Western Australia's government has granted environmental approvals for a 400 hectare expansion to LeadFX Inc.'s Paroo Station lead mine and build a facility on-site to pioneer a chemical process rather than a traditional smelting process to produce metal ingots.
An acid will be used to leach the lead from concentrate and recover lead metal using conventional electrowinning equipment and melting to create lead bars, known as ingots, which avoid the need to handle and transport concentrate and eliminate the risk of accidental spillage when transported.
In a Nov. 18 statement, the government said the new process is expected to create a safer environmental outcome than historic lead processes, with about 70,000 tonnes of lead metal per annum due to be processed through LeadFX subsidiary Rosslyn Hill Mining Pty Ltd.'s operations.
It will also be the first time a chemical process will be used on-site to produce metal ingots rather than a traditional smelting process.
The Environmental Protection Authority-approved mine site will create up to 300 jobs during construction and up to 250 ongoing jobs once operations start in 2020.
LeadFX's Perth, Australia, based CEO and Managing Director Andrew Worland said the approval was a key condition to finance the project which is unique as lead carbonate is not mined anywhere else in the world.
Worland told S&P Global Market Intelligence the methanesulphonic acid process simplified the environmental footprint and would "significantly decrease the overall operating costs and make it more sustainable over the longer-term."
He said LeadFX's project was running the risk of becoming unpredictable in terms of costs before his company signed an agreement with InCoR Technologies Ltd. and InCoR Energy Materials Ltd. to transfer lead-refining technologies.
While the hydrometallurgical plant definitive feasibilisity study released in February pegged the facility's costs at US$151.1 million, Worland said LeadFX is currently updating those estimates with an eye to reducing costs further.
"We've gone back and replicated the processing circuit through some trials at a laboratory to demonstrate to financiers that we can do the process end to end," he said.
Once those engineering and metallurgical reports and cost estimates have been completed, LeadFX will be on the road marketing the project, and Worland said the project financing would comprise a "significant amount" of debt financing, and possibly offtake arrangements.
He said a number of the dozen banks from both Australia and overseas which LeadFX has spoken to over the past 10 months have been in the project's data room for "high-level, first-pass due diligence," with some indicative terms already presented to the company that are subject to further due diligence.
"We think there are a number of banks that will participate in the funding of the project. We haven't found that there is a shortage of institutional financing available for the project," he said.
LeadFX hopes to finance the project by the end of the first quarter of 2019.