-off within a USD 1,100 Whittle pit shell has been used. |
Mining factors or assumptions |
- Assumptions made regarding possible mining methods, minimum
mining dimensions and internal (or, if applicable, external) mining
dilution. It is always necessary as part of the process of
determining reasonable prospects for eventual economic extraction
to consider potential mining methods, but the assumptions made
regarding mining methods and parameters when estimating Mineral
Resources may not always be rigorous. Where this is the case, this
should be reported with an explanation of the basis of the mining
assumptions made.
|
A Whittle pit optimisation has been run at 1,100 USD in order to
generate a pit shell wireframe for Mineral Resource reporting
purposes and to meet the RPEEE reporting requirement. The mining
assumptions/parameters applied to the optimisation are:
- Mining Recovery – 93%
- Mining Dilution – 17%
- Li2O% Price/tonne 6% concentrate – USD$1,100
- Li2O% recovery – 75%
- Ta2O5ppm Price/pound concentrate – USD$40
- Ta2O5ppm recovery – 25%
- Transport and port Cost/tonne – AUD$49.68
- State Royalty – 5%
- Processing Cost/tonne – AUD$33.16
- Mining Cost/tonne – AUD$4.29
USD exchange rate of 0.70 Li2O cut-off of 0.4% has been applied in
the Whittle optimisation. Both Inferred and Indicated Mineral
Resource classifications have been utilised in the RPEEE
optimisation. |
Metallurgical factors or assumptions |
- The basis for assumptions or predictions regarding
metallurgical amenability. It is always necessary as part of the
process of determining reasonable prospects for eventual economic
extraction to consider potential metallurgical methods, but the
assumptions regarding metallurgical treatment processes and
parameters made when reporting Mineral Resources may not always be
rigorous. Where this is the case, this should be reported with an
explanation of the basis of the metallurgical assumptions
made.
|
A Li2O% metallurgical recovery of 75% and Ta2O5 ppm recovery of 25%
has been applied during the pit optimisation and generation of the
RPEEE pit shell. |
Environmental factors or assumptions |
- Assumptions made regarding possible waste and process residue
disposal options. It is always necessary as part of the process of
determining reasonable prospects for eventual economic extraction
to consider the potential environmental impacts of the mining and
processing operation. While at this stage the determination of
potential environmental impacts, particularly for a greenfields
project, may not always be well advanced, the status of early
consideration of these potential environmental impacts should be
reported. Where these aspects have not been considered this should
be reported with an explanation of the environmental assumptions
made
|
No environmental factors or assumptions have been incorporated into
this Mineral Resource Estimate since Mt Cattlin is a producing
operation with Environmental approvals and an Environmental
Management Plan in place. |
Bulk density |
- Whether assumed or determined. If assumed, the basis for the
assumptions. If determined, the method used, whether wet or dry,
the frequency of the measurements, the nature, size and
representativeness of the samples.
- The bulk density for bulk material must have been measured by
methods that adequately account for void spaces (vugs, porosity,
etc), moisture and differences between rock and alteration zones
within the deposit,
- Discuss assumptions for bulk density estimates used in the
evaluation process of the different materials.
|
No additional bulk density data has been collected in the NW Area.
As a consequence, the bulk density values determined in the
previous MRE (Nov 2018) have been assigned to the block model. The
bulk densities which have been assigned to the Mineral Resource
block model by lithology and weathering state are: |
|
|
|
|
|
Waste Lithologies |
Oxide |
2.50 |
|
|
Transitional |
2.70 |
|
|
Fresh |
2.86 |
|
Unmineralized |
Oxide |
2.42 |
|
Pegmatite |
Transitional |
2.62 |
|
|
Fresh |
2.78 |
|
Mineralised Pegmatite |
Oxide |
2.47 |
|
|
Transitional |
2.71 |
|
|
Fresh |
2.72 |
|
|
|
|
Classification |
- The basis for the classification of the Mineral Resources into
varying confidence categories
- Whether appropriate account has been taken of all relevant
factors (i.e. relative confidence in tonnage/grade estimations,
reliability of input data, confidence in continuity of geology and
metal values, quality, quantity and distribution of the data).
- Whether the result appropriately reflects the Competent
Person’s view of the deposit.
|
The resource classification has been applied to the MRE based on
the drilling data spacing, grade and geological continuity, quality
of the estimation and data integrity. The classification takes into
account the relative contributions of geological and data quality
and confidence, as well as grade confidence and continuity.
