Sadisdorf and Eichigt – Germany

Summary

Lithium Australia NL (‘LIT’) will, subject to regulatory requirements, acquire 100% of the Sadisdorf lithium/tin resource in Saxony, Germany from its joint-venture partner Tin International AG (‘TIN’). As well as the Sadisdorf tenure, the sale includes the nearby Hegelshöhe exploration licence (see Figure 1).

Also in Saxony, LIT’s Eichigt project is 100% company-owned. The Eichigt exploration licence covers 133 square kilometres (‘km2‘) in an area known to host lithium and cobalt mineralisation.

Figure 1: Sadisdorf location plan.

Sadisdorf

The Sadisdorf and Hegelshöhe exploration licences are located in the province of Saxony, 20 to 40 km south of the regional capital, Dresden, and close to the border with the Czech Republic.

Transaction details

LIT was actively farming into a joint venture (‘JV’) with TIN (ASX: LIT 25 May 2017), having spent approximately €750,000 on exploration activity to that date. LIT and TIN have now signed a binding agreement in which TIN agrees to sell its interest in the project, including the nearby Hegelshöhe exploration licence, also held by TIN (ASX: LIT 11 June 2018).

TIN will, subject to the consent of the responsible German Mining Authority, transfer 100% interest in the two exploration licences for a total consideration of €2 million, of which €500,000 will be cash and €1.5 million payable in LIT shares valued at 105% of VWAP. The initial JV agreement will terminate on completion of the transfer.

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.

Figure 2: schematic section through Sadisdorf tin deposit.

Exploration – TIN

In 2014, Tin International AG reviewed historic drill data and carried out a surface channel sampling programme that led to a JORC 2012-compliant Inferred Mineral Resource estimate. The orebody was drilled by the Soviets during the occupation of East Germany.

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.

Exploration – TIN/LIT JV

The JV aimed 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. A substantial amount of lithium data generated in the Soviet era was compiled and LIT contracted CSA Global, an international mining consultancy, to audit the database in order to evaluate the mineral resource.

Sampling of historic drill core (shown in Figure 3) and systematic channel sampling of underground workings were completed in 2017, reinforcing the quality control required for future mineral resource estimation and providing a valuable library of mineralogical data. Mineralogical studies – to be conducted in Perth, Western Australia – will augment the metallurgical assessment required for feasibility evaluation studies. Sadisdorf mineralisation has already been treated using LIT’s SiLeach® process, with outstanding results.

Figure 3: Historic Sadisdorf drill core and sample pulps.

Following on from those studies in December 2017, the JV partners announced a maiden lithium Mineral Resource for the Sadisdorf project (ASX: LIT 7 December 2017). Company consultants estimated that Sadisdorf contains an Inferred Mineral Resource of 25 million tonnes grading 0.45% Li2O (refer to Table 1 below), based on re-analysis and re-interpretation of historical drilling and underground sampling.

This result substantially enhances the potential for progressing the historical Sadisdorf tin-tungsten mine to a polymetallic deposit with value contributions from lithium, tin and tungsten, as well as potentially from a range of by-products (e.g. potassium sulphate fertiliser, sodium silicate) made available by virtue of LIT’s novel SiLeach® hydrometallurgical technology.

Sadisdorf tin and lithium project – Mineral Resource estimate as at 23 November 2017; classified in accordance with the JORC Code (2012 edition).

Classification Domain Tonnes (Mt) Li2O (%)
Inferred Inner greisen 17 0.47
Inferred Outer greisen 8 0.43
Inferred Total 25 0.45
Notes: MRE defined by 3D wireframe interpretation with sub-cell block modelling. Grades estimated using Ordinary Kriging. The MRE is reported at a cut-off of 0.15% Li (0.3% Li2O). The block model has been depleted to reflect historical mining.
Table 1. Inferred Mineral Resource estimate for Sadisdorf.

Diamond core drilling

In April 2018, a three-hole diamond drill programme was completed. A total of 460 m of drilling duplicated selected historic drill holes, with large- diameter core (101 mm, SK6L) facilitating collection of samples for future metallurgical testwork. A 3D view of the drilling is shown in Figure 4 and a summary of the drilling is shown in Table 2 below.

