QUARTERLY ACTIVITIES REPORT September 2017

Transcription

1 ASX ANNOUNCEMENT 30 October 2017 QUARTERLY ACTIVITIES REPORT September 2017 Altura is fully funded into production following completion of its US$110 million debt facility Successful placement to international institutions and sophisticated investors raised a further A$26 million to progress Stage 2 expansion Definitive Feasibility Study for Stage 2 expansion of the Project targeted for completion in Q New and revised binding Offtake Agreements signed covering 90% of initial planned production levels Upgraded JORC Ore Reserve and Mineral Resource estimates, including significantly increased portions in the Proved and Measured categories Construction activities at Altura s Pilgangoora mine site continued during the quarter Mining development has progressed ahead of schedule with three separate stages of mining opened and producing ore Project commissioning remains on track for Q First lithium concentrate sales remains on target for Q Construction progress at Altura Lithium Operation at Pilgangoora Altura Mining Limited ABN Level 2, 23 Barrack Street Perth WA 6000 PO Box Z5369 St. George s Terrace WA 6831 T F cosec@alturamining.com alturamining.com

2 LITHIUM ALTURA LITHIUM Pilgangoora (Western Australia - 100% AJM) Project Funding During the September quarter Altura completed a project funding package for construction and commissioning of the Pilgangoora Lithium Project in the Pilbara region of Western Australia (see ASX release on 28 July 2017). Completion of the funding package was the final prerequisite to enable the Company to finish construction of the mine and move into production in 1H The key details of the facility are: Senior secured loan notes issued to raise a total of US$110 million Leading US and Swiss based investment management groups to provide the loan note facility package Funding was delivered in two (2) tranches with Tranche 1 (approximately US$33 million) received on 8 August 2017 and Tranche 2 (US$77 million) received on 25 September 2017 Placement In early October Altura completed a A$26 million (before costs) placement to international institutions and sophisticated investors. The Company plans to use the funds to rapidly progress a Stage 2 expansion study at the 100%-owned and fully-funded Altura Lithium Project, where Stage 1 construction remains on schedule for first lithium concentrate production in the June Quarter The funds will also be used by Altura for exploration and general working capital reserves. Offtake Agreements During the quarter Altura signed two (2) binding offtake agreements (BOA) for a minimum total of 200,000 tonnes of 6% grade spodumene concentrate per year representing more than 90% of initial planned Stage 1 annual production (see ASX release on 10 July 2017). These BOA s comprised: A new agreement signed with leading Chinese battery producer Shaanxi J&R Optimum Energy Co., Ltd ( J&R Optimum Energy ) A revised agreement with prominent Chinese based lithium and battery materials processor Lionergy Limited ( Lionergy ) so that the terms of both BOA s are aligned The key terms of the BOA s are: Minimum of 100,000 dry metric tonnes (dmt) per annum of 6% grade spodumene concentrate (pro-rated) with first product sales to commence before 30 June 2018 Term of BOA of 5 years minimum Minimum price of US$550 dmt (FOB) and a maximum price of US$950 dmt (FOB) for the first three (3) years of the BOA (based on 6% Li 2 0 per dmt) Annual pricing to be agreed via consideration of current market pricing information, including but not limited to indices for spodumene (if available); prices published or announced by other Page 2 of 9