Portions of the deposit which have been estimated in the first two
estimation passes and which have been estimated with a high degree
of confidence, with defined grade continuity, have been classified
as Indicated Mineral Resources. Portions of the deposit that have
been estimated and have a suitable level of drilling to assume
geological continuity of the pegmatite have been classified as
Inferred Mineral Resources. The classification reflects the view of
the Competent Person. |
Audits or reviews |
- The results of any audits or reviews of Mineral Resource
estimates.
|
This 2023 Mineral Resource estimate for Mt Cattlin has been peer
reviewed and validated. Original outputs in Datamine/Studio have
been translated into Dassault/Surpac for further development into
regularised models for the development of diluted models. |
Discussion of relative accuracy/
confidence |
- Where appropriate a statement of the relative accuracy and
confidence level in the Mineral Resource estimate using an approach
or procedure deemed appropriate by the Competent Person. For
example, the application of statistical or geostatistical
procedures to quantify the relative accuracy of the resource within
stated confidence limits, or, if such an approach is not deemed
appropriate, a qualitative discussion of the factors that could
affect the relative accuracy and confidence of the estimate
- The statement should specify whether it relates to global or
local estimates, and, if local, state the relevant tonnages, which
should be relevant to technical and economic evaluation.
Documentation should include assumptions made and the procedures
used
- These statements of relative accuracy and confidence of the
estimate should be compared with production data, where
available
|
The relative accuracy of the Mineral Resource estimate is reflected
in the reporting of the Mineral Resource as per the guidelines of
the 2012 JORC Code. The remaining Measured, Indicated, and Inferred
material from the NW and SW region have been considered in the
mineral resource. The estimate is domained by identified pegmatite
number and zoned by mineralised and un-mineralised subtypes using
0.3% lithia and Na2O < 4%. Estimates are thus local by domain.
The same geological model and wireframes are used for grade control
and mine planning in Dassault/Surpac Software. Regularized
translations of the original Datamine Studio model are used in
Dassault/Surpac re-blocked to 5 x 5 x 6.25m for short term mine
planning and monthly reconciliations. Reconciliation is within
tolerance for an “Indicated” resource. |
Section 4: Ore Reserves
Criteria |
JORC Code explanation |
Commentary |
Mineral Resource estimate for conversion to Ore
Reserves |
Description of the Mineral Resource estimate used as a basis for
the conversion to an Ore Reserve. |
The Mineral Resource estimate (MRE) used was prepared by Mining
Plus Pty Ltd under the direction of Allkem and classified in
accordance with the JORC 2012 guidelines. The MRE was natively
prepared in Datamine software with a record date of 31 December
2022, and a summary was released to the ASX on 17 April
2023. The MRE was transformed into a diluted, regularised,
mining model inclusive of mining recovery, by Orelogy Mine
Consulting. Reconciliation between the two models was
considered acceptable, and the inbuilt dilution and mining recovery
reflect the historical values of 17% dilution and 94% mining
recovery which were derived from site model to process plant
reconciliations. |
Clear statement as to whether the Mineral Resources are reported
additional to, or inclusive of, the Ore Reserves. |
The Mineral Resources are reported inclusive of the Ore
Reserves. |
Site visits |
Comment on any site visits undertaken by the Competent Person and
the outcome of those visits. If no site visits have been
undertaken indicate why this is the case. |
The Competent Person has undertaken a site visit within the current
reporting period. |
Study status |
The type and level of study undertaken to enable Mineral Resources
to be converted to Ore Reserves. The Code requires that a
study to at least Pre-Feasibility Study level has been undertaken
to convert Mineral Resources to Ore Reserves. Such studies will
have been carried out and will have determined a mine plan that is
technically achievable and economically viable, and that material
Modifying Factors have been considered. |
Mt Cattlin is a mature operating mine and a Feasibility Study (FS)
investigating the continuation of current operations is the basis
of the conversion of the MRE to an ORE. The FS has addressed
all material Modifying Factors required for the conversion of
Mineral Resources to Ore Reserves and has shown that the mine plan
is technically achievable and economically viable. Where possible
and appropriate, the FS has used parameters in line with the
current operations. |
Cut-off parameters |
The basis of the cut-off grade(s) or quality parameters
applied. |
A cut-off grade of 0.4% Li2O has been used for reporting the ORE
(as was used in the underlying MRE). The economic cut-off
grade calculation is approximately 0.2% Li2O, but the more
conservative cut-off grade was adopted based on historical
operating experience as an approximation of the practical process
plant recovery constraint. |
Mining factors or assumptions |
The method and assumptions used as reported in the Pre-Feasibility
or Feasibility Study to convert the Mineral Resource to an Ore
Reserve (i.e., either by application of appropriate factors by
optimisation or by preliminary or detailed design). |
An optimisation of the MRE was undertaken with General Mine
Planning (GMP) software, both Geovia and Datamine products.
