Azure Minerals (ASX: AZS) shares are down 16% on the day over the results of test works at Andover. Yes, it is possible to extract the lithium into a concentrate from the spodumene. But so far at least it’s a lower grade concentrate with a high level of undesirables in it. This will not gain a premium price out on the market. Of course, as the company points out, this is very early stage in planning the processing, but it’s still not quite what people would like to be hearing.
The important parts of the announcement: “The flotation testwork was carried out on the whole-of-ore sample at a grind size of P100 212 µm, with no DMS being undertaken prior to flotation. The spodumene concentrate produced returned a grade of 5.59% Li2O with a recovery of 82.37%.” Well, no, not really - 6% is the premium product. And this is not good either: “Analysis for deleterious elements in the concentrate is provided in Table 2. It is noted that, the iron (III) oxide value is slightly higher than was expected based on the results of the mineralogical analysis.” That value is too high for a decently shippable product.
On the other hand Azure are entirely correct in that this is the first pass. There are good and sensible things that can be done to upgrade this - things that would likely be done anyway. So being able to produce a low iron 6% concentrate yes, that looks between highly likely and near certain.
Azure Minerals share price from Google Finance
We’ve talked before of Azure Minerals: “Azure Minerals (ASX: AZS) is up 34% today on very preliminary news of a lithium find. Actually, it's so preliminary that the board has had to release a second information sheet pointing out how preliminary it is. They've got the right mineral but aren't sure how much lithium there is in it. This is value additive, the information so far, but those pesky little details do matter as to how valuable it actually is.”
And then again about Azure: “Azure Minerals (ASX: AZS) shares are up another 23% this morning. AZS shares are now up some 730% on the six months which is pretty impressive for an exploration miner. For, by definition, what we’ve got at present is indicative of an interesting and economic lithium deposit, not proof of it. Sure, the indications are looking very good but we still don’t have that proof.”
This latest news is another brick in that wall of necessary proof. They’ve the rock, the mineral, the lithium content, they can at least roughly process it. What’s bringing the price down is perhaps that there was more hope built into it from those earlier announcements than it all really quite warranted.
