Economic Viability of Rutile and Gallium Extraction at Leliyn Still Uncertain

Context and Strategic Importance

Kingsland Minerals Ltd (ASX, KNG) has taken a significant step forward at its Leliyn Graphite Project in the Northern Territory by commencing metallurgical test work focused on the potential extraction of rutile and gallium as by-products. This development comes as global markets increasingly seek to diversify supply chains for critical metals, reducing reliance on dominant producers such as China.

The Leliyn deposit, already recognised as one of Australia's most substantial graphite resources, has revealed elevated concentrations of gallium and titanium dioxide (rutile) through extensive drilling and metallurgical sampling. These findings open the door to potentially valuable by-product streams that could materially enhance the economics of graphite production.

Exploration Targets and Metallurgical Testing

Drilling campaigns conducted in 2023 and 2024 have provided a robust dataset, enabling Kingsland to estimate Exploration Targets for both gallium and rutile. Gallium assays have shown consistent grades averaging around 20 to 29 parts per million of Ga₂O₃ over significant intervals, while rutile grades range from 0.3% to 0.5% TiO₂. However, these targets remain conceptual, pending further metallurgical validation and economic assessment.

To this end, Kingsland has engaged the CSIRO to investigate the mineralogical hosts of gallium within the graphitic schist using advanced techniques such as laser ablation inductively coupled plasma mass spectrometry. Concurrently, Independent Metallurgical Operations in Perth are conducting test work to evaluate the feasibility of liberating rutile during graphite concentration processes, including flotation and gravity separation methods.

Market Context and Project Outlook

The timing of this initiative aligns with strong market fundamentals for both gallium and rutile. Gallium commands a price of approximately USD 1,044 per kilogram, while rutile trades near USD 1,635 per tonne, reflecting robust demand driven by their applications in electronics, aerospace, and specialty coatings.

Despite the promising grades and market conditions, Kingsland has prudently excluded rutile and gallium from the current Leliyn graphite concentrate scoping study economics. The company emphasises that any future inclusion of these by-products will depend on the outcome of ongoing test work demonstrating viable extraction and processing routes.

Managing Director Richard Maddocks highlighted the strategic potential, noting that the elevated levels of these critical metals could provide substantial additional revenue streams. He also pointed to the geopolitical impetus for sourcing such materials from stable jurisdictions like Australia.

Next Steps and Investor Considerations

The scoping study for graphite concentrate production is on track for completion this quarter, while metallurgical testing for rutile and gallium continues in parallel. Investors and analysts will be watching closely for results that could justify upgrading Exploration Targets to Mineral Resources and incorporating by-product credits into future economic assessments.

Overall, Kingsland’s approach reflects a measured yet opportunistic strategy to unlock additional value from its flagship project, leveraging advanced mineralogical insights and responding to evolving market dynamics for critical minerals.