Comparisons between the outputs showed them to be materially
equivalent. The addition to the specific modifying factors
described in the sub-sections below, the optimisation data
inventory and input parameters included:
- Regularised mining model created
from the MRE that included dilution and mining recovery
- Surveyed surface topography
provided from Mt Cattlin as at 31/03/23
- Contract mining costs from a
competitive tender process
- Closure costs from the site Mine
Closure Plan cost estimate
- Spodumene concentrate (SC5.2)
revenue price of US$1,500/t inclusive of shipping and marketing
costs
- Tantalite concentrate revenue from
current sales contract
- State Government and third-party
royalties
- Processing, General &
Administration, concentrate surface haulage, and port costs from
current site budgets and forecasts (based on actual data)
- Net Present Value (NPV) discounting
rate of 10%
Where supplied by Allkem, these input parameters were reviewed by
Entech and considered appropriate for the current spodumene
concentrate market. The staged pit design and schedule is
considered suitable for Ore Reserve estimation. |
The choice, nature and appropriateness of the selected mining
method(s) and other mining parameters including associated design
issues such as pre-strip, access, etc. |
The ORE includes the Stage 4 North-West (NW) pit which is a down
dip extension of the current Stage 3 NW pit i.e., deepening of
current floor, and cutting back of the current pit rim. The
mining methodology is a continuation of the conventional hard rock
open cut practices of the current operations with continuous drill,
blast and excavate cycles (with ore grade control as
required). The existing operations provide access to the
operations of the ORE. |
The assumptions made regarding geotechnical parameters (e.g., pit
slopes, stope sizes, etc), grade control and pre-production
drilling. |
A comprehensive geotechnical study appropriate for an FS level was
undertaken by Entech to determine the pit design parameters used in
the ORE. Three dedicated geotechnical diamond drill holes,
totalling 651 m, located in the vicinity of the final pit walls
were drilled, logged, sampled and laboratory tested to collect
detailed geotechnical data. In addition, photogrammetric modelling
of the current pit walls, structure digitisation, in-pit mapping
and data from previous studies was utilised to characterise the
rock mass and provide input data for stability analysis that were
used to derive the recommended design parameters. 97% of the
rock within the pit containing the ORE is competent fresh
(unweathered) material, and key design parameters derived for fresh
rock were:
- 20 m bench
height
- 70o bench face
angle
- 8.5 m wide
spill berm
- 52o inter-ramp
angle
- 12 m wide
geotechnical berm every approx. 100 m of high wall
face
Pit designs were reviewed by Entech’s Principal Geotechnical
Engineer to ensure compliance with geotechnical intent. In
conjunction with the Mineral Resource and grade control predictive
computerised block models, established site grade control procedure
utilises visual inspection of blast hole cuttings and pit-floor
visual geological control when mining ore ("ore spotting"). The
combination of techniques enables identification and segregation of
barren pegmatite or pegmatite containing fine grained spodumene,
from pegmatite containing coarse grained spodumene (ore). Specific
grade control drilling campaigns (RC technique) are used in areas
of higher structural or mineralogical uncertainty. Mt Cattlin
is an operating mine with current production and excavation
knowledge. The resource drilling that defines the Stage 4 expansion
is +95% Reverse Circulation (RC), and predominantly spaced at 40 m
x 40 m. |
The major assumptions made, and Mineral Resource model used for pit
and stope optimisation (if appropriate). |
The underlying Mineral Resource model was jointly developed by
independent consultant Mining Plus Pty Ltd and Allkem Ltd (see ASX
release 17 April 2023). A dilution study was then carried out
by consultant Orelogy Mine Consulting (Orelogy) to determine the
appropriate methodology to create a diluted, regularised Mining
Model that could be readily used in GMP software. The key steps and
outcomes from the dilution study and modifications to create the
Mining Model were:
- Regularising
the block size into Selective Mining Unit (SMU) dimensions of 5.0 m
x 5.0 m x 2.5 m (East, North, Elevation).
- The SMU size
was selected based on the size of the equipment, the parent and sub
cell block sizes in the resource model and matched the existing
mining bench height to the vertical dimensions of the
block.
