Mining in Canada: Lithium Exploration Companies

Mining in Canada: Canadian Lithium Project Developers

Mining in Canada is currently focused on the development of hard rock lithium deposits in order to supply materials to the growing demand for lithium-ion batteries in electric vehicles (EV). The lithium story is garnering global market interest on the demand side since high end and elegant EV’s by major car makers and Elon Musk’s, Tesla, Inc hit the market. Tesla and its battery, Gigafactory, are the mainstream news items attracting investors to lithium and other “energy metal” markets. We are at the beginning of another metals supercycle and this time it’s for all things associated with eletrictrifiation of the transportation market.  But the biggest driver of the market on the demand side is China. China is focused on the reduction of air pollution in major urban centres with high internal combustion engine usage by increasing the use of EVs in these areas. This is happening now with rapid uptake.

Nemaska Lithium is the operator of the Whabouchi lithium mine located in northern Quebec and a lithium chemical plant in Shawinigan, Quebec. The project is at the pre-commercial production stage and requires additional funding to take it to full production. The Whabouchi projects host a 27.3Mt proven and probable reserve at 1.53% Li2O for an initial 26 years of mine life. The concentrator plant is designed to a capacity 750t/day of 6% Li2O spodumene concentrate. The concentrate is trucked approximately 300 km to Chibougamau and a further 550 km to the chemical plant in Shawinigan. A 2016 feasibility study on the project determined an after-tax NPV of C$1.16 Billion and IRR of 30.3% on a capex of $550 million. The company currently trades with a market cap of ~C$820 million.  The project was started in 2009, with the first resource reported in 2010 of over 25Mt combined. The project starts as an open pit mine with underground potential after 20 years. The commercial mine concentrator is expected to be commissioned in H2 of 2018 when funding is in place. The mine is to run at 1.1Mt/yr of ore processing into 213,000t of 6% Li2O spodumene concentrate.

Currently, the company is operating a Phase 1 plant that recently produced 1.5t of battery grade lithium hydroxide for testing, which was sold to a Quebec based cathode manufacturer. The Phase 1 plant capacity is 610t/year. The full commercial plant is expected to produce 28,000t LCE annually, in both lithium carbonate, 3.26kt/ yr and lithium hydroxide, 27.6 kt/yr. The commercial plant is expected to be running in H2 of 2019. The next steps for Nemaska are to optimize plant operations and secure project funding for the commercial plants. Nemaska currently provides off-take agreements to Johnson Matthey Battery Materials and FMC Corp. for up to 50% of production from the project.

Critical Elements is another Quebec based lithium development company with an asset located in the same region as Nemaska. CRE’s Rose Lithium-Tantalum project recently reached the bankable feasibility stage with reported NPV of $746 million and an IRR of 34.9%. With funding in place, the report indicates the project would be operating in 21 months as a producer of lithium and tantalum concentrates. Annual production is estimated at 186,327 tpa of chemical grade lithium concentrate; 50,205 tpa of technical grade lithium concentrate; and 429 tpa of tantalum concentrate over the 17-year mine life. The initial capital for construction is estimated at $341.2 million.  The project hosts a LCT pegmatite deposit containing reserves of 26.8Mt grading 0.85% Li20 and 133ppm Ta2O5. Currently, the project does not include plans for a chemical plant, this potential still remains for the project as it advances. The company’s strategic partner on the project is Helm AG and helped to fund the bankable feasibility study.

CRE is working on detailed engineering for the mine and concentrator. The project awaits permitting construction and operating permits for building. The company is seeking to fund the project at this time. CRE also holds a large group of properties in the Whabouchi/Rose project area that were originally held by Nemaska. However, the properties came to CRE through a series of transactions. Several of these projects are under option to other explorers and developers and are known to host lithium bearing pegmatites.

North American Lithium [NAL] is advancing a Quebec lithium project located approximately 60 km north of the mining centre of Val d’Or. This project was the site of two past productions. Initially, from 1955 to 1965, 1Mt of spodumene was mined from underground. 3,800t of LiCO3 was sold to the US Atomic Agency. The project sat dormant until the next resurgence in the lithium market. A new resource for an open pit mine plan was produced in 2010 for the previous owner. The project moved quickly to production in an attempt to capture the potential growth of the new lithium battery and EV markets. In 2011, a feasibility study was released on a 15-year project with a NPV8 of $190M and IRR of 22% with an initial Capex of $202M based on a reserve of 17.1Mt grading 0.94% Li20. In that same year, construction began on the mine, mill and chemical plant. By the third quarter of 2014, 108 tonnes of battery grade LiCO3 was produced and shipped. However. the company was underfunded, ran out of working capital, and was placed in CCAA protection in Oct 2014.

