- Jindalee Resources Limited (ASX:JRL) has recently completed a preliminary scoping study at its McDermitt Lithium project.
- The study results indicate positive economic and operational outcomes.
- The study outcomes support Jindalee’s ongoing focus on de-risking the project via metallurgical, drilling, and environmental studies.
In a significant development, Jindalee Resources Limited (ASX:JRL) has announced the completion of a preliminary scoping study at its wholly owned McDermitt Lithium project. The preliminary Scoping Study has been undertaken to determine the viability of an open pit mining operation with on-site extraction and purification facilities for the production of lithium carbonate.
The key study results highlight the potential of the McDermitt Project to support a feasible standalone lithium mining and processing operation. Moreover, the outcomes reinforce the significance of McDermitt project as a possible long-life source of future supply to the rapidly developing US battery manufacturing industry.
Preliminary Scoping Study results
Jindalee informed that technical studies have been completed by independent experts for the McDermitt project. The independent consultants for the preliminary Scoping Study include Cube Consulting for mining; GR Engineering Services for process engineering, capital, and operating cost estimation; and MineGeoTech for geotechnical assessment.
The study results indicate positive economic and operational outcomes. The study envisages an open pit mining operation processing ore by way of sulphation roasting for the production of battery grade lithium carbonate. In addition, the study discovers opportunities for further optimising the processing flow sheet to lower operating costs.
The study confirms McDermitt’s potential to produce high quality lithium carbonate and supply American battery makers for decades. In a nutshell, the study outcomes support Jindalee’s ongoing focus on de-risking the project via metallurgical, drilling, and environmental studies.
The table below demonstrates the results for key operational metrics from preliminary McDermitt Scoping Study:
It is worth noting that complete financial and operational metrics have not been released owing to regulatory constraints, given the proportion of Inferred Mineral Resource used in the Study.
Recommendations from preliminary Scoping Study
The key recommendations from the Study are summarised in the figure below:
Image Source: Company Announcement (16 September 2021)
Most of the geological and geotechnical recommendations in the Study are expected to be addressed by the upcoming diamond and reverse circulation drill program at McDermitt. Moreover, these drill programs are likely to supply additional sample material for metallurgical testwork.
In determining the preferred development route for Jindalee’s McDermitt project, identification of the optimal processing flowsheet remains the most crucial factor.
Strong lithium market
The encouraging preliminary Scoping Study results provide a starting point for the McDermitt project in a robust lithium market.
Jindalee highlighted that the lithium market has seen a substantial uplift over the last one year, driven by the global political and social push for electrification of the transport sector. An important component for the Electric Vehicle revolution is the raw material like lithium required for battery production.
Currently, the US produces 5,000tpa lithium carbonate equivalent (LCE), with demand expected to reach 331,000tpa LCE by 2030. As per a recent market report from Roskill, the demand in the battery sector is expected to be dominated by the automotive industry over the next 10 years.
The most recent forecasts for lithium carbonate show prices will be relatively flat through to 2026, then will increase in accordance with the predicted supply deficit while putting upward pressure on the price.
In terms of environmental and planning, Jindalee is currently progressing with mineral exploration activities under ‘Notice’ level permits with the Bureau of Land Management, and Exploration Permits via the Oregon Department of Geology and Mineral Industries (DOGAMI). The next phase of permitting is an Exploration Plan of Operations which will involve initiating a series of baseline environmental studies.
Notably, the Company has planned the infill drilling and metallurgical testwork for the fourth quarter of 2021. The testwork is expected to enable publication of more detailed Project metrics by mid-2022.
Jindalee shares are currently trading at AU$3.00 as of 3:00 PM AEST.