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Galan Lithium
Overview
Argentina is no stranger to lithium mining. The South American nation is one of three encompassed in the prolific Lithium Triangle, a region that holds more than half of the world’s lithium deposits. Argentina ranks third in the world in terms of lithium reserves at 2.7 million metric tons (MT), concentrating lithium operations in the provinces of Jujuy, Salta and Catamarca.
Amidst electrification and decarbonization, analysts have forecasted a global supply deficit of 89,000 tons of lithium carbonate equivalent (LCE) in 2023 and the Argentinian government aims to double down on lithium to meet the increasing demand. Argentina has committed to $7 billion worth of investment for lithium production with strong growth projected for exports at $1.1 billion in 2023.
Galan Lithium (ASX:GLN,FSX:9CH) is an Australia-based international mining development company focused on its high-quality lithium brine projects in Argentina – Hombre Muerto West and Candelas. The company also holds a highly prospective lithium project in Australia – Greenbushes South.
The company’s flagship Hombre Muerto West (HMW) project hosts some of Argentina’s highest grade and lowest impurity levels with an inventory of 8.6 million tons (Mt) contained LCE @ 859 mg/L lithium, with 4.7 Mt contained LCE @ 866 mg/L Li in the measured category. The 100-percent-owned property also leverages close proximity to Livent Corporation’s El Fenix operation and Allkem’s Sal de Vida projects.
Galan has signed a commercial agreement with the Catamarca Government supporting the grant of permits to enable the commercialisation of lithium chloride concentrate from HMW to be sold locally or exported internationally.
In August 2024, Galan entered into a memorandum of understanding with Chengdu Chemphys Chemical Industry Co. for a prepayment offtake agreement pertaining to the HMW project. Once a definitive agreement is executed, Chemphys will purchase a total of 23,000 tonnes lithium carbonate equivalent, as a lithium chloride product, over the first five years of production from Phase 1 of the HMW project. Chemphys will also provide Galan with a US$40 million offtake prepayment facility to facilitate the continued development of Phase 1 of the HMW project.
Catamarca Governor Raúl Jalil and Galan Lithium Managing Director Juan Pablo Vargas de la Vega in Catamarca.
Galan’s secondary Candelas project comprises a sizable valley-filled channel with a potential indicated presence of substantially high-volume brine characteristics. The project’s maiden resource estimates stand upwards of 685 kilotons (kt) LCE, based on surveying from October 2019, and demonstrate exceptional discovery opportunities across this underexplored asset. Candelas has been rolled into Phase 4 of Galan’s targeted expansion plans, towards 60 ktpa LCE production by 2030.
Galan’s 100-percent-owned Greenbushes South Project is located in Western Australia and boasts advantageous positioning 3 kilometers south of the prolific Greenbushes lithium mine owned by Talison, Tianqi, IGO and Albermarle. Drilling of the first target was completed in July 2023. Galan is currently developing land access agreements for future drilling campaigns at Greenbushes South. An exploration license has been granted to the company for an additional key tenement, E70/4629 targeting lithium-bearing pegmatites for five years to February 2029. The tenement is approximately 260 kilometres south of Perth, the capital of Western Australia, and less than 30 kilometres south of the Greenbushes pegmatite at the Greenbushes Mine.
In 2023, Galan entered into an exclusive binding agreement with Redstone Resources to acquire 100 percent of the Camaro-Taiga-Hellcat property blocks from Infinity Stone Ventures (CSE:GEMS,GEMSF,FSE:B2I). The assets are located in the world-class James Bay Lithium Province in Quebec, collectively covering 5,187 hectares. The joint venture also includes an option to acquire 100 percent of the PAK East and PAK Southeast Lithium Project, spanning 1,415 hectares in Ontario’s Electric Avenue near Frontier Lithium’s PAK Lithium Project.
Galan has a highly experienced management team with over a century of professional expertise in the resource, finance and energy sectors. This results-oriented board and their vested interest in the company's success prime Galan for exceptional discovery potential and advanced development of its high-quality projects.
Company Highlights
- Galan Lithium is an ASX-listed company developing lithium brine projects within South America’s lithium triangle on the Hombre Muerto salar in Argentina.
- The company has two high-quality projects in the works: its flagship Hombre Muerto West (HMW) and the Candelas lithium project, both in Argentina. The two projects combined bring the company’s current total mineral resource estimate to 8.6 million tons lithium carbonate equivalent @ 859 mg/L lithium.
- HMW leverages advantageous positioning near notable mining operations, including Livent Corporation’s El Felix project and hosts exceptional high-grade lithium and low impurity resources.
- The HMW Phase 1 (5.4 ktpa LCE) execution plan is progressing well with the delivery of the first evaporation-ready pond expected in 2024, and production in H1 2025.
- The HMW Phase 2 definitive feasibility study (DFS) delivers compelling economics with 21 kilo-tons per annum (ktpa) lithium carbonate equivalent (LCE) operation at HMW, targeting a high-quality, 6 percent concentrated lithium chloride product (equivalent to 12.9 percent lithium oxide or 31.9 percent LCE) in 2026.
- Galan has signed a commercial agreement with the Catamarca Government enabling the commercialisation of lithium chloride concentrate from HMW to be sold locally or exported internationally.
