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Talison Lithium Announces Final Approval for Stage II Expansion of Greenbushes Lithium Operations

Talison Lithium Limited (TSX:TLH) announces final approvals and details on the Stage 2 expansion of production capacity of the chemical-grade plant at the Greenbushes Lithium Operations.

Highlights

  • The Board has given final approvals for the Expansion and site works to commence in April 2011
  • Expansion will more than double total nameplate production capacity at the Greenbushes Lithium Operations to approximately 740,000 tonnes per annum lithium concentrate (approximately 110,000 tonnes per annum lithium carbonate equivalent ("LCE"))
  • Total capital costs of the Expansion are estimated at between A$65 to A$70 million
  • Commissioning of the Expansion is anticipated to commence in the second quarter of calendar 2012
  • Expansion ensures Talison is well positioned to increase sales and provide the lithium market with security of supply to meet expected future growth
  • Talison expects to release an updated reserve statement incorporating the improved operating economics from the Expansion by June 2011

Expansion of the Greenbushes Lithium Operations

The Stage 1 expansion at the Greenbushes Lithium Operations was completed in December 2010. Following completion of the Stage 1 expansion, total nameplate production capacity at the Greenbushes Lithium Operations has increased to approximately 315,000 tonnes per annum lithium concentrate (approximately 47,000 tonnes per annum LCE).

In December 2010, Talison announced that in response to continued strong demand for lithium concentrate the design of the Expansion was being revised to allow for further increases in production capacity above the original design.

The engineering design work to define the scope and capital cost of the revised Expansion has now been completed. The Expansion comprises a new, purpose built, large scale chemical-grade lithium concentrate production facility. The Expansion is expected to substantially reduce Talison's unit operating costs through improved lithium recovery and economies of scale.

The Expansion will more than double the current total production capacity of the Greenbushes Lithium Operations, with total nameplate production capacity increasing to approximately 740,000 tonnes per annum lithium concentrate (approximately 110,000 tonnes per annum LCE).

Total capital costs of the Expansion are estimated at between A$65 to A$70 million and will be funded by current cash reserves which include the net proceeds of the recently completed equity financing. Key long lead time items for the Expansion, including ball mills have been ordered, and tenders for the majority of the necessary equipment have been issued.

Talison is in final negotiations with the preferred construction contractor and expects to enter into the construction contract for the Expansion and commence site works at the Greenbushes Lithium Operations during April 2011. Commissioning of the Expansion is anticipated to commence in the second quarter of calendar 2012.

Discussions with new and existing customers for sales contracts for the increased production from the Expansion are continuing. Global demand for lithium is expected to accelerate significantly in coming years driven by demand for lithium-ion batteries for use in mobile technology, energy grid stabilisation and electric vehicles, and the Expansion will enable Talison to provide its customers with the security of supply and confidence to continue to expand their own operations.

Peter Oliver, Chief Executive Officer said, "Talison has a history of increasing production capacity in response to world demand for lithium, and has previously completed several successful expansions. This Expansion is in-line with Talison's strategy to leverage off the strengths of its large, high-grade lithium deposit at the Greenbushes Lithium Operations and its technical expertise in the production of lithium concentrate."

"After completion of the Expansion, Talison's production capacity will be broadly equivalent to the size of the total global lithium market in 2010. An expansion of this scale demonstrates Talison's confidence in the outlook for the lithium market, and enables Talison to provide its customers with security of supply to meet the expected future growth in demand for lithium-ion batteries in the years ahead."

Greenbushes Lithium Operations Reserve Statement

Talison has been undertaking in-fill drilling at the Greenbushes Lithium Operations, with the initial objectives of upgrading the lithium mineral resources and improving the conversion of lithium mineral resources to lithium mineral reserves. The in-fill drilling has now been completed and Talison expects to release an updated statement of lithium mineral reserves and mineral resources by June 2011. The updated statement of lithium mineral reserves and mineral resources will incorporate results from the in-fill drilling and the improved operating economics from the Expansion.

Source: Talison Lithium Limited

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