1. Executive Summary
Indicative dashboard. Replace assumptions with drill results, assay data, metallurgical reports, legal documents, and mine plan.Validation Objective
Confirm whether the mine can reliably supply suitable lithium feed for a lithium sulphate plant before committing USD 40M–50M chemical plant capex.
Current View: Conditional
Key Investment Question
Does the mine have enough confirmed spodumene resource, grade, mine life, and metallurgical performance to support at least 25,000 tonnes per year of 6% Li₂O concentrate feed?
Main Red Flags
Low grade, non-spodumene lithium minerals, high impurities, poor recovery, weak title, short mine life, high strip ratio, water constraints, and local community or environmental issues.
No EPC before mine validation
Investment gate: the lithium sulphate plant should not proceed to full EPC until the mine passes geological, metallurgical,
legal, ESG, and commercial-feed validation.
2. Mine Validation Snapshot
Base-case assumptions for validation planning.Mine Acquisition Cost
$0.8M
Purchase or licence-entry assumption
Target Ore Grade
≥1.2%
Preferred average Li₂O grade
Minimum Ore Grade
1.0%
Only if costs and recovery are strong
Concentrate Target
6%
Li₂O spodumene concentrate
Target Concentrate Feed
25 ktpa
For lithium sulphate plant
Required Ore Feed
170–220 ktpa
Depends on grade and recovery
Target Mine Life
7+ yrs
Minimum comfort for plant investment
Validation Status
Pending
Requires drilling and testwork
3. Validation Gates
Mine must pass these gates before chemical plant investment.| Gate | Question | Minimum Pass Criteria | Status |
|---|---|---|---|
| Gate 1: Title | Does Rashmi have clean mining/exploration rights? | Verified licence, no encumbrance, transferability confirmed | Required |
| Gate 2: Mineralogy | Is the lithium mainly spodumene? | Spodumene-dominant ore suitable for concentrate and sulphate route | Required |
| Gate 3: Grade | Is average Li₂O grade commercially attractive? | Preferred ≥1.2% Li₂O; minimum 1.0% Li₂O | Required |
| Gate 4: Tonnage | Is there enough ore for mine life? | Resource supports 7+ years at planned feed rate | Pending |
| Gate 5: Recovery | Can the ore produce 6% Li₂O concentrate? | 70%+ beneficiation recovery and acceptable impurity profile | Required |
| Gate 6: Mining Cost | Can ore be mined at low enough cost? | Strip ratio, hardness, haulage, and dilution within model limits | Pending |
| Gate 7: ESG | Can project secure environmental and social approvals? | EIA path clear, water available, community risk manageable | Required |
| Gate 8: Plant Feed | Can mine supply consistent feed to sulphate plant? | 25 ktpa concentrate supply, stable grade, reliable logistics | Required |
4. Geology and Mineralogy
Mineralogy determines whether the lithium sulphate route is technically suitable.Lithium Mineral Suitability
| Mineral | Suitability for Sulphate Route | Comment |
|---|---|---|
| Spodumene | Preferred | Best fit for concentrate → calcination → sulphate route. |
| Petalite | Possible | May need different processing assumptions and testwork. |
| Lepidolite | Higher Risk | Different chemistry; often higher impurities and more complex process. |
| Mixed pegmatite | Test Required | Can work only if mineralogy and recovery are proven. |
Target Mineral Composition
5. Resource and Grade Validation
Assay results and resource classification should replace indicative values.Grade Sensitivity to Concentrate Feed
Resource Confidence Requirement
| Classification | Use in Investment Decision | Minimum Requirement |
|---|---|---|
| Exploration Target | Not enough for investment | Fail for EPC |
| Inferred Resource | Early economic screening only | Insufficient alone |
| Indicated Resource | Supports feasibility and mine planning | Required |
| Measured Resource | Strongest confidence | Preferred |
| Probable / Proven Reserve | Bankable mine plan | Ideal before full financing |
Minimum Tonnage Calculation
| Parameter | Indicative Value |
|---|---|
| Annual concentrate required for sulphate plant | 25,000 tonnes per year |
| Concentrate grade | 6% Li₂O |
| Ore grade assumption | 1.2% Li₂O |
| Beneficiation recovery assumption | 72% |
| Approximate ore required per year | 173,600 tonnes per year |
| Minimum mine life target | 7 years |
| Minimum mineable ore target | ~1.2 million tonnes ore |
Calculation: concentrate output depends on ore grade, concentrate grade, and recovery. Add mining dilution, losses, and contingency before final design.
