Allkem is taking advantage of the buoyant lithium market after reporting record quarterly revenue from its Mt Cattlin lithium mine in Western Australia.
Mt Cattlin produced 48,562 dry metric tonnes (dmt) of spodumene concentrate and shipped 66,011 dmt of the product in the three months to March 31, which amounted to $US143.8 million ($195.5 million) in revenue from the mine at a gross cash margin of 84 per cent.
The Mt Cattlin realised lithium price was $US2178 ($2961)/dmt CIF (cost, insurance and freight) for the quarter. By comparison, Allkem sold spodumene at $US1620 ($2202) per dmt from the mine in the December quarter of 2021 and $US796 ($1082)/dmt in the September quarter of 2021.
Allkem said advanced discussions were progressing for Mt Cattlin spodumene pricing in the June quarter of approximately $US5000 ($6797)/dmt SC6 (six per cent lithium oxide content) CIF on sales of approximately 50,000 tonnes.
The company said it had not been immune to the effects of COVID-19, which has impacted its guidance for the 2022 financial year (FY22).
“Due to closure of the WA border for most of the quarter, total forecast mining volume has been revised down and as a result cash cost of production for FY22 has been revised down to $US380-410 tonne,” Allkem said in a statement.
“Mining activities in the June quarter will prioritise ore and forecast production volumes will continue to be supplemented from low-grade ore stockpiles.”
Allkem’s FY22 guidance for Mt Cattlin spodumene production is between 200,000-210,000 dmt at an average grade of 5.5-5.7 per cent Li2O (lithium oxide). The company achieved an average grade of 5.4 per cent Li2O from the operation during the March quarter.
The lithium miner commenced a three-phase resource extension drilling program at Mt Cattlin in April as it looks to extend the mine life. The program will total 147 holes for 32,685 metres of reverse circulation (RC) drilling.
“Drilling in the first two phases will target the immediate extension to mine-life at depth,” Allkem said. “The first phase is aimed to convert 3.2Mt (million tonnes) of inferred to indicated resource category and the second phase will test two pegmatite lenses along strike and at depth, immediately north of current mine operations.
“A scoping study will also be conducted to evaluate either the open-cut or underground development of resource extensions. The third phase will explore ore body extensions to the south-west of current mining operations.”