North American Lithium

A new investor group in partnership with Investment Quebec acquired the project out of CCAA and holds the project’s debt. To date, over $400 million has been invested in the project and the permits to operate are in place. Recently, the company successfully sold some of their spodumene concentrates. The project went under two years of new design and process review work, but it still requires additional capital to resume commercial production, still needing to raise $200 million. However, this financing is underway with a recent private placement announced for $50 million at $2.75 a share, and An IPO is expected from the company in the near term.

Far Resources is exploring the Zoro pegmatite swarm in northern Manitoba near the mining town of Snow Lake. The Zoro project is another pegmatite that was worked in the 1950’s with a non compliant historic resource of 1.8Mt of grading 1.4 % Li2O defined at that time on the mine’s principal dyke, Dyke 1. The company originally optioned 52ha of ground covering just this dyke. Since that time, the Company has completed three rounds of drilling and prospecting to confirm the grades and potential of the Zoro pegmatite swarm. The land package was increased initially by another 3.0km2 to cover the related dyke swarm to the NE of Zoro. An additional 2200ha to the west has been added to secure the potential of the immediately adjoining lands. Most recently, the company entered into an MOU with Quantum Resources, now named Nova Minerals, and Australian listed junior that optioned the contiguous ground to the west, which hosts the historic resource of the Thompson Brothers dyke. The MOU calls for cooperation on exploration information and the potential for regional resource development. The agreement adds another non compliant historic resource of 4.305Mt at 1.3% Li2O to the potential development scenario of this regional mining play.

Far Resources Land Package and lithium bearing dykes

Recent drilling results on Dyke 1 returned 20.6m of pegmatite grading 1.43% Li2O, along with additional hits that confirmed and extended the known lithium mineralization in Dyke 1. To the northeast in the associated dyke swarm, dykes 2-7, sampling programs also confirmed the grade of the historic sampling, with rock chip samples grading up to 6.35% Li2O. Starting in 2016, the company conducted three drilling campaigns on the project in order to confirm the historic resource and begin upgrading it to a complaint resource, which is expected to happen in 2018. A program of prospecting and soil sampling on the claim group identified a new dyke,  looking to confirm the extension of the dykes under soil-covered areas. These potential dyke extensions will be confirmed in the next work program through trenching and drilling. The company’s program is focused on expanding the known mineralization and control development land in the region.

The company also holds gold projects in New Mexico that are to be spun out into a separate company in early 2018, creating Far as a pure lithium development story.

Jourdan is working the Vallee property that lies adjacent to the NAL project and is contiguous on the east side. The company controls more than 9500 ha in the Lacorne district near Val d’Or. The Vallee project was drilled in 2011, with 21 holes totalling over 4.250m returning up to 1.19% Li2O over 5.5m on what may be an extension of the NAL ore body. The pegmatite dyke swarm that hosts the NAL deposit appears to continue east onto Jourdan’s property. It appears to be intersected by several holes in the 2011 drilling program, including a high grade intersection of 2.68% Li2O over 0.85m. The company identified a 600m wide and 1000m long mineralized corridor that they are now mapping and sampling. The company completed preliminary metallurgical tests from the 2011 core and produced a concentrate grading 5% Li2O. The project was also drilled in 1952, 1953, and 1955 prior to the production start at the adjacent historic underground mine. These holes also reported grades and intersections including 16 feet at 2.97 Li2O. The company hopes to outline an initial resource, in the range of 2Mt at 1% Li2O, on this project in the near term.

Quantum Minerals is another Canadian junior exploring and expanding a historic lithium resource in Manitoba. Their Cat Lake lithium project is located in southeast Manitoba and hosts several Lithium-Tantalum-Cesium pegmatites. One of these is the former Irgon Mine that holds the historic non-compliant resource of 1.2M tonnes of spodumene-bearing pegmatite grading 1.5% Li2O. The company holds four claims covering 700 ha on the property located 150 km northeast of Winnipeg. The Irgon mine pegmatite averages 7m wide and is outlined currently to 442m long, the historic resource covered 365m of this to a depth of 213m. There are older metallurgical tests from this project that shows the potential to recover 87% of the lithium in spodumene to a concentrate grading 5.9% Li2O. The old Irgon mine includes a capped shaft and underground workings that are currently not accessible.

