MetalsTech – Quebec, Canada

Summary

MetalsTech Ltd (‘MTC’), an Australian headquartered, Canadian focused explorer, listed on the Australian Securities Exchange in February 2017. Lithium Australia NL (‘LIT’) has formed a partnership with MTC that provides it with significant equity and technological leverage across six highly prospective hard-rock lithium projects in Quebec. Additionally, potential exists for a lucrative licensing structure for LIT’s disruptive lithium-processing technologies.

Diamond core drilling at the Cancet project was completed in June, with high-grade lithium mineralisation intersected at shallow depths within the spodumene-rich pegmatite. The mineralised pegmatite body is open in all directions, with a total defined strike length of some 1.2 km.

Metallurgical investigations indicate that the Cancet project hosts a clean pegmatite, with low iron oxide in assayed drill samples (0.5% to 0.8% FE2O3), and that it has the potential to produce a high-purity, coarse-grain spodumene concentrate. Initial results suggest the product suite will meet and exceed grade requirements for the battery market.

Final representative metallurgical testing results for composite split drill core, which are expected soon, will underpin off take and strategic partnership discussions.

Strategic partnership agreement – key terms

Under the strategic partnership agreement, MTC will have the exclusive right to apply LIT’s proprietary lithium extraction/processing technologies to spodumene concentrate from lithium projects within Quebec.

Pursuant to the partnership, LIT will:

  • be issued 2,000,000 fully paid shares in MTC
  • be issued with up to a further 4,000,000 MTC shares and 3,000,000 MTC options, subject to various bench-scale testing, pilot-plant testing, feasibility, offtake, plant construction and production performance milestones
  • receive a 2% gross revenue royalty on any products (including lithium carbonate and lithium hydroxide) produced by MTC using LIT’s proprietary lithium extraction technologies.

About MTC

MTC controls a developing portfolio of early-stage, hard-rock exploration projects in Quebec that are prospective for lithium hosted in spodumene-bearing pegmatites (see Figure 1). All boast excellent infrastructure, with access to some of the cheapest and cleanest power globally, courtesy of Quebec hydro-power.

Figure 1: MTC lithium projects location plan.

Those projects are as follows.

  • The Wells-Lacourciere lithium project, located close to the Quebec lithium mine of Jilin Jien Nickel Industry Co., Ltd. That mine contains a Measured and Indicated resource of 33.24 Mt at 1.19% lithium oxide (‘Li2O’) and an Inferred resource of 13.76 Mt at 1.21% Li2O (nickel 43-101 compliant), and recently assayed an extraordinary 7.0% Li2O from surface, including bulk samples of 2.87% to 4.0% Li2O.
  • The Cancet lithium project, which recently reported 1.71%, 1.85%, 1.94% and 3.79% Li2O from surface assays.
  • The Terre des Montagnes project (formerly known as Whabouchi East), which is contiguous with and along strike to the Whabouchi deposit of Nemaska Lithium Inc. (TSX: NMX), which has a reported nickel 43-101 Measured, Indicated and Inferred resource of 37.6 Mt @ 1.56% Li2O (12.98 Mt @ 1.6% Li2O Measured; 14.99 Mt @ 1.54% Li2O Indicated; 4.69 Mt @ 1.51% Li2O Inferred).
  • The Adina lithium project, which was explored in 2016 and returned grades of up to 3.12% Li2O from surface. Drilling is planned during 2017.
  • The Sirmac-Clapier project, which is located along the mineralised trend between the Sirmac deposit, grading 2.04% Li2O Measured and the Lac Clapier Nord surface occurrence.

Cancet project

First results from the maiden diamond core drilling programme at Cancet were announced in May 2017. Exceptional near-surface drill assay results were received from the drill core assayed from the first two prioritised drill holes. Those holes were drilled close to the area subject to channel sampling by MTC in August 2016 and again in October 2016.

Full results from the completed programme were announced at the end of June 2017. High-grade lithium mineralisation was intersected in numerous holes, with a best result of 11.46 m @ 3.23% Li2O (15.00 to 26.46 m) in MTC17-021.

Among other highlights were the following.

  • MTC17-021 – 21.46 m @ 2.24% Li2O and 310 ppm Ta2O5 from 5 m depth, including 11.46 m @ 3.23% Li2O (15.00 to 26.46 m), or 3.01 m @ 4.82% Li2O (16.99 to 20.00 m), and a sample high of 6.61% Li2O at 18 m depth.
  • MTC17-022 – 17.00 m @ 2.06% Li2O and 327 ppm Ta2O5 from a 6 m depth, including 8.15 m @ 3.44% Li2O and 558 ppm Ta2O5 (6.00 to 14.15 m), or 4.00 m @ 4.72% Li2O (9.02 m to 13.02 m), and a sample high of 5.55% Li2O at a 10 m depth.

The mineralised pegmatite body is open in all directions, with a total defined strike length of some 1.2 km. In addition to the encouraging lithium grades intersected near surface, significant tantalum mineralisation continued to be intersected. Work is ongoing, to better understand the zonation of lithium and tantalum in the host pegmatite.

In August 2017, LIT reported the discovery of a large pegmatite outcrop located approximately 1 km east, and along strike of, the currently mapped and drilled mineralised pegmatite body. Given the limited outcrop exposure at Cancet, the discovery is  significant;  it demonstrates the strong potential for the mineralised strike to extend beyond that currently delineated, and for additional pegmatite units to be present elsewhere in the area, under cover of shallow overburden.

Pegmatite host rocks at Cancet have a strong magnetic signature, meaning that cost-effective ground magnetic surveys can be used to identify targets for further exploration and drilling. Initial results from a soil-sample orientation survey indicate that geochemistry could prove valuable in locating buried pegmatite units.

Commencement of a two-week Phase II diamond-drill programme of initially 10 to 12 holes is planned for September. It will target tonnage expansion in the down-dip/plunge extensions of the defined mineralisation, as well as strike extension and correlation with adjacent pegmatite structures.

Longer term, LIT hopes to be ‘deal ready’ by 2018 with respect to a strategic financing plan for Cancet.

Metallurgical testwork

In May 2017, MTC announced outstanding results from the completion of preliminary mineralogy profiling of samples from the Cancet project. Initial metallurgical testing of a 5-kg outcrop sample confirmed high-grade spodumene in the pegmatite ore body. A concentrate with a grade of 6.24% Li2O was produced from a 10 mm crush, indicating simple, low-cost DMS (Dense Media Separation; i.e. gravity separation) will recover 77% of the lithium in 13% of the mass. DMS removed 80% of the mass feed at 2.7 SG (specific gravity), indicating very high recovery at a coarse crush size. The simple processing is indicative of a significantly lower capital and operating cost profile, as well as a shorter commissioning time when compared with other projects.

A 100-kg parcel of split core samples from the June 2017 drilling programme was shipped to NAGROM Laboratories in Perth. Results confirmed earlier metallurgical tests demonstrating that the Cancet project hosts a clean pegmatite with low iron oxide in assayed drill samples (0.5% to 0.8% FE2O3), and that it has the potential to produce a high-purity, coarse-grain, premium spodumene concentrate. Initial results suggest the product suite will meet and exceed grade requirements for the battery market.

Final representative metallurgical testing results for composite split drill core are expected in the near future and will underpin offtake and strategic partner discussions.