3 companies and movement in lithium carbonate prices, subject to the floor and ceiling price for first three (3) years The completion of the BOA s was a significant milestone for Altura and its offtake partners, and provided significant support for the advanced development of the Pilgangoora Lithium Project. Upgraded Ore Reserve and Mineral Resource Estimates Subsequent to the quarter end, Altura announced upgraded JORC Ore Reserve and Mineral Resource estimates for the Pilgangoora Lithium Project. These estimates were calculated after further closely spaced infill drilling conducted between May and July 2017, and included for the first time a significant portion in the Proved and Measured categories. The improved numbers have enhanced the Company s knowledge of the orebody and significantly reduced the risks commonly associated with grade control for start-up projects. The Ore Reserve and Mineral Resource estimation work was undertaken by geological and mine engineering services consultants, Cube Consulting Pty Ltd. Ore Reserve Estimate October 2017 JORC Category Cut-off Li 2 O% Ore (million tonnes) Li 2 O (%) Fe 2 O 3 (%) Contained Li 2 O (tonnes) Proved 0.43% ,000 Probable 0.43% ,000 TOTAL 0.43% ,000 Mineral Resource Estimate October 2017 JORC Category Cut-off Li 2 O% Ore (million tonnes) Li 2 O (%) Fe 2 O 3 (%) Contained Li 2 O (tonnes) Measured 0.43% ,000 Indicated 0.43% ,000 Total 0.43% ,000 Inferred 0.43% For further information on both the Ore Reserve and Mineral Resource estimates, please refer to the ASX announcement on 24 October Stage 2 Feasibility Study During the quarter Altura commenced work on a Stage 2 expansion study at its Pilgangoora lithium project, to explore and identify expansion opportunities to significantly increase project scale and future production levels. Page 3 of 9

4 The expansion plan is aimed at increasing production to 450,000 tonnes per annum of spodumene concentrate, from the start-up capacity of 220,000tpa, and is aligned with the growth plans of Altura s Chinese offtake partners. The study will look at engineering design for additional process plant modules to deliver the increased production tonnage, along with the necessary additional water, power supply and logistics to support the additional production capacity. The expansion Definitive Feasibility Study is expected to be delivered early in Mine Development Works Since commencing mining on site in May 2017, Altura s mining contractors NRW Mining and Civil, have made significant progress in developing the pit and using the waste material to complete the construction of the majority of mining related infrastructure. Thus far three separate stages of mining have been opened up and all are producing ore. Approximately 50,000 tonnes of ore has currently been mined with a further 50,000 tonnes expected to be stockpiled on the ROM by December Despite having Ore available for mining NRW has been targeting waste material for construction of general mine infrastructure. This includes: - All intra mine haul roads are now in place and sheeted - Magazines and bulk explosives storage facilities commissioned - Mobile equipment workshops commissioned - Run of Mine (ROM) pad is 90% complete - All bulk earthworks complete on the Tailings Storage Facility (TSF). Total volume placed from the pit in the TSF exceeded 1 Million tonnes. Progression of the concrete works for the process plant, looking west Page 4 of 9

5 Process Plant Construction Construction of the process plant was commenced by Altura s construction partners Civmec in May 2017 and has proceeded rapidly since. A summary of the progress made by the plant construction team includes: - 80% of all concrete civil works now complete, with approximately 4,500m 3 of concrete poured - Primary and Secondary crusher steelwork 50% complete - Erection of secondary screening building almost complete - Power station building has been constructed and Electrical works has commenced - A significant number of conveyors have either been assembled or erected in position - High Pressure Grinding Rolls (HPGR) and Ball Mill assembly has commenced In line with the accelerated pace of construction and assembly of the process plant has been the deliveries to site of the individual items of plant equipment. In excess of 90% of all equipment for the process plant is now on site, including all major items. Altura chartered an entire ship to bulk transport all equipment arriving from South Africa which contained 43 containers and 53 break bulk items. Recent equipment that has arrived include: - Ball Mill, HPGR and Apron Feeder - Dense Media Separation (DMS) modules - Thickeners - Screens - Conveyors Deliveries of plant equipment to Pilgangoora Page 5 of 9

