Avalon completes Big Whopper study

A prefeasibility study of the Big Whopper petalite deposit, north of Kenora, Ont., has boosted the total resource of the Separations Rapids project by 64% to 11.6 million tonnes grading 1.34% Li2O.

The study, prepared by Micon International for project operator Avalon Ventures (AVL-V), outlines a probable resource within a conceptual open pit of 5.6 million tonnes grading 1.41% Li20, using a cutoff grade of 1%. The estimated petalite content is 1.2 million tonnes.

Micon’s pit design is 840 metres long, 250 metres wide and 110 metres deep. The stripping ratio is estimated at 3.2-to-1; the overall pit slope, at 45.

The cost of mining ore and waste is estimated at $4.02 per tonne, whereas processing costs are pegged at $29.65 per tonne of ore. Capital costs (including working capital) to the end of the first year are expected to be

in the range of $42 million.

The study envisions first-year production of 21,200 tonnes of high-grade petalite, 25,400 tonnes of petalite-feldspar mix, 46,200 tonnes of sodium

feldspar, 9,400 tonnes of potassium feldspar, 8,400 tonnes of spodumene, 22,200 tonnes of mica, and 12.6 tonnes of tantalum minerals.

Production is expected to rise by 20,000 tonnes each year, reaching 300,000 tonnes annually in year six and remaining constant thereafter over the

balance of a 20-year mine life. Based on market prices and transportation costs estimated by Hains Technology Associates, the project is expected

to generate average revenue of $93.97 per tonne of petalite processed.

Assuming a debt-to-equity ratio of 75:25, the project is expected to yield a return on equity of 21% and a net present value of $16.8 million at a

10% discount rate (or $38.7 million at a 5% discount rate).

Hains estimates the market would be capable of accommodating 20,000 tonnes of high-quality rubidium potassium feldspar product from the Big Whopper.

The company is proceeding with a full feasibility study that will include delivery of a 500-tonne high-purity petalite concentrate sample to a major potential customer, Corning Consumer Products Company, as well as samples for end-users in Japan and Europe. The study will take 8-12 months to

complete and cost $6 million.

Avalon is considering using an existing mill in northern Ontario as a pilot plant and ultimately relocating the mill to the project site.