Lithium is all the rage these days and for good reason, with the world going increasingly electric and viable sources of near-term lithium supply insufficient to meet projected demand. There are plenty of lithium exploration projects on the go, yet grade, location and other factors suggest few will go into production anytime soon.
Tantalex Lithium Resources (CSE:TTX) is in the enviable position of having a tin and tantalum project readying for production in Q1 2023, a lithium project heading for production by 2025 and a huge lithium pegmatite exploration project soon to see its first drilling ever. And expectations for the pegmatite project are high, sitting, as it does, near one of the world’s largest undeveloped hard rock lithium resources.
Tantalex President and Chief Executive Officer Eric Allard is a veteran of mining in Africa and knows well the country in which his team operates, the Democratic Republic of the Congo, or DRC. In a recent interview with Canadian Securities Exchange Magazine, Allard discussed working in the DRC and outlined timelines to production and exploration for the company’s projects.
Tantalex has three projects that collectively involve lithium, tantalum and tin. All are in the DRC and two are progressing toward production. Tell us about your experience in the DRC and the various aspects of working there.
The DRC is a very mining-focused country, so the procedures, regulations and administration for mining companies are clear. There is a mining code, a mining law and many mining companies operate there: Barrick is one, Glencore, Trafigura, ERG. They focus mainly on copper and cobalt.
The DRC is a very favourable jurisdiction in that regard. The challenge is administration. Because mines in the DRC are so rich, and mining represents such a large portion of the government’s annual revenue, they don’t so much see the difference between junior exploration companies and producing companies. Moving forward as a publicly listed junior mining company can be challenging in the DRC because they are used to overseeing producing companies, and it is a different mindset.
Looked at another way, the DRC resources are so rich that they do not really look for investors either. Investors come to them.
We are fortunate because the DRC has stated that it is very interested in developing the electric vehicle battery metals space, lithium being one of the big elements. The biggest hard rock undeveloped resource was discovered a few years ago in the Manono area: 400 million tonnes at 1.65% Li2O, which is one of the most incredible LCT (lithium-cesium-tantalum) pegmatites ever. And that’s in the region where we are.
Because we are operating tailings reclamation projects, our speed to market and ability to bring our projects to production is a big advantage. Seeing as we will likely be the first lithium producer in the DRC, we are getting a lot of support from the government.
What about obtaining permits and finding skilled workers?
There are no surprises as you go along. As long as you follow the procedures, the government will act upon them. As an example, we recently obtained a mining permit for our TiTan tin and tantalum project.
As far as human resources, Manono is a fairly remote area, but because the DRC is a mining country, there are a lot of very qualified technicians, engineers and tradespeople available. That’s a big advantage compared to many other mining jurisdictions around the world that are suffering from serious labour shortages.
You just mentioned receiving permits for TiTan. What comes next?
We had to work with the government on getting a better road to reach the project, and that is almost complete. We will be pouring the concrete foundations in December. It is a $10 million investment, and we anticipate two to three months for construction. Commissioning is scheduled for March, and the start of production shortly thereafter.
Can you walk us through TiTan’s economics and what this does for the company’s financials?
Production is planned to be 120 tonnes of tin concentrate per month and 20 tonnes of tantalum concentrate per month with a plant capacity throughput of 130 tonnes per hour.
On average, we are looking at about US$2.5 million to $3 million of revenue per month at today’s commodity prices, which would generate around $1 million to $1.5 million per month in net cash flow. The objective is to use it for the development of our other projects and also phase two and three of TiTan.
Talk to us now about the Manono Tailings project and the pegmatite corridor. Looking at maps of the projects, they seem to sit in a line.
They do, and that is a big advantage because our team can be working simultaneously on all three projects. The TiTan project is 40 kilometres southwest of the Manono Tailings project, so it’s all in close proximity.