The company is currently conducting surface work on the project, including clearing of the dyke surface for mapping, and channel sampling to confirm the historic work consisting of grades as high as 7.44% Li2O from the dyke.

International Lithium holds a group of lithium assets in three countries, Argentina, Canada and Ireland. The project in Argentina is a lithium brine; the assets in Canada and Ireland are lithium bearing spodumene pegmatite dykes. The company’s strategy is to build an international lithium royalty portfolio. The projects in Canada are located in northwestern Ontario and include three pegmatites areas currently being explored. The projects include the Mavis/Fairservice project near Dryden; the Forgan lithium project located south of Lake Nipigon; and the Raleigh project near Ignace. Pegmatites are identified and sampled at each project. The Mavis project is the most advanced of the Canadian projects. It was drilled earlier in 2017 with results including 1.7% Li2O over 26.3m. The purpose of this round of drilling is to test the resource potential of Pegmatite 6 that is now tested for 60m of strike and 145m of depth, as well as following up on the work conducted in 2011/12. The Raleigh project was drilled in 1999 and results include 9m at 2.80% Li2O. The Forgan project has only seen surface channel samples with results of 4.23% Li2O over 7.25m reported.

Core From Mavis Project

The Mavis project is optioned to Pioneer Resources Limited, who plans on doing another round of drilling at the Mavis to expand the known extend of the Pegmatite 6 target. International Lithium is focusing its efforts on the Mariana lithium brine project in Argentina.

Frontier Lithium is one of the original lithium players in the Canadian market with their PAC lithium tantalum project in northwestern Ontario. Their spodumene bearing pegmatite is some 500m long and 14 to 125m wide. The resource is defined with 7.89Mt of 1.73 Li2O eq. and 0.3Mt at 1.35% Li2O eq. The company continues expanding the deposit, currently drilling on the eastern extension, which has returned an intercept of 2.47% Li2O over 119m.

The project is at the pre-feasibility stage in order to determine the economics of development. The company completed testing on samples from the deposit, which produced a spodumene concentrate with a grade of 7.13% Li2O from representative bulk sample with a recovery of 79.4%. The pre-feasibility study will look at a Phase 1 plan to produce technical grade concentrates for the ceramics and glass market. The potential for production of concentrates and chemicals to the lithium battery market would follow in a Phase 2 study.

Separation Rapids Project Location Map

Avalon is also one of the early entry groups in the lithium pegmatite market. The original market driver was the demand outlook for rare earth elements and rare metals. As a result, their main lithium project is the Separation Rapids Lithium-Tantalum-Cesium-Rubidium pegmatite. The project is located in northwestern Ontario near Kenora.

The Separation Rapids project is advanced, with a PEA completed in 2016. The pre-tax valuation numbers included a NPV8 of $343 million with an IRR of 19% on a project capex of $514 million. This is based on the resource of 8.0Mt averaging 1.29% Li2O in the M&I and 1.63Mt at 1.42% in the inferred category. The deposit remains open at depth and along strike. The company is working on optimizing recoveries for a Phase 1 production facility. Avalon’s pegmatite is somewhat unique in that the principal lithium bearing mineral is petalite with appreciable lepidolite content. Avalon also holds a group of other projects targeted at specialty metals and elements.

Rock Tech holds land in the Georgia Lake area of northwestern Ontario, near the mining town of Beardmore. The project hosts a 43-101 compliant resource of 3.19Mt at 1.1% Li2O indicated and 6.31Mt at 1.0 Li2O inferred. The company completed metallurgical test work on the resource that allowed for the concentration of high-grade spodumene from high and low grade mineralized material, showing a recovery rate of 75.5% when utilizing heavy liquid separation; and recovery rate of 81.1% when utilizing floatation. This material was then used for hydrometallurgical tests showing the production of Li2CO3 with a purity of 99.96%, without any process optimization, and the production of Li2CO3 with a purity of 99.98% with bicarbonate scrubbing.

The company continues exploring the property,  recently announcing the discovery of additional pegmatites in the area around the resource. The latest, the Nama Creek discovery, produced grab sample assays up to 2.12% Li2O. Ground work continues on the project at this time.