- The ore blocks
were flagged as either "Clean" (uncontaminated with mining
dilution) or "Contaminated" (contaminated with basalt country rock
and requiring beneficiation by optical sorting prior to being
processed) ore types depending upon the proportion of clean ore
within the SMU block.
- The overall
model reports 82% of the ore to the Clean category and 18% to the
Contaminated category.
|
The mining dilution factors used. |
No external dilution factors have been applied. The Mining Model
described above compared to the source undiluted model has a
back-calculated dilution of 16%. |
The mining recovery factors used. |
No external mining recovery factors have been applied. The Mining
Model described above compared to the source undiluted model has a
back-calculated ore loss of 5.7%. |
Any minimum mining widths used. |
A minimum mining width of 40 m has been applied in the pit
designs. |
The manner in which Inferred Mineral Resources are utilised in
mining studies and the sensitivity of the outcome to their
inclusion. |
Inferred Mineral Resources comprise 12% of the MRE and were used to
inform the optimisation. The designed pit inventory has 0.5% of
Inferred Mineral Resource which has been treated as waste for the
economic assessment. The design of the pit is not sensitive to the
inclusion, or not, of Inferred Mineral Resource. |
The infrastructure requirements of the selected mining
methods. |
The ORE as an extension of current operations, and the current site
infrastructure is suitable for proposed mining methods. |
Metallurgical factors or assumptions |
The metallurgical process proposed and the appropriateness of that
process to the style of mineralisation. |
Ore is processed through the existing crushing, screening, ore
sorting, and heavy media separation (HMS) plant with a nominal and
permitted capacity of 1.8 million tonnes (Mt) per annum. The Mt
Cattlin plant has been in operation for over a decade and is
suitable for this style of mineralisation. |
Whether the metallurgical process is well-tested technology or
novel in nature. |
The Mt Cattlin plant is comprised of well tested technology and
suited to the production of saleable spodumene
concentrate. Several ancillary circuits have been added over
the life of the plant including optical ore sorters and fines
recovery to incrementally enhance project economics. All the
processing technology has been in use in this or other
configurations for numerous to many years and are not regarded as
novel. |
The nature, amount and representativeness of metallurgical test
work undertaken, the nature of the metallurgical domaining applied
and the corresponding metallurgical recovery factors applied. |
As an operating processing facility, the Mt Cattlin plant has
amassed significant knowledge and expertise in the treatment of the
Mt Cattlin ores. Fine grained spodumene recovers poorly in the
Mt Cattlin processing plant. The underlying MRE model has
explicitly domained the fine-grained material and excluded it from
the new in-situ MRE inventory. Confirmatory metallurgical test
work on ore in the Stage 4 extension is in progress. A
regression formula developed from historical operating performance
that uses head grade to predict plant recovery, for a given grade
of concentrate, is in daily use at Mt Cattlin. The Feasibility
Study has used this algorithm to calculate metallurgical recovery
in the economic analysis. |
Any assumptions or allowances made for deleterious elements. |
Allowances have been made for iron oxide (Fe2O) content of the
spodumene concentrate. The (potential) penalty element is estimated
in the MRE, reported in the ORE, monitored during processing, and
quantified in the final spodumene concentrate product. Revenue
pricing used in the cashflow model incorporates likely penalty
charges. |
The existence of any bulk sample or pilot scale test work and the
degree to which such samples are considered representative of the
orebody as a whole. |
The ORE is a continuation of the ore zones that have been
successfully mined and processed at Mt Cattlin. Bulk samples and/or
pilot scale testing is not required due to the demonstrated process
flowsheet performance. |
For minerals that are defined by a specification, has the ore
reserve estimation been based on the appropriate mineralogy to meet
the specifications? |
The Ore Reserves have been based on lithia (Li2O), Tantalite
(Ta2O5), and iron oxide (Fe2O) grade ranges that are acceptable to
existing sales contracts and readily saleable into the
international market. |
Environmental |
The status of studies of potential environmental impacts of the
mining and processing operation. Details of waste rock
characterisation and the consideration of potential sites, status
of design options considered and, where applicable, the status of
approvals for process residue storage and waste dumps should be
reported. |
The Mt Cattlin mine site is an operating and mature operation with
well-understood impacts and established environmental management
systems and capability. The site operating procedures are
consistent with the principles of ISO 14001:2015 Environmental
Management Systems. Key potential risk areas include noise,
vibration and air emissions/quality are regulated, and have
specific management plans to ensure compliance. Waste rock and
processing tails stored on site are classified as Non-Acid Forming
(NAF) and chemically benign. The waste rock is predominantly
unweathered (fresh), competent, basalt and andesites which form
