BRISBANE, Australia, Sept. 25, 2023 (GLOBE NEWSWIRE) -- Allkem Limited (ASX|TSX: AKE) ('Allkem' or 'the Company') is pleased to announce an update to the Olaroz lithium brine operation located in Jujuy
BRISBANE, Australia, Sept. 25, 2023 -- Allkem Limited is pleased to announce an update to the Olaroz lithium brine operation located in Jujuy Province in Argentina. Allkem has reviewed and updated the Mineral Resources and economics for the Olaroz Lithium Facility including Stage 1 and Stage 2. In April 2022, Allkem released a Technical Report updating key economic metrics for Olaroz Stage 2 and in March 2023, Allkem released a Technical Report updating Mineral Resources.
The Olaroz Stage 2 expansion, targeting an additional 25,000 tpa of lithium carbonate, produced first wet concentrate in July 2023, and is scheduled to commence production in H2 CY2023. Olaroz Stage 1 and Stage 2's cumulative site lithium carbonate production capacity is 42,500 tpa.The Olaroz salar is located in the elevated Altiplano-Puna plateau of the Central Andes.
The last of the 15 new wells for Stage 2 production was completed late in 2022. These production wells are now installed to depths between 450 m and 650 m , and most of the brine production comes from these deeper levels in the Salar on a 1 km grid spacing in the central to eastern area of the Salar, between the original Northern and Southern wellfields.
The historical well production from start of wellfield operation to 30 June 30 2023, is ~291kt of LCE. 286kt thousand tonnes of LCE was depleted from measured resources and 5kt of LCE was depleted from indicated resource over this period.Hydrominex Geoscience was engaged to estimate the lithium Mineral Resources in brine for various areas within the Salar de Olaroz basin in accordance with the 2012 edition of the JORC code .
Additional geophysics has included an extensive gravity and magnetic survey across the basin, that provided information on the basin depth and corroborated the early geophysical interpretation which indicated the basin is more than 1 km deep. Average production well brine chemistry values, from throughout pumping of the wells, have been used as inputs for the resource estimation, in addition to the interval samples historically collected in the upper 200 m.
The resource estimate is limited laterally by the boundaries with adjacent property owner Exar, in the salar to the east and north of the properties owned by Allkem subsidiaries and SDJ entities. The resource estimate is limited at depth by the sediment-basement contact interpreted from the gravity geophysical survey conducted over the basin. Drilling suggests this interpretation underestimates the basin depth.
The block model was constructed with 500 by 500 m blocks, with a 20 m vertical extent . Only the portion of the block inside the salar outline is reported in the resource . The resource estimate was undertaken using Datamine software, with variograms developed for the point samples from the upper 200 m. Estimation was undertaken using ordinary kriging. The ordinary kriging method is the most commonly used kriging method.
BMR porosity data was collected below 200 metres depth, providing extensive porosity data in the Stage 2 holes. Future drilling below 200 metres provides the opportunity to upgrade Indicated Mineral Resources to Measured Mineral Resources status.The Inferred Mineral Resource is defined between 200 or 350 metres and 650 metres in the north of the salar and below 650 metres to the base of the basin.
The Mineral Resource was previously stated with no cut-off grade, considering its large homogeneous nature and location almost entirely on the Salar. As an outcome of internal peer review the Mineral Resource is now stated at a lithium cut-off grade of 300 mg/L, applied based on a breakeven cut-off grade for a projected LCE price of US$20,000 per tonne) over the entirety of the life of mine .
The Olaroz project borefield and ponds have been operating successfully from 2013 and site based lithium processing and sale of lithium carbonate product from 2015 as part of the Stage 1 project development. The Stage 2 development is designed with a substantial increase in the evaporation pond area with the addition of 9 km2 of new ponds. A second processing plant has been built to increase annual production capacity to 42,500 ktpa LCE from the combined Stages 1 and 2.
Inferred Mineral Resources are present beneath and laterally to the volumes of Measured and Indicated Mineral Resources. The Inferred Mineral Resources are not included in current mining studies but are considered a possible source of future brine extraction, when further drilling is completed. The metallurgical process is based on the well-established Silver Peak process, which was adapted for use at the Olaroz project. The project has been producing lithium using the Olaroz process since 2015, with optimisation of the process undertaken during this period.
The Olaroz 2 plant is similar in its general process flowsheet and chemistry to the Stage 1 plant, however it has been designed to provide higher quality technical grade product and improved recovery in the primary carbonation circuit. This is achieved by:A gas fired rotary drying kiln has been used in the Olaroz Stage 2 drying plant, along with additional micronising capacity. A new soda ash bag storage area and mixing plant with the capability to convert to bulk delivery has been designed.
Historical underinvestment and strong EV demand have created a supply deficit, influencing prices and investment in additional supply. Market balance remains uncertain due to project delays and cost overruns. The market is forecast to be in deficit in 2024, have a fragile surplus in 2025, and a sustained deficit from 2033.
Olaroz Stage 1 and 2 production is expected to reach nominal capacity of 42,500 metric tonnes per year of lithium carbonate for an estimated operational life of approximately 32 years. This would result in the production of approximately 543,030 dry metric tonnes of saleable lithium carbonate. When considering both Stage 1 and 2, the total saleable product is estimated to be 1,310,670 dmt of lithium carbonate for the LOM.
Environmental Monitoring aims to obtain data on periodic and seasonal environmental parametres, running quarterly campaigns, in the months of February, May, August and November. The objectives are to verify that environment conditions in the area of influence by the operation remain unchanged or that changes produced are within the approved permissible limits as part of the project operations.
SDJ has agreements with communities in the territory where the Olaroz brine operation is developed, which are the communities of Olaroz Chico and El Toro and provides assistance to the local community, by providing services to community members and employing a significant number of people from the surrounding communities in the current operations.
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