Ultra’s portfolio of lithium projects includes both brine and pegmatite properties. The pegmatite properties are in northwestern Ontario to the south of Beardmore. The Georgia Lake project contains eight known pegmatite occurrences that were initially mapped in the 1950s. The project area saw historic work and sampling in 1956, 1980s and 1990s with sample grades ranging up to 1.25 to 1.5% Li2O. The company drilled several of the pegmatites in 2017, intersecting its best result on the Lucky Lake occurrence with a result of 1.42% Li2O over 5m. The 2416ha property is held 100% by Ultra. The company’s brine projects are located in Argentina and Nevada.

Clean Commodities Corp holds a basket of projects in Canada covering the clean energy commodities including lithium, cobalt and uranium. On the lithium side they hold ground partially surrounding Critical Elements Rose project; the Juliet project hosts lithium bearing boulders grading upto 1.65% Li2O. The company is looking to locate the bedrock source for these higher grade samples within this fertile region for pegmatites using ground magnetics, trenching and rock sampling in 2018.

CLE’s lithium projects also includes the Phoenix in NWT that holds two known pegmatites. The Big Bird pegmatite has been mapped over a 1,280m strike length with observable outcrop widths ranging from 8m to greater than 80m. Past drilling at the Big Bird pegmatite returned 1.24% Li2O over 34.3m. The Curlew pegmatite has been mapped over a strike length of 400m with widths up to 20m. Past drilling at the Curlew pegmatite returned 1.72% Li2O over 14.87m. In Nunavut, their Torp Lake Lithium Project hosts the drill-ready McAvoy lithium-rich pegmatite.

Past channel sampling work on this spodumene bearing pegmatite has returned 6.0 m grading 4.5% Li2O and 7.0 m grading 3.3% Li2O. The company plans work on these projects next summer.  The company currently trades at a market cap of $11.04 million.

Cameo Resources recently optioned the Whabouchi project from Clean Commodities Corp. They can earn 80% over four years with $5 million in exploration expenditures. This project is expected to be the focus for the company and its qualified property. The Whabouchi project is a large-scale lithium exploration project covering two land packages, the Dumont block approximately 14,548 ha and the Spodumene Lake block covering approximately 4,848 ha.The lands are situated in a known lithium pegmatite district that is located near Nemaska Lithium Inc. The Spodumene Lake block is about 560m west of the Nemaska project ground. There are already 29 mapped pegmatites located across the two blocks. First stage field work exploration programs were completed in late-summer 2016, with assays reaching 344 ppm Li2O. The company trades at a market cap of $5 million.

Cameo Spodumene Lake Dumont Project Earn In Map

Frontline Gold recently acquired land prospective for lithium-bearing pegmatites in northwestern Ontario, located in the same belt of rocks that hosts the former Tanco Mine and Avalons’ Separation Rapids project.  Their Jubilee Lake project is known to host several pegmatite dykes that have been mapped and sampled. These dykes are adjacent to the Allison Lake Batholith, the largest fertile for rare metals, elements and pegmatite granite in northwestern Ontario. The region is known to host pegmatites containing lithium, cesium, tantalum and rubidium. Work completed by other companies indicates that the Jubilee lake area, of the pegmatite body, hosts the highest concentration of rare elements in the batholith. The company is the midst of completing a prospecting and mapping program to confirm the lithium and rare element values of the prospects in order to advance the project.  They currently trade at a market cap of $2.81 million.

Australian Listed Companies in Canada

Galaxy Resources is an operating company with their mine at Mt. Callin in Western Australia. The mine exploits a spodumene bearing pegmatite with resources of 16Mt at 1.08% Li2O. Production rates are at 1 Mtpa producing 137,000 tpa of concentrate and 56,000 pounds per year of tantalum. Galaxy also holds the Sal de Vida lithium brine project in Argentina. The project has a positive definitive feasibility study, completed in 2013, estimating a NPV10 of US$645 million and a 40-year life.

In Canada, the company holds the James Bay pegmatite project in northern Quebec, along the James Bay highway. The project hosts a total resource of 22.22Mt of lithium-bearing spodumene pegmatite grading 1.28% Li2O. In 2017, the company spent US $3.3 million on an exploration and development program for their project in order to extend resources and define reserves and new targets with 33,000m of drilling. The project feasibility study is underway and is expected to be completed in Q1/18. The study will look at a downstream chemical conversion plant in Quebec. Metallurgical work in 2012 showed the resource can produce a concentrate of 6.53% Li2O with a 75% recovery.

