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MarketScreener Homepage  >  Equities  >  AUSTRALIAN SECURITIES EXCHANGE LIMITED  >  AVZ Minerals Limited    AVZ   AU000000AVZ6

AVZ MINERALS LIMITED

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AVZ Minerals : Shareholder Letter - Phase 1 Metallurgical Test Work Results

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10/21/2019 | 10:05pm EST

22 October 2019

Dear Shareholder,

AVZ Minerals Limited ("AVZ" or "the Company") presents to you a more in-depth, contextual interpretive guide for the Manono Lithium and Tin Project ("Manono Project") - Phase 1 metallurgical test work results. This letter includes a general outline of current markets and uses for lithium as well as potential process flow sheets for Manono to produce an initial target spodumene concentrate with a grade of +6%Li2O.

With reference to the following ASX announcements relating to Phase 1 metallurgical test work results released in 2019 (5th & 13th of August; 16th of September and the 9th of October), we present herein the Company's guide that we are confident will assist you further in generating the necessary perspective on our tier one lithium and tin project.

LITHIUM USES AND MARKETS

The metal, minerals, and chemical market analyst, Roskill, has previously highlighted that lithium end-use can generally be divided into two broad market categories: chemical and technical application markets. To understand further on the chemical and technical application markets, please kindly refer to the AVZ'S website.

LITHIUM - DEMAND

Demand for Lithium is currently entrenched in the following applications as shown graphically below in Figure 1:

Figure 1: Lithium applications

  • Batteries - Batteries are possibly the best known lithium application of all. It is where the future lies for lithium demand. Batteries have essentially three main components: cathode, anode and electrolyte. When the cathode and anode are connected via a wire, for example, electrons flow from the anode through the wire to the cathode, creating an electrical current.
    Currently, there are an estimated 80 different lithium-ion battery chemistries in production, with these varying chemistries all exhibiting different characteristics such as capacity and voltage. More are being developed each year. Lithium is typically found in the cathode of the battery, commonly in the form of lithium cobalt oxide, while the electrolyte is commonly in the form of a lithium salt such as LiPF6, LiBF4 or LiCLO4. The anode material is commonly carbon-based, with graphite being the most popular.

Overall, a lithium ion battery's output is around 3.6 volts, which is more than twice as much as its alkaline competitor. The lithium content of various batteries is shown in Table 1 below.

CHEMISTRY

TYPE

LITHIUM CONTENT

PER CELL (g)

Primary batteries

Lithium manganese-dioxide(Li-MnO2)

Button/coin

0.05-0.10

Cylindrical

0.60-4.00

Lithium iron disulfide (Li-FeS2)

Cylindrical

1.35

Lithium thionyl chloride (Li-SOCl2)

Cylindrical

0.60-2.75

Lithium sulfur dioxide (Li-SO2)

Cylindrical

2.10

Secondary batteries

Lithium cobalt dioxide ion (Li-CoO2)

Cylindrical

0.35-0.65

Prismatic

2.46

Lithium ion industrial battery pack (Li-ion)

Prismatic

16.00-26.00

Lithium cobalt dioxide polymer (Li-poly)

Prismatic

0.30-3.10

Table 1: Lithium content on various batteries

  • Lubricant Grease - An estimated US$4 billion market, in which lithium-based greases make up 75%. Lithium-based greases generally have good stability, high temperature characteristics and water- resistance properties.
  • Glass - Lithium typically sourced from the mineral spodumene reduces the viscosity and thermal expansion of glass and therefore leads to increased melting efficiencies and/or larger effective furnace capacities. The end result is a substantial energy saving for the glass manufacturers.
  • Ceramics - Lithium is used in the ceramics industry to produce glazes. The glazes improve a ceramic piece's shock absorption and stain resistance, protecting the piece against damage. Lithium carbonate is typically used for this application.
  • Health Products - Lithium, in small amounts (around 0.170 mg/L), is prescribed to those with bipolar disorders or individuals with depression who don't respond to anti-depressants.

For further general information on supply and demand, visit AVZ's website.

NATURAL MINERAL OCCURRENCES

Lithium occurs naturally in the earth in one of two main forms: brines (salars) and hard rock sources such as pegmatites. The following diagram gives an overall schematic of the simplified process from source to potential end product. Pegmatites will require further processing to achieve final products for market use. AVZ hosts the largest undeveloped spodumene lithium resource in the world within the Roche Dure prospect at Manono.