6 Three separate areas of mining are currently producing ore Tailings Storage Facility under construction Page 6 of 9

7 Flotation cells being unloaded on site COAL COAL ASSETS DIVESTMENT The Company has also previously stated its intention to divest its interests in both the Delta and Tabalong coal assets, and now that the funding of the Pilgangoora Lithium Project has been completed, it will be able to pursue a number of options for sale of the coal assets. During the September quarter Altura progressed several due diligence and project reviews with international mining groups for potential divestment of the coal assets. During 2017 the substantial coal price recovery has delivered new interest in the coal assets with the Company engaged with additional potential asset buyers. Altura advised during the September quarter that it had received the final approval for its Forestry Permit (IPPKH) from the Indonesian Minister for Forestry for its 70% owned Suryaraya Permata Khatulistiwa (SPK) IUP in the northern area of the Tabalong Coal Project in South Kalimantan, Indonesia. The approved IPPKH with an area of hectares allows for the mining pit, waste dumps, mine infrastructure and haul road. The IPPKH approval will allow mining of the project to commence and adds significant value to the Tabalong Coal Project. About Coal Coal is a plentiful natural source of energy. Thermal coal provides a reliable fuel for electricity generation with Indonesia now the world s largest exporter of thermal coal products. Higher value PCI (pulverised coal) and coking coal are used in the production of steel. Page 7 of 9

8 SCHEDULE OF MINING TENEMENTS The following mining tenements were held by the Company at the end of the quarter: Location Tenement Interest Pilbara, Western Australia E 45/ % E 45/ % E 45/ % E 45/ % E 45/ % P 45/ % M 45/ % M 45/ % M 45/ % L 45/ % L 45/ % L 45/ % L 45/ % L 45/ % L 45/ % Tanami, Northern Territory ELA % ELA % EL % EL % Delta, East Kalimantan PT Delta Ultima Coal 33⅓% Tabalong, South Kalimantan PT Suryaraya Permata Khatulistiwa 70% PT Suryaraya Cahaya Cemerlang 70% PT Suryaraya Pusaka 70% PT Kodio Multicom 56% PT Marangkayu Bara Makarti 56% Catanduanes, Philippines COC 182 (Area 3) Catanduanes 100% Albay region, Philippines COC 200 (Area 4) Rapu-Rapu 100% Bislig region, Philippines COC 202 (Area 17) Surigao del Sur 100% The following mining tenements were acquired during the quarter: Location Tenement Interest Pilbara, Western Australia M45/ % L45/ % Page 8 of 9

9 Competent Persons Statements The information in this report that relates to the Mineral Resource for the Pilgangoora lithium deposit is based on information compiled by Mr Stephen Barber. Mr Barber is a Member of the Australasian Institute of Mining and Metallurgy. Mr Barber is the Senior Resource Geologist at Altura Mining Limited and has sufficient experience that is relevant to the style of mineralisation under consideration and to the activity of mineral resource estimation 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. Mr Barber consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. The information in this report that relates to the Ore Reserve for the Pilgangoora lithium deposit is based on information compiled by Mr Quinton de Klerk. Mr de Klerk is a Fellow of the Australasian Institute for Mining and Metallurgy. Mr de Klerk is a Director and Principal Consultant of Cube Consulting Pty Ltd and has sufficient experience that is relevant to the activity of ore reserve estimation 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. Mr de Klerk consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. The Company confirms that it is not aware of any new information or data that materially affects the information included in the ASX announcement on 24 October Further, all material assumptions and technical parameters underpinning the mineral resource and ore reserve estimates in that announcement continue to apply and have not materially changed. About Altura Mining Limited (ASX: AJM) Altura is building a leading position in the independent supply of lithium raw materials, with a world-class Altura Lithium Project at Pilgangoora to become Australia s next major hard rock lithium product supplier in Altura has an experienced in-house team focussed on delivering the Altura Lithium Project into production. The project is the most advanced stage, near-term producing lithium project; coupled with solid offtake partners and a market providing substantial growth opportunities to ensure positive shareholder returns. For further information, please visit or phone: Company: Media: James Brown, Managing Director +61 (0) Michael Weir / Cameron Gilenko Paul Mantell, Executive Director +61 (0) Citadel- MAGNUS Page 9 of 9