stable and erosion resistant landforms. Mt Cattlin pegmatite
tailings are a coarse, sandy, material that drains readily and
exhibits excellent stability on placement. The Heavy Media
Separation process used to produce spodumene concentrate does not
introduce chemicals into the tailings stream. A 2023 Mining
Proposal for pit and waste dump expansion required for part of this
ORE has been submitted to the WA regulator, with approval expected
in the third quarter of 2023. Further approvals will be required
during the life of this ORE, potentially including pit and waste
dumping area increases and a new In-Pit Tailings Storage
Facility. There is no reason to expect that all required
approvals cannot be gained in sufficient time to allow the
exploitation of this ORE as planned. |
Infrastructure |
The existence of appropriate infrastructure: availability of land
for plant development, power, water, transportation (particularly
for bulk commodities), labour, accommodation; or the ease with
which the infrastructure can be provided, or accessed. |
The Mt Cattlin mine site is a mature operating mine. All mining,
processing, power and water supplies, road and port infrastructure
are in place and operational. Accommodation is based near site
for a mixed commute and residential workforce. The operation has
access to a nearby regional bituminised airstrip capable of landing
100-seat jets. Sealed roads link the site to Perth, and major
regional towns. |
Costs |
The derivation of, or assumptions made, regarding projected capital
costs in the study. |
The FS has assessed and included appropriate capital costs. As an
existing operation the capital required for the operating life of
the ORE is not significant. |
The methodology used to estimate operating costs. |
The operating costs have been derived two sources:
- contract mining
costs - competitive market tender
- all other
operating costs - from analysis of the site FY24 forecast (which is
derived from actual historical costs and existing
contracts)
|
Allowances made for the content of deleterious elements. |
The revenue prices used in the economic analysis have incorporated
all applicable penalty charges as modelled, including deductions
for product grade less than the benchmark 6.0% spodumene grade
(SC6), and for any iron oxide content above limits. The
charges are not material in the overall pricing. |
The source of exchange rates used in the study. |
The exchange rate of consequence is Australian to United States of
America (USD:AUD) currency exchange rate as spodumene product is
sold in US dollars (USD). As an existing Western Australian based
operation, most costs are in denominated in AUD. A flat 0.70
USD:AUD exchange rate was used in the cashflow modelling that was
provided by Allkem. |
Derivation of transportation charges. |
Product transportation and handling charges (road haulage from Mt
Cattlin to Esperance port, and Esperance port costs) were provided
by Allkem and were derived from existing contracts. The
product revenue price used was discounted to be net of sea
freight. |
The basis for forecasting or source of treatment and refining
charges, penalties for failure to meet specification, etc. |
The headline external pricing forecasts for spodumene concentrate
grading 6.0 % Li2O were discounted for expected product grades of
between 5.2% Li2O and 5.5% Li2O. The discounts were derived from
existing contract penalty charges. Penalties were also applied to
Fe2O3 exceedances if they occurred. |
The allowances made for royalties payable, both Government and
private. |
Selling costs have allowed for a 5.0% ad-valorum Western Australian
state royalty and $1.50/t of ore processed third party
royalty. |
Revenue factors |
The derivation of, or assumptions made regarding revenue factors
including head grade, metal or commodity price(s) exchange rates,
transportation and treatment charges, penalties, net smelter
returns, etc. |
The ORE head grade is reported by the GMP software interrogating
the diluted mining model within the designed pit. Normal good
practice checks have been made in this process, as well as
reporting through alternative GMP software, and comparing to
similar internal work by Allkem. The spodumene concentrate
commodity price used in the cashflow model is based on pricing by
an external independent market forecaster , with appropriate
modifications for Mt Cattlin product specification. Allowances have
been made for surface and sea freight charges based on current site
budgets and forecasts. The realised price (i.e., FOB; net of
charges) forecast over the likely period the product from this ORE
will be sold into market has an average of A$2,978/dmt and a median
of A$2,963/dmt. Minor revenue is derived from the sale of a
by-product Tantalite concentrate and the sale price used is based
on current contracts which average approximately A$35/ dry
lb. Transport charges are derived from existing contracts, and
likewise penalty charges are taken from existing sales
contracts. |
The derivation of assumptions made of metal or commodity price(s),
for the principal metals, minerals and co-products. |
As described above, the commodity price assumptions have been taken
from independent market analysts and existing contracts and are
deemed appropriate. |
Market assessment |
The demand, supply and stock situation for the particular
commodity, consumption trends and factors likely to affect supply
and demand into the future. |
An Independent market researcher (commercial in confidence)
