Company Overview - Altura Mining Limited is an Australia-based company engaged in the supply of lithium raw materials. The Company is engaged in the exploration and development activities, including completion of a feasibility study at its Pilgangoora Lithium project in the Pilbara region of Western Australia. The Company's segments include coal mining, exploration services and mineral exploration. Its coal mining segment is engaged in the sale of coal. Its exploration services segment provides a range of drilling services to its customers, primarily mining and exploration companies. Its mineral exploration segment is engaged in exploration activities. The Company also has interests in producing Delta Coal project in Indonesia, which produces medium energy thermal coal, and the Tabalong Coal project, a thermal coal deposit located in South Kalimantan, Indonesia. The Tabalong Coal project consists of approximately five mining licenses.

 

AJM Details
Approval from the Department of Mines and Petroleum (DMP) and commencement of bulk earthworks: The Western Australian Department of Mines and Petroleum (DMP) had recently approved the Project Management Plan for Altura Mining Ltd (ASX: AJM) 100% owned Pilgangoora Lithium Project. This additional approval after getting the Mining Proposal approval has been a major milestone for the group, and constitutes formal approval from the DMP’s State Mining Engineer to start mining operations. The commencement of on-site works brings AJM closer to unlocking significant strong cash flows in early 2018 via sales of spodumene concentrate. Moreover, with all the regulatory approvals in place, AJM intended to immediately start mobilization of its own personnel to site as well as those of NRW, its appointed Mining Contractor. Other activities as planned included mobilization of NRW earthmoving equipment to site, installation of bore infrastructure, mobilization of initial site offices and site set out and survey. Further, the clearing and removal of topsoil stockpile, commencement of bulk earthworks on site and completion of base pad for process plant were the priorities. As a progress, the group on March 14, 2017 announced for the commencement of the bulk earthworks for mine infrastructure by NRW.
 

Events (Source: Company Reports)
 
Five-year contract for NRW Holdings Limited: Altura Mining had awarded the contract to provide mine development and mining services for a five-year period to NRW Holdings Limited. NRW was expected to utilize the current equipment available after the completion of another project and to be mobilized for a rapid start-up to meet with AJM’s requirements. Mobilization was said to start in March 2017. Up to 60 NRW personnel are supposed to be employed on site, and NRW would work with the local Njamal indigenous communities to offer employment and subcontract participation.
 

Bulk Earthworks Commencement (Source: Company Reports)
 
Other earlier updates on Pilgangoora Project: AJM had recommissioned its 325-person construction and operations camp in early February and after receiving the approval to mine from the DMP, the group would be well positioned to deliver the project for commissioning by Q4 2017. The site team has been continuing the mobilization process while key infrastructure was being procured and installed to allow site works to commence. Furthermore, AJM finished a series of presentations to financial groups in North America, Canada and the United Kingdom. The comprehensive program has provided a greater insight and knowledge of AJM and its Pilgangoora project to potential funding institutions and paved the way for prospective key investments in the company. The key focus of AJM is delivery of the project as per the previously advised timeframe and in the short term includes finishing the remaining offtake arrangements with Chinese customers to allow spodumene production from Pilgangoora to be fully committed prior to first shipment in early 2018. Additionally, AJM made a major progress on the detailed design of the process plant. AJM has signed the contract with Roy Hill Infrastructure to purchase the former Rail Camp 2, located 20km from the Pilgangoora mine site. The order is placed for fifteen long lead mechanical equipment items for the process plant. AJM has signed native title agreement with the Kariyarra People, the traditional owners of the land on which Rail Camp 2 is situated. Moreover, AJM has completed all resource extension drilling on existing Mining Leases. AJM has also signed the strategic agreement with Kairos Minerals that would enable them the right to explore further prospective Lithium tenements in the Pilgangoora area. Additionally, the tenders for key service areas including mining, transport and logistics and construction of the process plant are in the final stages of assessment.
 
Subscription and Cooperation Agreement with Shaanxi J&R Optimum Energy Co.: AJM had signed a Subscription and Cooperation Agreement with Shaanxi J&R Optimum Energy Co. Ltd (J&R Optimum) for raising approximately $41.6 million before costs through a Share Placement. J&R Optimum is currently one of China’s leading lithium battery producers focused on lithium iron phosphate (LiFePO₄) power battery systems for commercial and domestic applications, which is now having the strategic alliance with AJM. After the completion of the Share Placement, J&R Optimum would have a 19.9% shareholding in AJM. As per the agreement after the completion of the Share Placement, J&R Optimum would have a right to participate in any new issues of shares in AJM on the same terms and conditions as other participants in that share issue up to such additional number of equity securities sufficient to maintain their ownership percentage in AJM. However, these anti-dilution rights have been said to be subject to the maintenance of an interest of not less than 15% of AJM, and would be granted after fulfilling all the required regulatory and other approvals.
 
Enhanced Ore Reserve and Resources Estimate: Altura Mining had announced for a revised Ore Reserve estimate of 30.1 Mt @1.04% Li₂O and the latest estimate represented an increase of 9.8 million tonnes on the previous estimate (as per financial half?year ended 31 December 2016 updates). The increase is due to the additional deep drill hole data and improved confidence in the drilling and sampling data after the completion of a closely spaced infill drilling program from June until October 2016. Meanwhile, AJM’s upgraded indicated Mineral Resource is of 40.3 Mt @1.00% Li₂O, which is an increase on the previous indicated Mineral Resource of 30.6 Mt @1.04% Li₂O. Moreover, the revised Inferred Mineral Resource estimate of 2.3 million tonnes at 0.90% Li₂O is lower than the previously reported 8.6 million tonnes at 0.95% Li₂O due to the improved confidence in the data after the recent infill drilling program.
 

Altura Pilgangoora Ore Reserve Estimate (Source: Company Reports)
 
Agreement with Roy Hill Infrastructure Pty Ltd: Altura Mining had signed an agreement with Roy Hill Infrastructure Pty Ltd for buying a 324-room camp, which is former Rail Camp 2 and is located just 20 km from the Pilgangoora mine site. AJM in January 2017 has completed all of the necessary approvals to effect the final transfer of ownership of the camp from Roy Hill. Moreover, AJM is currently completing the recommissioning activities to enable occupation by its initial mining and construction workforce in early February 2017. The facility has been renamed “Pilgangoora Village”, which would offer quality accommodation during both the construction and operational phases of the project. Additionally, the village is strategically located on the Western side of the Turner River and therefore would not be cut off from a supply or evacuation point of view during the cyclone season.
 
Updates on the Drilling Program: Altura Mining had also reported further positive results from the resource and reserve extension drilling program in the December quarter. The program had comprised a total of 246 Reverse Circulation (RC) holes, drilled between July and October 2016, in which, 139 were within the main deposit with a particular focus on the eastern and southern mineralization zones. The remaining 107 sterilization holes have covered all the areas of key infrastructure within the granted Mining Leases, including over waste dumps, Tailings Storage Facility (TSF), process plant and other non-process infrastructure.
 
Stock Performance: Altura Mining is further focusing on their core business and has planned to divest its interests in both the Delta and Tabalong coal assets and is pursuing a number of options for sale of the coal assets and information has been provided to a number of parties under confidentiality deed arrangements. Altura Mining Ltd stock would be added to all Ordinance Index from March 20, 2017. The stock has risen 18.52% in the last three months as on March 13, 2017 and we believe there is more potential in the stock. We give a “Buy” recommendation on the stock at the current price of – $ 0.16

 
AJM Daily Chart (Source: Thomson Reuters)

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