Grade Threshold Decision
| Average Li₂O Grade | Decision View | Comment |
|---|---|---|
| <0.8% | Reject / Rework | Likely too weak unless very low-cost and large scale. |
| 0.8%–1.0% | High Risk | May struggle to support chemical plant economics. |
| 1.0%–1.2% | Conditional | Possible if recovery, strip ratio, and logistics are strong. |
| 1.2%–1.5% | Preferred | Better base-case feed for 4–5 year payback ambitions. |
| >1.5% | Strong | Provides downside protection and plant-feed flexibility. |
6. Metallurgical Validation
Metallurgy is critical because the sulphate plant depends on consistent concentrate quality.Required Testwork Program
| Test | Purpose | Pass Criteria |
|---|---|---|
| Mineralogy / XRD / QEMSCAN | Confirm lithium mineral and gangue minerals | Spodumene-dominant preferred |
| Assay program | Confirm Li₂O and impurities | Grade ≥1.2% preferred |
| DMS test | Check coarse concentration ability | Useful pre-concentration if effective |
| Flotation test | Produce 5.5%–6% concentrate | 6% Li₂O at 70%+ recovery preferred |
| Calcination test | Alpha to beta spodumene conversion | High conversion without excessive energy |
| Acid roast test | Check sulphation efficiency | Strong lithium extraction |
| Leach and purification test | Confirm impurity removal | Product meets buyer specification |
Recovery Sensitivity
Impurity Watchlist
| Impurity | Why It Matters | Risk |
|---|---|---|
| Iron | Can affect product quality and buyer acceptance | High |
| Magnesium | May increase purification cost | High |
| Calcium | Scaling and purification impact | Medium |
| Sodium / Potassium | Can affect downstream conversion | Medium |
| Fluorine | Process, corrosion, and ESG concern | High |
| Phosphorus / mica minerals | May complicate flotation and product quality | Medium |
Concentrate Specification Target
| Parameter | Target | Status |
|---|---|---|
| Li₂O grade | 5.5%–6.0% | Test Required |
| Moisture | <8% | Buyer dependent |
| Iron | Low / buyer specification | Test Required |
| Particle size | Suitable for calcination feed | Test Required |
| Consistency | Stable monthly production | Required |
7. Mining Method and Cost Validation
Mining economics affect concentrate cost and lithium sulphate ROI.Mining Cost Stack
Mining Assumption Table
| Parameter | Target / Assumption | Risk Comment |
|---|---|---|
| Mining method | Open pit preferred | Underground increases cost and complexity |
| Strip ratio | <5:1 preferred | Higher strip ratio can damage ROI |
| Dilution | <10% preferred | Dilution lowers effective Li₂O grade |
| Ore loss | <5% preferred | Ore control system required |
| Ore hardness | Moderate preferred | Hard ore increases crushing/milling power |
| Mining cost | $25–45/t ore target | Indicative only |
| Ore haulage | Short haul preferred | Long haul increases feed cost |
8. Drilling, Sampling, and Assay Plan
Validation program should prove grade continuity and recoverability.Recommended Validation Program
| Workstream | Scope | Output |
|---|---|---|
| Desktop review | Historical maps, licences, reports, prior assays | Initial risk screen |
| Field mapping | Pegmatite mapping, structures, outcrops | Geological model |
| Trenching / channel sampling | Surface grade continuity | Near-surface grade evidence |
| RC drilling | Fast resource confirmation | Grade and thickness data |
| Diamond drilling | Core for geology and metallurgy | Structural, density, and metallurgical samples |
| Bulk sample | 5–20 tonnes representative ore | Beneficiation and sulphate testwork |
| QA/QC | Standards, blanks, duplicates, umpire lab | Assay reliability |
Validation Timeline
9. Mine Validation Budget
Indicative budget before committing to USD 40M–50M plant capex.Validation Budget Breakdown
Cost Breakdown Table
| Validation Workstream | Low | Base | High |
|---|---|---|---|
| Legal title and licence due diligence | $50k | $100k | $250k |
| Desktop study and geological model | $50k | $150k | $300k |
| Field mapping and sampling | $100k | $250k | $500k |
| RC drilling program | $300k | $750k | $1.5M |
| Diamond drilling program | $500k | $1.2M | $2.5M |
| Assay and QA/QC | $100k | $300k | $700k |
| Bulk sample and transport | $100k | $250k | $600k |
| Beneficiation testwork | $150k | $400k | $900k |
| Calcination / acid roast / sulphate testwork | $200k | $600k | $1.2M |
| Environmental and social baseline | $150k | $400k | $900k |
| Mining study and preliminary mine plan | $150k | $350k | $800k |
| Independent resource report | $200k | $500k | $1.0M |
| Contingency and owner costs | $250k | $750k | $1.5M |
| Total Mine Validation Budget | $2.3M | $6.0M | $12.65M |
The base validation budget is small compared with the risk of committing USD 40M–50M to a chemical plant without proven mine feed.