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Brines require intensive chemical treatment to produce a useable product such as a chloride, hydroxide or carbonate and their chemistry is very variable given that they are a "live system" and are constantly replenishing with new material of different chemical composition. The issue we see here is that with this constant change of chemistry comes a constant change of process technique in order to be able to recover a usable product. We believe that to have a constant feed stock from a hard rock resource is by far the easiest way to achieve a saleable product for current markets. Roche Dure, given its homogeneity and lack of variability is a premium source of constant feed to produce a very high grade product with very low deleterious elements.

Stated simply, the quality (quantity of deleterious elements and lithium grade) of spodumene concentrate (SC) products impacts the conversion process and quality of the lithium chemicals. We are aiming to develop a leading reputation on our SC6 material based on its consistently high grade and low levels of impurities. Creating a consistent and reliable product is paramount in any further processing of spodumene be it sulphate, carbonate or hydroxide. Having a reliable and consistently high grade and clean product is a requirement in a vertically integrated business.

We will not expand further on brines here. Spodumene (which is a lithium pyroxene - LiAl(SiO3)2 ) deposits however, are commonly hosted in pegmatites, which are igneous rocks intruded in a subsurface setting, with interlocking crystals usually larger than 2.5cm in size, of a "granitic" composition. Most pegmatites are formed in sheets of rock as either dykes, veins or as we believe we uniquely have at Manono, as lopoliths.

Most pegmatites are mined by conventional open pit methods, followed by crushing, grinding and extraction using a mixture of gravity, heavy media separation, magnetic separation and flotation to produce a concentrate, largely comprised of spodumene, but with minor amounts of waste minerals including quartz and feldspar.

Invariably, two concentrate qualities are often produced from the same deposit - a chemical grade ("CG") concentrate and a premium technical grade ("TG") concentrate, dependent upon customers' requirements and capital intensity. A common by-product is tin and tantalite and other tantalum minerals. AVZ has the potential to produce an initial chemical grade product for sale to battery manufacturers, but also has the ability to develop, at a later stage, a technical grade product if the planned Phase 2 test work proves positive.

The concentrate can then be further treated, through roasting, to produce ßeta-spodumene for ceramics, and lithium derivatives including carbonate, hydroxides and chloride versions for other uses.

TG concentrates, which are largely used in glass and ceramics applications, particularly in low thermal shock ceramics, require low iron contents (maximum of 0.15% to 0.5% Fe2O3, dependent on use, but the lower levels are preferred), and with LiO2 grades of at least 6.5%.

Specifications for CG concentrate, as used in battery applications, are less strict, with concentrate grades of a minimum of SC5.0, preferred SC6.0, with Fe2O3 of less than 1% being preferred.

AVZ is very confident that it can produce an +SC6.0 concentrate with low iron, fluorine, mica and phosphorous with current test work indicating iron oxide as Fe2O3 in the concentrates of all tests being well below the chemical grade SC6.0 limit of 0.8% and currently above the technical grade limits of 0.25-0.12% at around 0.35 to 0.5% Fe2O3.

Other parameters are used as guidelines for product classification and these are presented as an example in Table 2 - Comparative Specifications for Various Global Hard Rock Lithium Projects.

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AVZ'S METALLURGICAL TEST WORK APPROACH

A well-defined Phase 1 test work program is needed to support engineering cost estimates prepared as part of the Manono Definitive Feasibility Study (DFS). AVZ is confident in the metallurgical discovery process to explain further, and in some detail, to its shareholders the key methodology, findings to date and the potential process recovery flow sheet to produce a spodumene concentrate ready for sale. Manufacturing an +SC6.0 is the first stage in the potential product stream that AVZ is actively pursuing.

Hard rock lithium deposits (pegmatites), like Manono, require only a few flowsheet components in order to produce a lithium rich concentrate for sale: Crushing; mica removal; primary beneficiation (DMS); secondary beneficiation (if required); and by-product recovery.

At Manono and in particular the Roche Dure deposit, lithium resides almost exclusively in the mineral spodumene (LiAlSi2O6) (https://en.wikipedia.org/wiki/Spodumene) and at Roche Dure, we believe that the pegmatite has a unique homogeneity to its mineralisation (low deleterious elements and high purity of grade) and that consequently the lithium rich pegmatite will easily convert to a spodumene mineral rich concentrate.

