Alset Energy Corp. (TSXV:ION) is a Canadian exploration Junior on the verge of developing an exciting new supply of lithium and potassium bearing brine in Mexico. Right now, the lithium world generally recognizes only three lithium brine districts worldwide: the lithium triangle in South America, Clayton Valley, Nevada in the USA, and Tibet. Alset expects their central Mexican Plateau deposit will form an exciting fourth district to supply this vital metal.
The Investing News Network recently spoke with Alset Energy President and CEO Tim Oliver.
Investing News Network: All eyes in the lithium investment space have been on Nevada’s Clayton Valley in recent years. Can you tell us more about the history of lithium in Mexico and why you believe its destined to be the next world-class lithium district?
Tim Oliver: Mexico has no lithium production history. The lithium/potassium bearing salars within our concessions have long produced common table salt. Historically, and by history, I mean the 16th century these “salt pans” were the source of common table salt. Back then they used the salt in the silver amalgamation process. Little did they know, or care for that matter, that the brine contained the elements lithium and potassium that would someday rival silver in value.
Back in the late 1980s and early 1990s, Mexico’s government mineral authorities did some initial sampling and testing for lithium. The well and spring sampling results were intriguing. Two wells contained 260 and 300 mg/l (milligrams per liter), which is quite high for a culinary water well. We suspect the wells produced fresh water when they were drilled, but over time drew in brine from a nearby salar. Unfortunately, we have no location information and therefore can’t confirm that theory.
Of greater interest is a study from 1992 that revealed extraordinarily high lithium values in the Caliguey lagoon surface water. At the time, Caliguey hosted a salt production operation. The operators pumped brine from a well set 20-m beneath the surface. The pumped brine discharged to a series of evaporation ponds from which the salt was harvested. Ordinarily, once the salt crystals form in a production evaporation pond, the remaining concentrated brine is decanted from the pond to allow harvest of the salt crystals. In this case it makes sense that the discharged fluids were directed to the surface water in the lagoon. A drawing of the system shows an earthen berm separating the lagoon from the salt works.
What’s amazing is the lithium concentration in the lagoon. The Mexican government scientists analyzed four samples of the lagoon water. The results showed lithium concentrations ranging from 12,000 mg/l to 21,000 mg/l. For perspective, Albermarle’s Silver Peak operation in Nevada’s Clayton Valley concentrates lithium to about 7,000 mg/l by evaporation before feeding it to the lithium chemical production operation. So, without trying, the salt plant produced a solution three times stronger than required for lithium chemical production. Unfortunately, the scientists did not analyze for potassium. The Caliguey study results convinced me of the terrific potential these brines have for lithium and potash production.
INN: From a technology and logistics perspective, how does Alset Energy plan to extract the lithium from the brine?
TO: The only proven method of concentrating naturally occurring lithium brine to a level suitable for chemical production is solar evaporation. No other method exists on a commercial scale. Alset would build large evaporation ponds to replicate, in a controlled and deliberate fashion, that which has happened inadvertently in the Caliguey lagoon. When the evaporation process produces solutions having the desired strength, the lithium, and potassium will be separated in a chemical plant to produce either lithium carbonate or lithium hydroxide and muriate of potash or potassium sulfate, depending on market conditions and operating cost factors.
INN: Apparently, the deposit is also very rich in potash, adding further potential upside for Alset Energy. Can you explain to our audience the importance of a potash asset in a country like Mexico?
TO: Mexico imports 100% of all potash fertilizer. In 2012, the dollar value was $177 million. Potassium, the key nutrient in potash, has no substitute and, like nitrogen and phosphorous, is absolutely essential to agricultural production. Clearly, a domestic potash supply would be a great advantage for Mexico.
INN: What’s the permitting process like in Mexico?
TO: Mexico has a sophisticated system for environmental permitting. The country is also a great place to do business. I’ve been permitting mining projects in Mexico for nearly fifteen years. The programs are rigorous, but reasonable. One outstanding feature is the lack of anti-mining bias within the agencies. They are all business.
Your readers might be curious why the drilling permitting is taking longer than some think it ought to. The reason is the special status of the land within the salar. Mexican law considers the salars to be “zona federal” meaning the area falls under federal jurisdiction rather than state, municipal or ejido jurisdiction. Any disturbance in the “zona federal” must undergo the full environmental permitting process including preparation of the detailed “manifesto impacto ambiental” or “MIA.”