Our flagship is really the Manono Tailings project. It comes from an old tin mine that operated from 1913 to the 1980s. The mine focused on tin and tantalum and never exploited the lithium. We bought into the tailings licence in 2018, and there are 11 dumps and processed tailings terraces. We conducted a drone topographic survey of the entire concession area and confirmed 105 million tonnes of material on surface.
A year and a half ago we identified where we would start drilling, targeting dumps with a higher presence of pegmatite, and we drilled on about half of the total dumps. We identified from our 13,000 metres of drilling a very interesting resource in the southwest portion.
We released the maiden resource for the Manono Tailings project on December 15 of this year, with 12.09 million tonnes at an average grade of 0.64% Li2O and a little under half already in the Measured and Indicated category. This allows us to proceed immediately with our phase one project to produce about 100,000 tonnes of spodumene concentrate per year at 6% Li2O (SC6) for an initial mine life of six to eight years.
With SC6 lithium concentrate foreseeably selling above US$4,000 per tonne for the next six to eight years and extremely low mining costs, you can see why we are so excited.
We are aiming to be in production by 2025.
And the pegmatite corridor is pure exploration at this point, is that correct?
Yes, our focus is to get the Manono Tailings project into production as soon as possible and take advantage of the supply shortage in the lithium space to generate substantial revenue for the company. We have already initiated a feasibility study and environmental and social impact studies, and we are targeting the completion of the feasibility study by June 2023. A PEA (Preliminary Economic Assessment) will likely be issued in March.
The pegmatite corridor is the blue sky potential. It is a 25 kilometre corridor immediately adjacent and down strike to the 400 million tonne 1.65% Li2O hard rock resource I mentioned earlier. All geology indicates the pegmatites that formed the historical mine extend to the southwest onto our properties. There are showings on surface of the pegmatites, but the corridor on our properties has never been drilled. We actually just started drilling there.
Let’s look beyond just mining for a moment. Tantalex supports community efforts in the DRC. What can you tell us about these and your motivation for being involved?
It’s a win-win. We are in partnership with the government with these efforts. The government relies on us to help NGOs and local populations, and by us doing so, it brings everyone closer.
It’s a case of becoming a citizen of the country. We are not there just to prove up a resource. The ultimate goal is sustainability. And to have a sustainable operation when we plan to be in the DRC for the long term, we have to work with the community and help people as much as we can, and they will help us in return. That’s what we are doing right now, and it is wonderful to see.
This latest medical campaign that we’ve supported, involving an NGO called Upright Africa, is just fantastic. It involved medical teams coming in and providing health care. Founder John Woods is a retired US doctor and has been in and out of Africa for the past 10 years, in war zones and lots of situations.
The Manono area was a thriving mining community for 80 years, and when the mine stopped so did everything else. Manono was forgotten by the rest of the world, but because there is more mining now, there is more hope. Doctors came in, and they were able to inaugurate a new hospital and get operations going.
To see this happening not only helps people who are ill but gives hope to others. That’s what they need – they need to feel that somebody is there to help them out. The mortality rate for children under 12 is close to 40%. And they are dying from things that don’t make sense in 2022.
You are based in Canada, but the projects require a lot of expertise on the ground, and I see you had metallurgical work done in South Africa. Talk to us about operating advanced projects overseas.
I’ve spent most of my career on the ground, and our team is also very experienced in Africa. Most of the members of our board have worked or are still working in Africa. We have a team of about 100 in the DRC, so we have surrounded ourselves with experienced managers, operators and workers. For us, it is nothing new. It is just our normal area of work. It is very remote, and there are always the challenges of Africa, but it is our experience that enables us to operate there effectively.
Is there anything we have missed?
To summarize, we are a company which is a near-term cash flow producer for three extremely strategic commodities: lithium, tin and tantalum, and also one with blue sky potential for much more discovery on our additional 1,200 square kilometres of exploration concessions around Manono. I think we have great assets and great people, and the timing could not be better for us. It is the best of all worlds.
This story was featured in Canadian Securities Exchange Magazine.
Learn more about Tantalex Lithium Resources at tantalexlithium.com.