10. Mine Quality Impact on Lithium Sulphate ROI
Mine grade and recovery directly affect sulphate plant payback.ROI Sensitivity by Grade
Grade and Recovery Decision Matrix
| Grade / Recovery | 60% | 72% | 82% |
|---|---|---|---|
| 0.8% Li₂O | Reject | High Risk | Possible |
| 1.0% Li₂O | High Risk | Conditional | Good |
| 1.2% Li₂O | Conditional | Preferred | Strong |
| 1.5% Li₂O | Good | Strong | Excellent |
Mine Validation Economics
| Item | Value | Comment |
|---|---|---|
| Mine acquisition | $0.8M | Initial entry cost |
| Base validation budget | $6.0M | Before plant EPC |
| Total pre-EPC exposure | $6.8M | Manageable compared with plant capex |
| Lithium sulphate plant capex | $40M–50M | Should only follow validation |
| Base plant EBITDA target | $9M/year | ~5-year payback on $45M capex |
| 4-year payback EBITDA target | $11.25M/year | Requires strong grade, recovery, and offtake pricing |
Plant Feed Suitability Score
62 / 100
Pending Mine Validation
Score should increase only after drilling, mineralogy, beneficiation recovery, sulphate testwork, and resource confidence are confirmed.
11. Mine Validation Risk Register
Critical mine risks before chemical plant commitment.| Risk | Description | Rating | Mitigation |
|---|---|---|---|
| Title risk | Licence ownership, transfer, boundary, or encumbrance problems. | Critical | Independent legal title verification before payment milestones. |
| Mineralogy risk | Ore may not be spodumene-dominant. | Critical | XRD/QEMSCAN and metallurgical confirmation. |
| Grade risk | Average grade may be below investment threshold. | Critical | Drilling, channel sampling, QA/QC assay program. |
| Resource size risk | Mine may not support 7+ years of feed. | High | Resource drilling and independent resource estimate. |
| Recovery risk | Ore may not produce 6% concentrate at 70%+ recovery. | Critical | DMS/flotation testwork and pilot-scale beneficiation. |
| Impurity risk | Iron, magnesium, fluorine, mica, or other impurities may affect product quality. | High | Impurity profiling and purification testwork. |
| Mining cost risk | High strip ratio, dilution, hardness, or haulage can increase cost. | High | Mine plan, geotechnical study, cost model. |
| Water risk | Processing and mining may require water availability. | High | Hydrology study and water permits. |
| Community risk | Local opposition, land access, or employment disputes. | Medium | Community engagement and benefit plan. |
| ESG permitting risk | EIA or environmental approvals may delay project. | High | Start baseline studies early. |
| Infrastructure risk | Roads, power, and logistics may not support operations. | High | Site infrastructure and logistics study. |
12. Decision Framework
Go / no-go screen before committing to lithium sulphate plant EPC.Decision Scorecard
| Criteria | Weight | Current Score | Weighted Score |
|---|---|---|---|
| Legal title clarity | 15% | 50 | 7.5 |
| Spodumene mineralogy | 15% | 55 | 8.3 |
| Average grade | 15% | 60 | 9.0 |
| Resource size / mine life | 15% | 55 | 8.3 |
| Beneficiation recovery | 15% | 50 | 7.5 |
| Sulphate testwork fit | 10% | 50 | 5.0 |
| Mining cost and strip ratio | 10% | 60 | 6.0 |
| ESG and infrastructure | 5% | 65 | 3.3 |
| Total | 100% | 54.9 / 100 |
Board Recommendation
55 / 100
Proceed with Mine Validation Only
Do not proceed to lithium sulphate plant EPC yet. Spend on mine validation first. The mine is attractive only if it proves grade, spodumene mineralogy, recovery, clean title, and sufficient mine life.
| Decision | Condition |
|---|---|
| Proceed | Only with legal title clean, grade ≥1.2% Li₂O, 7+ year mine life, and 70%+ recovery. |
| Renegotiate | If grade is 1.0%–1.2%, mine life is short, or recovery is uncertain. |
| Reject | If grade is below 1.0%, mineralogy is unsuitable, title is weak, or 6% concentrate cannot be produced. |
13. Recommended Next Steps
| Priority | Action | Reason |
|---|---|---|
| 1 | Complete licence/title due diligence | Avoid buying an asset with legal defects. |
| 2 | Run mineralogy and assay testing | Confirm spodumene and grade. |
| 3 | Design drilling program | Validate tonnage, continuity, and mine life. |
| 4 | Collect bulk sample | Test beneficiation and sulphate conversion. |
| 5 | Run DMS/flotation and acid roast testwork | Confirm 6% concentrate and lithium sulphate suitability. |
| 6 | Prepare preliminary mine plan | Estimate strip ratio, dilution, mining cost, and ore schedule. |
| 7 | Start ESG baseline and water study | Identify environmental and social blockers early. |
| 8 | Update lithium sulphate ROI model | Use actual grade, recovery, and feed cost. |