forecasts for demand, supply, and stock levels during the likely
market window of the product of this ORE have been used to
characterise the international market for spodumene
concentrate. The demand for spodumene concentrate is primarily
driven by automotive batteries, and the underlying strong global
growth in electric vehicles. From extreme deficit in supply over
the past two years that has seen steep price growth and incentive
for new supply, it is forecast that the overall market is moving
into surplus, with intermediate fluctuations, until the end of the
decade, from where it will again retreat into deficit. The
accuracy of these forecasts will be dominated by the accuracy of
the assumptions quantifying the rate of growth in mine supply, and
the rate of growth of EV sales. |
A customer and competitor analysis along with the identification of
likely market windows for the product. |
The Mt Cattlin spodumene concentrate is currently sold through
offtake agreements mainly to mainland Chinese convertors. Offtake
agreements have pricing conditions reflecting spodumene market
prices. During the market window applicable to this ORE, the
Mt Cattlin product moves from being fully contracted, to a mix of
contract and spot market exposure, to fully available for spot
pricing. This mix of contract vs. spot markets exposure is subject
to continuous review and adjustment. Significant global supply
chain diversification is underway which is seeing new lithium
processing plants being developed in countries other than China,
adding diversification to the potential customer base. |
Price and volume forecasts and the basis for these forecasts. |
Overall market supply and demand, along with customer and
competitor factors have been considered in the compiling of the
pricing forecast applicable to this ORE. The optimisation
price selected of US$1,500/t of spodumene concentrate was
conservatively lower than the average pricing forecast of the
likely market window. The cashflow model pricing used was based on
the current forecasts for the likely market window, modified for
the specification of the Mt Cattlin product, as discussed above in
the Revenue Factors section. It is assumed that all product
produced is sold into existing contracts and spot markets. |
For industrial minerals the customer specification, testing and
acceptance requirements prior to a supply contract. |
Mt Cattlin concentrates are sold into typical international
specifications, the more relevant specifications being Li2O grade,
Ta2O5 grade (both revenue factors), and Fe2O3 grade (a potential
penalty factor). Mt Cattlin product does not typically attract Fe
penalties, and the lithia grade is forecast to range between 5.5%
Li2O and 5.2% Li2O depending on market assessment. Customer
specification and acceptance of the product rely on a typical
process of samples taken by an independent agency and conformance
of the assays obtained by both the seller and buyer to an allowable
range of variance. |
Economic |
The inputs to the economic analysis to produce the net present
value (NPV) in the study, the source and confidence of these
economic inputs including estimated inflation, discount rate,
etc. |
The cashflow model is uninflated and applies a 10% discount rate to
calculate the project NPV, which was robustly positive. Mining
costs were derived by a competitive market tender process based on
a designed and scheduled pit, and existing site infrastructure.
Processing, General & Administration, product haulage, port,
and shipping costs reflect corporate forecasts based on historical
site actual data modified for Allkem’s view on FY24 market
conditions. As an ongoing operation, capital costs were
relatively minor but included an allowance for developing a new
In-Pit Tailings Storage Facility (IPTSF) during the life of mine,
buffering land purchases, as well as ongoing sustaining capital. An
end of mine allowance of $17.5 M has been incorporated into the
economic analysis. The overall cost base assumptions and
analysis methodology are considered appropriate, robust and at FS
level of accuracy. |
NPV ranges and sensitivity to variations in the significant
assumptions and inputs. |
The cashflow model has been tested for sensitivity to key economic
assumptions. As is typically found, the revenue assumptions (e.g.,
sale price, USD:AUD exchange rate, head grade, plant recovery) have
a much greater influence than cost assumptions (e.g., operating
costs, capital costs). At 20% individual variances to any of these
variables the project remains robustly economic over life of mine
and generates positive cashflows.Stripping Ratio is generally a
proxy for risk, and the individual stages of the overall project
(as currently evaluated) have quite different stripping ratios than
the overall project average. The NPV sensitivity to key variables
is therefore significantly different if analysed by stage. If the
most sensitive stage (Stage 4-1) is assessed by the most
influential variable (Revenue) at the most negative value (-20%),
the cashflow is weakly positive whilst the NPV falls to zero. The
following stage (Stage 4-2) and the sum of the two stages (Stage
4-1 + Stage 4-2) remain with strongly positive cashflows and NPV’s
when Revenue is tested at -20%. |
Social |
The status of agreements with key stakeholders and matters leading
to social licence to operate. |
As an operating site Mt Cattlin has a well-established and
implemented Environmental Management Plan and suite of operating
