The company spent an option fee of $A25,000 and issued 50 million of its shares to acquire private group Lithco No. 2, which in turn has the right to earn a 50% stake in the project.
The 79,130 hectare Bald Hill project is owned by Singapore listed company Alliance Mineral Assets and is one of the few Western Australian mines to have ever produced high grade spodumene concentrate, the company says.
Comprising four mining leases, five tenement applications, eight exploration and eight prospecting licences adjacent to Tawana’s Cowan lithium project, Bald Hill also includes a tantalum processing facility refurbished and upgraded by Alliance and commissioned earlier this year.
While the plant is not suitable for recovering the bulk of the spodumene in the ore that is processed, engineering studies to assess installing a front end spodumene recovery circuit to the existing facility are underway.
For Lithco to acquire the stake from Alliance it must spend a minimum of $7.5 million on exploration, evaluation and feasibility studies by December 31, 2017 as well as further $12.5 million on capital expenditure on the project.
Recently appointed Tawana managing director Mark Calderwood said the company would talk with potential offtake partners over the coming months and investigate equity options to progress the deal.
Calderwood said the acquisition could see Tawana advance to spodumene production in a joint venture, subject to the completion of reserve and plant upgrades.
“In addition to the mining lease, the combined 950km of the Cowan and Bald Hill tenement packages covers two very large pegmatite belts providing significant potential for further resources,” Calderwood said.
Tawana said a planned drilling would focus on the project‘s existing mining leases, with wide-spaced holes to gain an understanding of the potential for stacked pegmatites at the project.
The company is already drilling on the Cowan project and has intercepted a number of spodumene bearing pegmatites there, it said.
The move comes after Tawana acquired a 95% stake in a US pegmatite tailings stockpile in Namibia in September.
Shares in Tawana last traded at 13c and will be reinstated to trading on Wednesday.
