The development would see the production of 20,000 tonnes per annum of lithium carbonate equivalent battery grade lithium hydroxide and carbonate, a venture estimated to have a net present value (pre-tax) of $481 million (using a 12% discount), and an internal rate of return of 51%.

The pilot plant test program using run-of-mine spodumene concentrates from the Mt Marion spodumene mine owned by 13.8% by Neometals and 43.1% by MinRes –  with the 43.1% balance held by Chinese company Ganfeng – is a required step given the proposed 20,000tpa hydroxide development would entail a new operating process.

The ELi process converts spodumene concentrate into a high purity lithium chloride solution, then uses electrolysis to produce high purity lithium hydroxide and lithium carbonate.

MNN was unable to ascertain the cost of the pilot program.

Mining at the Mt Marion project south of Kalgoorlie began earlier this year, with annual exports of 200,000t of concentrate planned.

The value-add lithium hydroxide venture is likely to be developed in Malaysia given its good logistical access to spodumene concentrate exports from Australia and proximity to the main base of global lithium battery cathode production.

Neometals shares have been slightly down this week, with a recent stock price of A41.5c capitalising the company at about $232 million.

Just on 12 months ago the stock was trading at less than 10c.