MIA baseline studies, impact analysis and mitigation planning takes time. This is not an unreasonable requirement; it is the law. We expect to submit the permit documents in November. While we hope for a quick turnaround, the review takes time and we have the holidays to deal with.
INN: Can you tell us more about the great team you’ve assembled and the value they bring to Alset Energy shareholders?
TO: You bet. I’ll start with our technical team. The first person I brought on was David Hawkins. David is my go-to hydrogeologist anywhere, but particularly in Mexico. We’ve worked and traveled around together in Mexico for at least 10 years. David is fluent in Spanish.
I’d like to digress here for a moment while talking about David’s experience and how it dovetails with my own. I spent the first two-thirds of my career as a mining environmental engineer including 18 years in a production setting. Mineral processing includes all manner of water treatment. Whether you’re extracting base or precious metals from leach solutions, or cleaning up wastewater, it’s all inorganic chemical process engineering.
Meanwhile, David was busy remediating ground water contamination by pumping contaminated water to the surface and treating for contaminant removal.
These are precisely the skills and science needed to pump brines and separate the lithium and potassium. So, between us, David and I have two careers worth of expertise ready to apply to brine production and chemical separation.
Next, the company engaged Delia Patricia Aguayo Hurtado of Consultoría Ambiental in Hermosillo, Sonora, Mexico, to lead the environmental and social responsibility aspects of the project development. Sra. Aguayo is a highly respected environmental consultant with over 20 years of experience assisting mining companies with environmental permitting and social responsibility programs in Mexico. Sra. Aguayo and I shared permitting tasks on several Mexican mining projects and have been close colleagues for years. Patricia began consulting in 2000 and has collected an impressive record of success on over 60 projects, mostly mining, throughout Northern and Central Mexico. Sra. Aguayo holds a BS in Chemical Engineering from the University of Sonora, Mexico and a Master of Science from the University of Texas, Dallas.
We also brought in David Morales for the environmental and permitting effort. Sr. Morales will focus on the biological surveys and advise on local environmental issues. David is a licensed biologist and attended the Autonomous University of Zacatecas. He has been actively practicing environmental biology in the region since 2013.
Eugenio Iasillo is a consultant in metallurgy and process design. Eugenio will help work out a sampling and test plan for the first round of drilling, and will assist with process simulation and flow sheet development when test results are in hand. Eugenio has 38 years of experience in the mining industry with 21 years in engineering and metallurgical research geared toward project development. He holds a B.S. in Chemical Engineering from the University of Michoacán, is a registered professional engineer in Arizona USA and holds a professional registration in Chemical Engineering in Mexico. Eugenio and I have worked together on a number of successful mining ventures over the years.
José de Jesús Parga has also been active with the project, helping enormously with Alset’s due diligence work and continued evaluation of the properties. Sr. Parga is a renowned Mexican Geologist (National Award in Geology 2005, by AIMMGM ), having served as geologist after 9 years in lithium exploration projects in central Mexico, while attending to relations with the government institutions and the rural communities.
On the business front we have Hector de Los Santos, an international trade professional with over 20 years of experience in business development and government relations in Mexico, Canada, the US and Latin America. He served as Deputy Trade Commissioner for the Mexican Government in Vancouver and is currently the Managing Director of LATAM Ventures Corp. Mr. de los Santos has led the development and implementation of corporate affairs and management programs, including lobbying, mining, regulatory issues, fiscal, community relations and government relations for junior companies. Hector has been engaged by the Company to provide expertise as a business, cultural, regulatory and strategic planning advisor. Hector lives in Vancouver, BC Canada.
Dan Boase of First Canadian Capital is our key Investor Relations representative working out of Toronto. Dan’s services include initiating and maintaining contact with the financial community and the Company’s shareholders, investors and other stakeholders, for the purpose of increasing awareness of the company and its activities. Mr. Boase has been providing investor relations and consulting services to Canadian public companies for 18 years.
Finally, my friend and colleague Ralph Rushton helps us with Investor Relations matters in Vancouver on a consulting basis, when he’s available.
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