Mt Cattlin lithium due for restart

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A strengthening lithium market has led to a commitment for a $7 million capital spend on the recommencement of production at the Mt Cattlin mine.

Closed for more than three years by Galaxy Resources, the Mt Cattlin mine near Ravensthorpe will undergo restart beginning with fines circuit commissioning in late March 2016.

The $7 million commitment by General Mining fulfils formal agreements made between the companies in June last year, and ensures General Mining will earn an initial 14 per cent equity and 50 per cent profit interest in the project.

Coarse circuit commissioning will occur in late June, with the first export of concentrate to go out in July.

The operation will complete a plant optimisation process in by the end of the year.

With a base case throughput of 800ktpa, yield will increase from 50-55 per cent to 70-75 per cent for spodumene and tantalum pentoxide.

Lithium oxide in concentrate will be a minimum of 5.5 per cent, while mica in concentrate will be reduced from 15-20 per cent to below five per cent.

The companies anticipate that lithium carbonate process will continue to strengthen throughout the year, due to tightening supplies of spodumene concentrate into mainland China.

General Mining and Galaxy Resources have an exclusive offtake agreement with Mitsubishi Corporation for all sales over the next four years, while Galaxy cites the remaining mine life at 18 years.

Galaxy Resources is trading close to a one year high of 20 cents per share, while General Mining is trading at a ten year high of $0.29.