James Bay Project Spodumene Pegmatite Outcrop

Lepidico is active on several fronts in the lithium development space, including advancing an optioned project in northern Quebec. The company optioned up to 75% of the Lamare project from Critical Elements, located in the same region as their Rose and the NMX Whabouchi projects. The spodumene pegmatite on the Lamare was discovered in 2012 with channel sampling returning up to 12 at 1.96% Li2O. This past summer the company completed Stage 2 drilling, returning 33.7m at 0.94% Li2O, which followed up the results from stage 1 drilling of up to 28.5m at 2.15% Li2O. The dyke is defined for over 850m in length in two sections. The company holds other pegmatite projects and options in Australia and Portugal. Also in Canada, the company is working with Avalon Advanced Materials on their Separation Rapids project in the application of Lepidico’s extraction technology on the deposits lithium bearing micas. Galaxy Resources is a strategic investor in Lepidico with a 17% equity position at this time. The current market cap of the company is A$145.73 million.

Sayona Mining is operating in Quebec near the NAL Quebec lithium project on their own advanced lithium bearing spodumene project. The Authier project is near a production decision with a PFS completed in 2012 with initial offtake discussions. The positive report gave the project a NPV of A$140 million and a IRR of 39% with a capex of A$66 million. This project hosts reserves of 10.2Mt at 1.02% Li2O based on 18,000m of drilling in 139 holes and the results of the economic study. The project is estimated to produce 99,000tpa of spodumene concentrate at 5.75% Li2O over a 13 year life. The company recently signed an MOU for offtake with a subsidiary company of China’s MInmetals for up to 100,000 tpa of spodumene concentrate.

The next steps on this project includes additional drilling and sampling to support metallurgical work and inputs to the feasibility study for development.  The company holds additional lithium and graphite projects in Australia. The current market capital of the company is A$64.6 million.

Location of the Authier Project In Quebec

Argonaut is exploring the Crescent Lake project in northwestern Ontario, to the north of Lake Nipigon. The pegmatites were drilled in the past, in the 1950s and in 2011, with grades of 1% to 1.48% Li2O. The project is divided into two optioned properties, Falcon Lake and Zig Zag, with additional 100% held land in between. The project is expected to have another round of drilling this winter.  The company holds another pegmatite project, located 150 km to the north of designated Greenbush lake. The pegmatite was sampled and returned 2.46% Li2O.

Ardiden is an Australian junior exploration company with a group of projects in northwestern Ontario. They are mostly focused on elements for the EV boom lithium, graphite, nickel and cobalt along with gold and copper, which will be needed for this new energy metals industry. The company just completed another round of drilling at the north Aubry prospect on the Seymore Lake project, north of Lake Nipigon, located within the same mineralized pegmatite region as Argonaut Resources. The Seymore Lake project contains over 4,000m of historic drilling, from 2002 to 2009. With this information, the company can feel confident about advancing a deposit target in the range of 3-5Mt at 1.2 to 1.6% Li2O plus significant beryllium and tantalum grades..

The company’s other lithium projects include: Wisa Lake, Root Lake and Rood Bay. The company is already attracting the attention of Chinese lithium players with a strategic partner, Yantai Jinyuan Mining Machinery Co. Ltd, on board for potential funding.

Adiden’s Projects in Canada

Nova Minerals Ltd. [NVA:ASX]

Nova is advancing the Thompson Brothers pegmatite dyke project in northern Manitoba near the mining town of Snow Lake. The Thompson Brothers pegmatite hosts a historic total resources of 4.305Mt at 1.3% Li2O within a known strike length of over 800m. The project is optioned from Ashburton Ventures. The company can obtain up to 95%. Earlier this year, drilling confirmed the grade and thickness of the dyke, with a result of 11.6m grading 1.37% Li2O. The company entered into a MOU with Canadian explorer, FAR Resources, who holds land adjacent to Nova, as well as the expansion of what appears to be a pegmatite dyke complex.

Pioneer optioned two projects in northwestern Ontario from International Lithium. The company holds a right to earn 80% in the Mavis and Raleigh projects. The Mavis project is the most advanced, seeing three rounds of historical drilling with 2011/12 results of high grade mineralization like 6m at 2.53% Li2O. Pioneer drilled the project this year with results confirming grade and thickness at the Fairservice Pegmatite 6 site with 23.1m at 1.36% Li2O. The company plans to drill again this winter.