The measured, indicated and inferred resource for Pilgangoora is now 128.6 million tonnes at 1.22% lithium oxide, 138 parts per million tantalum pentoxide and 0.63% iron oxide for 1.57 million tonnes of lithium oxide (or 3.98Mt of lithium carbonate) and 39 million pounds of tantalum pentoxide.
Using a 1% lithium oxide cut-off, the resource is 94Mt at 1.43% lithium oxide for 1.3Mt contained lithium oxide.
Measured and indicated resources comprise 63% of the total and are up by 134% to 83.6Mt at 1.27% lithium oxide, 135ppm tantalum pentoxide and 0.58% iron oxide for 1.06Mt of lithium oxide and 24.9Mlb tantalum pentoxide, which will underpin a new reserve estimate in the coming weeks.
Pilgangoora has a current reserve of 29.5Mt at 1.31% lithium oxide and 134ppm tantalum pentoxide.
The new reserve will form part of the Pilgangoora definitive feasibility study, to be released next month.
There is still resource upside, given recent deeper intersections and a discovery along strike from the Central Pit are yet to be included.
Pilbara managing director Ken Brinsden said the resource upgrade confirmed Pilgangoora as a world-class deposit.
“This should enable us to significantly increase the ore reserve published as part of the March prefeasibility study, and should significantly enhance the overall economic and financial parameters of the project when we deliver the DFS in August,” he said.
The company is targeting an eventual 50-60Mt reserve, which could double the mine life to 30 years.
Capital costs for a 2Mt per annum standalone operation to produce around 330,000tpa of 6% spodumene concentrates were put at $A184 million in the PFS.
The PFS returned a net present value of $407 million and an internal rate of return of 44%.
Last week, Pilbara signed a binding agreement with General Lithium Corporation for following the signing of a non-binding memorandum of understanding last year.
The offtake agreement is for the supply of 140,000 tonnes per annum of 6% chemical-grade spodumene concentrate over six years starting in the first quarter of 2018, with an option to extend for a further four years.
The deal covers around 40% of Pilgangoora’s expected annual output of 330,000tpa spodumene.
Pilbara remains on track to start construction at Pilgangoora before the end of the year for first production late next year.
At the same time, Pilbara and General will look into the construction of a potential downstream processing facility, following Pilbara’s recent agreement with Lithium Australia to evaluate the Sileach processing technology.
Pilbara had around $105 million cash in the middle of June after raising $100 million in April, and will receive a further $17.75 million from General as part of a subscription agreement.
Shares in Pilbara gained 1.5c to 68c.
