Kang Wan Chern

SINGAPORE (Feb 24): Alliance Mineral Assets (AMA) has seen heavy trading since announcing on Feb 13 that it could be in business by year-end.

The Catalist-listed lithium and tantalum miner has confirmed the presence of high-quality grades of lithium at unusually high concentration levels of 7.1% at its Bald Hill Project near Perth in Western Australia.

AMA CEO Tjandra Pramoko and his wife, executive director Simone Suen, acquired the Bald Hill Project in 2008 to mine for tantalum. Exploration activities had been conducted at the mine since the 1960s, and tantalum mining done in the area since the 1970s. According to Tjandra, 97% of the mine is still undeveloped.

Now, AMA is exploring the 59,000ha site for lithium in a 50:50 joint venture (JV) with Australian miner LithCo. The JV was signed last June.

LithCo has invested A$20 million ($21.8 million) in the JV, comprising A$7.5 million for exploration and feasibility studies entitling it to 50% interest in the lithium rights at Bald Hill &ndash and another A$12.5 million in capital expenditure, giving it the right to earn 50% interest in all the minerals mined and processed.

&ldquo There is always a suite of minerals in a single mine. So, when there is tantalum, there is always lithium. We just didn&rsquo t know that our lithium was of such high head-grade,&rdquo says Tjandra.

&ldquo In addition, our minerals happened to be much easier to separate and extract than any other mine in Australia. That&rsquo s why LithCo came in so fast and how we are already at the final stages of our feasibility study so soon after discovery.&rdquo

Once production commences by year-end, Tjandra expects to mine and sell about 20,000 tonnes of lithium a year through offtake partnerships with Mitsubishi and other manufacturers.

So should investors jump in?

Read more about AMA&rsquo s progress as well as the risks involved in mining companies in this week&rsquo s edition of The Edge Singapore (Issue 768, week of Mar 5), available at major bookstores, 7-11 stores, and selected petrol stations.