Current terminology uses the prefix "SC" for spodumene concentrate to differentiate it from brine lithium. This prefix is usually followed by a number, to one decimal place, to define the percentage of lithium within the concentrate. Therefore, SC6.0 will be a 6% lithia concentrate and when lithia resides exclusively in spodumene a maximum lithia grade of 8% corresponds with 100% spodumene source.

The Flowsheet components, needed to produce a spodumene rich concentrate include:

  • ROM (Run of Mine) Ore Crushing. Typically, a 2-stage conventional crushing circuit including primary jaw crushing and secondary cone crushing is required ahead of the final High-Pressure Grinding Rolls (HPGR) crushing stage. All breakage of ore falls under the term, Comminution.
    HPGR crushing is preferred as the final crushing stage and is the industry standard due to the HPGR's ability to: withstand the very high wear rates that accompany lithium hard rock ores: capability of producing a small product size, below that of conventional crushing equipment and having a unique ability in their design to break rock along mineral boundaries to help prevent production of fines material and thus loss of lithia.
  • Mica Removal Process. Mica is not desirable in spodumene concentrates due to its ability to dilute the lithium grade and its possible contamination by elements such as species of iron and fluorine forming part of the mica structure. Iron and fluorine are highly deleterious to the downstream processing of chemical grade spodumene concentrates.
    The industry preferred method to remove mica is by use of an "up-current classifier", which essentially lifts the platy mica out of the product stream using an up-current water flow (Figure 2).
  • Dense Media Separation is a primary beneficiation process that separates minerals from one another according to mineral density differences or commonly known as Specific Gravity or "Particle Density" measured in grams per cm3. Hard rock lithium ores, pegmatites, contain high proportions of quartz and feldspar, which have lower mineral densities than spodumene. For example Quartz = 2.63g/cm3, Feldspar = 2.56g/cm3 and Spodumene = 3.11g/cm3.

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Figure 2: Bench scale Up Current or Reflux Classifier for Mica removal

A typically acceptable mica level is sub 2% but is preferred at 1%. AVZ is on track to produce a very marketable product in this respect. Table 2 below compares AVZ's results to date with various other lithium producers globally. AVZ intends to further improve on these numbers for final production figures.

Table 2 Comparative Specifications for Various Global Hard Rock Lithium Projects

SPODUMENE CONCENTRATE SPECIFICATIONS

AVZ Manono Roche

Producer One

Producer Two

Producer

Producer

Producer Five

Producer Six

Producer

Producer

Dure

Three

Four

Seven

Eight

Initial Testwork

SC5.0 (TG)

SC6.1

SC6.8 (TG)

SC7.2S (TG)

SC7.2P (TG)

SC6.0 (CG)

SC6.0 (CG)

SC6.0 (CG)

SC6.0 (CG)

SC6.0 (CG)

SC6.0 (CG)

SC6.0 (CG)

SC6.0 (CG)

Results SC6.1

Chemistry

P100% 3.35mm

5600um

Li2O

6.1

5.00

6.10

6.80

7.20

7.20

6.00

6.15

6.10

5.95

6.10

5.80

5.61

5.50

Fe2O3

0.34

0.13

0.75

0.20

0.17

0.12

0.80

0.44

0.80

0.54

1.30

0.60

0.74

1.05

SiO2

74.20

65.80

67.10

65.50

64.60

65.90

66.10

63.40

60.50

Al2O3

15.98

23.80

23.90

25.50

26.40

24.10

23.90

24.50

21.95

22.00

CaO

0.18

0.07

0.01

0.65

0.49

2.21

0.45

Na2O

0.57

0.70

0.35

0.28

0.58

0.68

1.09

0.60

K2O

0.52

0.90

0.40

0.14

0.57

0.52

0.65

0.60

P2O5

0.29

0.13

0.09

0.31

0.24

MnO2

0.09

0.05

0.04

0.06

0.03

TiO2

0.02

0.02

0.01

0.07

0.04

0.10

H2O

NR

0.05

0.06

1.58

1.56

5.40

8.00

0.06

9.00

LoI

0.35

0.40

0.20

P

0.12

S

0.004

MgO

0.02

F

0.10

Mineralogy

Mica

1.0 < 2.0*

0.70

NR = Not reported

*Additional testwork to be completed to assist in an improved Mica content

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This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

AVZ Minerals Limited published this content on 22 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 October 2019 02:04:01 UTC

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