procedures consistent with the principles of ISO 14001:2015
Environmental Management Systems and includes, but is not limited
to:
- Environmental
Policy
- Requirements of
approvals, permits and licences
- Environmental
responsibilities of site personnel
- Site induction
programmes
- Environmental
monitoring and reporting requirements
- Inspection and
audit process
-
Non-conformance, corrective action, and risk management of
incidents
- Preparation of
procedures and work instructions addressing identified elements
such as dewatering, saline spillage, waste management and
bioremediation
- Stakeholder
consultation, including:
- Regular update
meetings with Shire of Ravensthorpe and Ravensthorpe Business
Association
- Ongoing
consultation with local neighbours
- Ongoing
consultation with Traditional Owner groups and presentations at the
Southwest Aboriginal Land and Sea Council working party
meetings
- Appointment of
an Environmental and Community Liaison Officer
- Biannual
presentations to the Ravensthorpe community
- Establishment
of the Mt Cattlin Community Consultation Group in 2018 with members
consisting of respected leaders of the community and Mt Cattlin
senior management. Minutes of meetings and presentations are made
publicly available via https://www.mtcattlin.com.au/ccg/
Allkem have advised the Competent Person that there are no current
issues that would be expected to endanger the ‘social licence to
operate’. |
Other |
To the extent relevant, the impact of the following on the project
and/or on the estimation and classification of the Ore
Reserves: |
Commentary below. |
Any identified material naturally occurring risks. |
The FS has investigated the potential for flooding via a hydrology
study which informed the design of the abandonment bund and the
Cattlin Creek diversion channel and associated bunding. No residual
issues were apparent. The TSF design has included analysis of
performance under seismic conditions, which was found to be
acceptable. The life of the ORE at less than five years is
considered too short to be meaningful affected by longer term
climate change. Short term variability in the form of floods or
droughts is unlikely to materially affect the operation. The
site continued operating through the recent global pandemic. |
The status of material legal agreements and marketing
arrangements. |
All material legal and marketing agreements are in place and
accounted for. |
The status of governmental agreements and approvals critical to the
viability of the project, such as mineral tenement status, and
government and statutory approvals. There must be reasonable
grounds to expect that all necessary Government approvals will be
received within the timeframes anticipated in the Pre-Feasibility
or Feasibility study. Highlight and discuss the materiality of any
unresolved matter that is dependent on a third party on which
extraction of the reserve is contingent. |
The ORE stated are located on active mining leases, in good
standing. All required permits for the current Stage 3 works,
which represents approximately 40% of this ORE, are approved and
are in place. A Mining Proposal that describes the first phase
of the Stage 4 expansion has been submitted to the WA Regulator for
approval, which is expected in August 2023. In addition to the
usual technical and regulatory compliance assessment that defines
Mining Proposal assessment, a tenement status conversion from an
Exploration Licence (E) to a General Purpose Licence (G) is
required to enable waste dumping as a permitted activity, and the
Mining Proposal to be subsequently approved. The E is held by
Allkem and is in good standing, and the conversion to a G is
expected to happen in May 2023 as per standard procedure in the
timeframe estimated for overall Mining Proposal approval. Post
receipt of the Mining Proposal approval described above, subsequent
permitting applications will then be made for the second phase of
the Stage 4 expansion, including the next In-Pit Tailings Storage
Facility (IPTSF). The second phase approvals are expected to be
gained by the end of the first quarter of 2024, allowing sufficient
time, including contingency, before the planned works are required
to commence. |
Classification |
The basis for the classification of the Ore Reserves into varying
confidence categories. |
The Mineral Resources above an in-situ economic cut-off grade
within the designed open pit and below the surveyed topography
surfaces (as of 31 March 2023) have been modified by the
application of suitable modifying factors and has been classified
Probable, based on the Measured or Indicated classification of the
Mineral Resource estimate. The surface stockpiles are
classified as Probable Ore Reserves to simplify reporting. Some
stocks such as ROM ore would normally qualify as Proved, but the
downgrading is not material to the ORE. The level of work
undertaken through the FS is considered sufficient for the
classification of Proved and Probable Ore Reserves. |
Whether the result appropriately reflects the Competent Person’s
view of the deposit. |
Mr. Daniel Donald, the Competent Person for this Ore Reserve
estimation, has reviewed the work undertaken to date and considers
that it is sufficiently detailed and relevant to allow declaration
of these Ore Reserves. |
The proportion of Probable Ore Reserves that have been derived from
Measured Mineral Resources (if any). |
As described above, all surface stocks have been classified as
Probable when it may have been possible to classify some as Proved.