Figure 4: 3D geological model showing planned drill traces.

 Drill hole ID

X (metres)

Y (metres)

Z (metres)

Planned Azimuth

Planned Dip

Planned length

Actual length

SDDH-17-01T

5404692.0

5633054.4 592.6 88.2° -86.0° 310 m

310.0 m

SDDH-17-02T

5404703.4 5633052.3 592.4 280.2° -66.6° 150 m 100.8 m

SDDH-17-02TA

5404703.4 5633052.3 592.4 280.2° -66.6° 150 m 150.0 m

Coordinate system: DHDN / 3-degree Gauss-Kruger zone 5

Table 2. Summary drill-hole data.

This was the first drilling at the Sadisdorf project since 1990. It will help breath new life into the project, which can potentially supply raw materials to the European electric-vehicle battery industry.

Geological and assay data from the first hole, SDDH-17-02T has been collated (ASX: LIT 11 May 2018). Intercepts include 32.19 m of continuous lithium mineralisation at 0.52% Li2O and up to 11.65 m containing 0.35% Sn.

Geological logging indicates conformity of drill hole SDDH-17-02T compared to historic logs. A final evaluationof the drill programme results compared to historic data will follow after receipt of all assays from that programme and interpretation of the geochemical data.

Metallurgical studies

Quantitative X-ray diffraction (QXRD) analysis has shown quantities of lithium-bearing zinnwaldite mica ranging from 9% (average of outer greisen zone) to 12.5% (average of inner greisen zone), with local values in the inner greisen zone of up to 38% zinnwaldite.

Zinnwaldite, a lithium mica, is very easily processed using SiLeach®, making this a prime target for the supply of lithium into the European battery industry.

Preliminary SiLeach® testwork on the Sadisdorf outer greisen material returned encouraging results, with lithium leach extractions of zinnwaldite concentrates from the Sadisdorf greisen mineralisation averaging 95%, (refer to Table 3 below).

Sadisdorf greisen sample Lithium head grade (ppm) Li2O equivalent head grade (%) Lithium SiLeach® extraction (%)
Greisen 1 2,510 0.54 96.8
Greisen 2 2,250 0.48 97.4
Greisen 3 1,400 0.30 91.0
Average 2,053 0.44 95.0
Table 3. SiLeach® test results for Sadisdorf greisen samples. 

Eichigt

Summary

LIT’s Eichigt exploration licence covers an area of 133 km2 near Eichigt in Saxony (see Figure 1). By acquiring another land package in Saxony – one that has, since 2015, been known to host lithium minerals – LIT has further strengthened its position in central Europe and supported its aspiration to become a prime supplier toEurope’s burgeoning battery industry (see ASX: LIT 15 January 2018).

Mining ceased in Eichigt in the 17th century, and little modern exploration has been undertaken there since. The area hosts a buried granite cupola prospective for volatile metals, and lithium-bearing greisens (alteration zones) with known extensions to the northwest and southeast. Lithium minerals were identified on surface, right above the buried cupola of the granite intrusion, in 2015.

There are some historic tin-mining operations in the northwest (currently being explored by Avrupa Minerals, a Canadian based company). The southwestern extension of the granite forms the central part of the Gottesberg tin deposit currently being explored by Lithium Australia’s former joint-venture partner Tin International.

Exploration

Reconnaissance exploration activities in May and June 2018 mapped and sampled copper-bearing quartz-veins that were subjected to small-scale mining activities during the 16th century. Significant cobalt and copper mineralization was encountered, with grades up to 1.47 cobalt, 0.54 % copper and 0.71% lithium (ASX:LIT 30 May 2018 and 07 June 2018).

These early results for cobalt and copper confirm polymetallic mineralisation within the Eichigt project area. Deleterious elements, including arsenic and uranium are very low in concentration.

The results of the first exploration campaign at Eichigt is strong evidence that the licence area was neglected during systematic exploration work carried out during the time of the GDR. The combination of cobalt, lithium and copper is an indication of the genesis of the mineralized system and the strong possibility of finding source granites and greisen style mineralization we see nearby at Sadisdorf.