RE: Spodumene Hill7 Jul 2023 18:43
Andrada Mining (“ATM”) has released results from the first drill programme on the B1 and C1 pegmatites, within licence ML129, also known as the Spodumene Hill Project. Sitting ~15km SW of ATM’s flagship Uis Project, Spodumene Hill is thought to be mineralogically similar and could provide a satellite ore source for the current Phase 1 tin-tantalum circuits and potential future commercial lithium plant. With surface sampling in 2022 having shown the presence of spodumene mineralisation – which sells at a premium to the petalite present at Uis – the 2023 exploration programme was designed to upgrade historical resources of tantalum and tin, whilst proving continuity at depth and establishing average grades of lithium. The results confirmed depth potential and highlighted zones of very attractive lithium grades (>2% Li2O in places). While the programme provides a relatively small sample of preliminary, shallow holes, ATM sees scope for ore sorting to provide a high grade pre-concentrate for a future lithium processing plant. Meanwhile, tantalum grades were up to 2,742ppm and averaged ~280ppm, more than 3x the grade at Uis. ATM has initiated a metallurgical programme to define an optimal flowsheet for lithium, tantalum and tin from Spodumene Hill. The imminent completion of a lithium pilot plant at Uis could assist in this process and, along with ATM’s ongoing strategic funding process, is a key upcoming catalyst to close the 79% discount to our GBp 35/sh target price.
Initial glimpse into the potential of Spodumene Hill Project ATM completed 1,159 m of diamond drilling over seventeen drill holes on B1/C1, with all holes intersecting mineralised pegmatites. Highlights include hole B1_01 which intersected 14.52 m at 1.38% Li2O, 285 ppm Ta and 0.131% Sn from a depth of 15.48 m, including a 5m subinterval at 2.32% Li2O, and hole C1_04, which intersected 11.06 m at 0.81% Li2O, 1101 ppm Ta and 0.033% Sn from a depth of 13.59 m to 24.65 m. In addition to the visible lithium content, the intersections highlight the tantalum potential of the area, with the highest grade returned reaching over 2,700ppm. We note licence ML129 sits within ‘truckable’ distance from existing processing facilities at Uis, including a recently constructed tantalum recovery circuit, suggesting potential upside by blending higher-grade tantalum feeds. Following positive pegmatite intersections, the company will concentrate on defining the extent of these zones both laterally and with depth, as well as launching a metallurgical programme to explore the optimal beneficiation process, which we believe is likely to involve ore-sorting to produce a higher lithium grade pre-concentrate.
Lithium test programme on track As detailed in our previous note, ATM announced it has produced the first saleable bulk lithium concentrate from the off-site pilot test, using dense medium separation ("DMS"). The encouraging petalite concentrate is being tested for conversion to li
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