Sadisdorf – Saxony, Germany

Summary

In February 2017, Lithium Australia NL (‘LIT’) announced it had entered into a binding memorandum of understanding (‘MoU’) to form a joint venture (‘JV’) with Tin International AG (a subsidiary of German-listed Deutsche Rohstoff AG). The JV will include the Sadisdorf tin deposit (see Figure 1) in Saxony, Germany as a key asset.

Figure 1: Sadisdorf location plan.

The JV agreement with Tin International was signed in May 2017, following the completion of due diligence studies by LIT on the Sadisdorf project and by Tin International on the SiLeach® process respectively.

To be managed by LIT, the JV aims to extend and upgrade the existing Sadisdorf JORC (2012) resource (3.36 Mt inferred resource grading 0.44% Sn (tin) at a cutoff of 0.25% Sn) and to delineate a lithium resource that it is anticipated will be associated with the tin mineralisation. The tin orebody is thought to contain in the order of 15% zinnwaldite (a lithium mica very easily treated with LIT’s SiLeach® process).

 JV terms

With the signing of the JV, Tin International receives a one-time cash payment of €50,000 and 1,723,806 LIT shares. LIT can earn a 15% interest in the JV by spending €750,000 in exploration on Sadisdorf until 30 June 2018. Alternatively, LIT can elect to pay the outstanding amount in cash to Tin International. A further 35% interest (for a total 50% interest) can be earned by spending an additional €1.25 million on exploration until May 2020. After completion of the farm-in period, the partners bear the project development costs equally or are diluted accordingly.

Geology and mineralisation

Sadisdorf is one of several large and well-documented tin and tungsten deposits within the Erzgebirge metallogenic province. Those deposits, which include Cinovec and Altenburg, have a mining history dating back several hundred years. The region was an important source of metals up to and during WWII. However, after the unification of Germany the low grades being mined rendered most of the deposits uneconomic.

The granitoid batholiths of the Erzgebirge district outcrop over areas of tens to hundreds of square kilometres in eastern Germany (Saxony) and the Czech Republic. Many are composite bodies built up from a succession of temporally, texturally and chemically distinct sub-intrusions, each of which may host a distinct mineral assemblage.

Sadisdorf is a near-surface greisen deposit. Greisens, which are formed by alteration of granite during the cooling stages of emplacement, are prospective for mineralisation because the last fluids of granite crystallisation tend to concentrate incompatible elements such as tin, tungsten, molybdenum and other specialty metals, including lithium.

The deposit, which has a known strike length of up to 400 metres (‘m’), a width of up to 300 m and a vertical extent of at least 250 m, is open at depth and partially accessible through historic underground workings (see Figure 2). With the mineralisation outcropping at surface, substantial parts of the Sadisdorf deposit are highly amenable to open-pit mining methods.

Exploration

In 2014, Tin International reviewed historic drill data and carried out a surface channel sampling programme that led to a JORC 2012-compliant Inferred Mineral Resource estimate. The currently known deposit contains 15,000 tonnes of tin (Sn) as an Inferred Mineral Resource (JORC 2012 Resource at 0.25% Sn cut-off). LIT’s target is the lithium mica mineral zinnwaldite, which is thought to be associated with the tin mineralisation.

Figure 2: schematic section through Sadisdorf tin deposit.

Proposed exploration

The JV aims to extend and upgrade the existing Sadisdorf JORC (2012) resource (3.36 Mt inferred resource grading 0.44% Sn at a cut-off of 0.25% Sn) initially, by the addition of lithium data to quantify a poly-metallic resource. Tin International and LIT intend to expand that resource by way of further drilling in the first year of the JV. The tin orebody, which is thought to contain in the order of 15% zinnwaldite, represents a prime opportunity to supply lithium into the European battery industry.