Millennial Lithium de-risks Pastos Grandes

Farhad Abasov has high hopes for Millennial Lithium’s (TSXV: ML; US-OTC: MLNLF) Pastos Grandes lithium brine project in Argentina’s Salta province.

The CEO expects a definitive feasibility study (DFS) in the second quarter, and the project can start production as early as 2021, generating 25,000 tonnes of lithium carbonate equivalent (LCE) a year.

In January, the company reported that bench-scale process test work on brine from the project by SGS Canada at its facilities in Lakefield, Ont., yielded battery-grade lithium carbonate (Li₂CO₃). Final purification test work yielded a project that was 99.92% Li₂CO₃, with low levels of magnesium, calcium, boron, sulphate and iron, and no other detectable metals. Typical lithium carbonate battery-grade for electric vehicles is 99.5% Li₂CO₃, the company says.

“We were absolutely delighted to reach such a high percentage of lithium carbonate using standard evaporation and processing techniques,” Abasov told The Northern Miner via email, during a marketing trip to China. “The 99.92% is one of the highest battery-grade products in the world. This will allow us to achieve a higher end price for our product, and should make it quite in demand for battery producers and users.”

The bench-scale testing also provides a framework for the pilot plant, which is in the final design phases, and provides a basis for the potential commercial plant design for the DFS.

In the meantime, resource expansion drilling, which started in mid-2018, will be finished soon and has yielded some of the highest-grade intercepts to date. Exploration well 18-15 returned 236 metres of 500 milligrams per litre lithium, while exploration well 18-17 returned 545 metres of 444 milligrams per litre lithium.

“Because of these excellent results, we have actually increased the amount of drilling for this program,” Abasov says. “We expect to finish drilling by the end of February, with our goal of releasing our updated 43-101, which will expand on our current resource of over 2.1 million tonnes measured and inferred, shortly thereafter.”

The company reported a maiden resource in November 2017 of 2.13 million tonnes of lithium carbonate equivalent (LCE) and 8.14 million tonnes of potash (KCl) equivalent in the measured and indicated resource categories, with another 878,000 tonnes of Li₂CO₃ and 3.26 million tonnes KCl in the inferred category.

The pilot plant under construction at Pastos Grandes, with evaporation ponds in the background. Credit: Millennial Lithium.

Millennial has installed a power facility — a joint solar and diesel generation plant — and has two large test ponds in their final evaporation stage to feed a pilot plant that is being developed to produce 3 tonnes per month of lithium carbonate, using concentrated brine from the pilot ponds on the salar. Pilot ponds filled with brine from pumping well 17-4 in September 2018 are concentrating lithium in preparation for lime treatment to lower magnesium content in the brine.

Brine levels in the ponds continue to drop as the contained water evaporates, with levels indicating nearly 50% volume reduction since the ponds were filled, the company notes. Brine is being transferred to isolated smaller ponds as part of the evaporation concentration and purification process, preparing the concentrate feed to the pilot processing plant.

The company has already completed construction of the pilot liming plant, which will be commissioned early in the first quarter of this year. This will allow for the liming of the brine and eliminating most of the contained magnesium in preparation for feeding the processing plant.

Millennial has also hired Ausenco-Vector to complete the environmental impact assessment for the exploitation stage of the project, and the company is working with WorleyParsons to provide data and project information to Ausenco. According to Millennial, Ausenco says the report will be ready to be submitted to the government in the first quarter, and approval could come as early as the second or third quarter of 2019.

Millennial is fully funded to complete the DFS, and has started securing construction financing, which it plans to conclude in 2019. “We’ve been working diligently in laying the groundwork for financing Pastos Grandes and prepare the project for production in 2021,” Abasov says. Our early PEA capex numbers came in at US$410 million. We expect to achieve this in a combination of different financing tools, such as debt, equity, and offtake or lithium prepayment contracts, very similar to what we did with Allana Potash.”

Abasov served as president and CEO of Allana Potash Corp., a potash development company that was sold to Israel Chemical Ltd. for US$170 million in 2015.

The mining executive has spent the last 15 years founding and managing natural resource companies. He served as executive chairman of Rodinia Lithium, another company developing lithium brine assets in Argentina, and before Allana was a co-founder of Potash One, which was acquired by German potash company K+S for US$430 million in 2010. Before Potash One, Abasov was a senior vice president, strategy, at Energy Metals, which was acquired by Uranium One for US$1.8 billion in 2007.

“The Allana and Rodinia projects were both solar evaporation, which is the same as Millennial Lithium, so we are very comfortable with the project.”