Any potential upgrading would have no material effect on the
ORE. |
Audits or reviews |
The results of any audits or reviews of Ore Reserve estimates. |
The Ore Reserve has been estimated by independent consultants
Entech Pty Ltd with assistance from Allkem and Strategic Metallurgy
with the MRE, mining model, and processing areas
respectively. Entech have undertaken internal peer review
during the process. |
Discussion of relative accuracy/
confidence |
Where appropriate a statement of the relative accuracy and
confidence level in the Ore Reserve estimate using an approach or
procedure deemed appropriate by the Competent Person. For example,
the application of statistical or geostatistical procedures to
quantify the relative accuracy of the reserve within stated
confidence limits, or, if such an approach is not deemed
appropriate, a qualitative discussion of the factors which could
affect the relative accuracy and confidence of the estimate. |
The Competent Person deems that the methodology applied to arrive
at the Ore Reserve estimate for Mt Cattlin is appropriate and
defendable. The overall accuracy of the cost estimate used in
the ORE is considered to be ±15%. The cost estimates have been
derived from competitive market tender for mining costs, and actual
site operating data for processing and General and Administration
(G&A) costs, so the global accuracy is considered
robust. The current South-East In-Pit Tailings Storage
Facility (SE IPTSF) capacity will be reached by the second-half
2024, and deposition will switch to the nearby NE IPTSF, which will
have capacity for the remainder of the life of mine. The detailed
design, costing and permitting of the NE IPTSF has not yet been
finalised. Whilst the NE IPTSF capital expenditure (capex) is
immaterial in the overall project cashflow, the estimation has been
conservatively calculated and is at a PFS, rather than FS-level of
accuracy. There is no reason to expect that permitting approvals
will not be gained for the proposed NE IPTSF when applied
for. The Probable ore stockpiles include 900 kt @ 0.8% Li2O of
tailings from early project life that are planned to retreated at
mine closure. The economic analysis test has used conservative
metal recovery (30%) and product grade specifications (4.5% Li2O)
indicated from metallurgical test work to date. Test work is
continuing and flowsheet development is also underway but currently
the level of accuracy is PFS rather than FS. The contribution of
the tailings retreatment at mine closure is not considered material
to the overall project. |
The statement should specify whether it relates to global or local
estimates, and, if local, state the relevant tonnages, which should
be relevant to technical and economic evaluation. Documentation
should include assumptions made and the procedures used. |
The statement relates to global estimates of a mine scale. |
Accuracy and confidence discussions should extend to specific
discussions of any applied Modifying Factors that may have a
material impact on Ore Reserve viability, or for which there are
remaining areas of uncertainty at the current study stage. |
Confidence in the application of the modifying factors is
appropriate for the estimate. Historically disproportionate
amounts of fine-grained ore in the ROM feed negatively affected
plant recovery in the second half of 2022. This has since been
identified in the Mineral Resource and domained out of the new MRE
which underpins this ORE. |
It is recognised that this may not be possible or appropriate in
all circumstances. These statements of relative accuracy and
confidence of the estimate should be compared with production data,
where available. |
The contract mining cost data which was derived from competitive
market tender has also been compared to actual site production
data. All other operating cost data is directly derived from actual
production data. In summary, the cost data used compares very well
with production data and incorporates the inflationary/pandemic
effects seen over the previous several years. Processing plant
throughput and recovery data has been derived directly from
production data, and therefore compare very well. The mining
model used to evaluate the ORE incorporates regularised blocks at
SMU size, and mining dilution and mining recovery derived from
actual production data and plant reconciliations. This new mining
model has only been used in three month-end reconciliation at this
point in time. The new model is expected to continue to reconcile
well due to the technical improvements described above. |
Figures accompanying this announcement are available
at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/8a13271b-078c-478d-a772-11aa73e327c7
https://www.globenewswire.com/NewsRoom/AttachmentNg/4939260a-4a8b-4b61-a7dd-ab4cca831445
https://www.globenewswire.com/NewsRoom/AttachmentNg/838ee883-3b4e-4731-a9bd-ef07a92c11be
https://www.globenewswire.com/NewsRoom/AttachmentNg/3470423d-1891-4cec-84d0-e6c9508b8154
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