- Galan is transitioning into a major lithium project developer and remains committed to conducting fast-tracked lithium development in its prolific projects with a target production of 60 ktpa LCE from HMW and Candelas by 2030.
Key Projects
Hombre Muerto West Project
The 100-percent-owned Hombre Muerto West project is a large land property that sits on the west coast of the Hombre Muerto salar in Argentina, the second-best salar in the world for the production of lithium from brines. The property also leverages strategic positioning adjacent to notable competitors like Livent to the east.
Galan has increased HMW’s mineral resource to 8.6 Mt contained LCE @ 859 mg/L lithium (previously 7.3 Mt LCE @852 mg/L lithium), one of the highest grade resource estimates declared in Argentina. HMW’s measured resource is now at 4.7 Mt contained LCE @ 866mg/L lithium. Inclusion of the Catalina tenure adds ~1.3 Mt LCE to the HMW resource.
The pilot plant at HMW has validated the production of lithium chlorine concentrate, adding reagents to eliminate impurities, and generating a concentrate at 6 percent lithium. The plant comprises pre-concentration ponds, a lime plant, a filter press and concentration ponds.
Pilot Plant at HMW
Construction for Phase I has already commenced for 5.4 ktpa LCE production at HMW, and aims to deliver lithium chloride production in H1 2025. The fourth long-term pumping test (PBRS-03-23) results at HMW record an outstanding lithium mean grade of 981 mg/L - the highest reported grade from a production well in the Hombre Muerto Salar.
In April 2024, Galan announced 33 percent project completion with pond construction at 45 percent and project execution is advancing as planned.
A definitive feasibility study (DFS) for phase 2 shows a 20.85 ktpa LCE operation at HMW, targeting high-quality, 6 percent concentrated lithium chloride product (equivalent to 12.9 percent lithium oxide or 31.9 percent LCE) in 2026. The DFS also indicated phase 2 will deliver a post-tax NPV (8 percent) of US$2 billion, IRR of 43 percent and free cash flow of US$236 million per year. Phase 2 provides an exceptional foundation for significant economic upside in phases 3 and 4, targeting 60 ktpa LCE production by 2030.
The company has signed a binding term sheet with a wholly owned subsidiary of Glencore for offtake of up to 100 percent of its premium lithium chloride concentrate from HMW, and the offer to provide or facilitate a secured financing prepayment facility for US$70 to US$100 million, subject to conditions precedent being met.
Galan also entered into a memorandum of understanding with Chengdu Chemphys Chemical Industry Co. for a prepayment offtake agreement. Once a definitive agreement is executed, Chemphys will purchase a total of 23,000 tonnes lithium carbonate equivalent, as a lithium chloride product, over the first five years of production from Phase 1 of the HMW project. Chemphys will also provide Galan with a US$40 million offtake prepayment facility to facilitate the continued development of the HMW project.
Galan is targeting first-phase HMW lithium concentrate production in H1 2025
Galan now has 100 percent full ownership of the Catalina tenement that borders the Catamarca and Salta Provinces in Argentina. The newly secured Catalina tenure has a strong potential to significantly add to the existing HMW resource. The tenure also covers the Catalina, Rana de Sal II, Rana de Sal III, Pucara del Salar, Deseo I and Deceo II tenements.
Greenbushes South Lithium Project
The 100-percent-owned Greenbushes South lithium project is located near Perth, Western Australia, and is three kilometers south of the world-class Greenbushes lithium mine, managed by Talison Lithium. The Greenbushes South tenements can be found along the Donnybrook-Bridgetown Shear Zone geologic structure, which hosts the lithium-bearing pegmatites at the Greenbushes Lithium Mine.
Greenbushes South covers nearly 315 square kilometers, and hosts elevated pathfinder elements with well-defined anomalies adjacent to the property.
Management Team
Richard Homsany - Non-executive Chairman
Richard Homsany is an experienced corporate lawyer and has extensive board and operational experience in the resources and energy sectors. He is the executive chairman of ASX-listed uranium exploration and development company Toro Energy Limited, executive vice-president of Australia of TSX-listed uranium exploration company Mega Uranium and the principal of Cardinals Lawyers and Consultants, a boutique corporate and energy & resources law firm. He is also the chairman of the Health Insurance Fund of Australia (HIF) and listed Redstone Resources and Central Iron Ore and is a non-executive director of Brookside Energy Homsany’s past career includes time working at the Minera Alumbrera Copper and Gold mine located in the Catamarca Province, northwest Argentina.
Juan Pablo (‘JP’) Vargas de la Vega - Founder and Managing Director
Juan Pablo Vargas de la Vega is a Chilean/Australian mineral industry professional with 20 years of broad experience in ASX mining companies, stockbroking and private equity firms. JP founded Galan in late 2017. He has been a specialist lithium analyst in Australia, has also operated a private copper business in Chile and worked for BHP, Rio Tinto and Codelco.
Daniel Jimenez - Non-executive Director
Daniel Jimenez is a civil and industrial engineer and has worked for a world leader in the lithium industry, Sociedad Química y Minera de Chile, for over 28 years. He was the vice-president of sales of lithium, iodine and industrial chemicals where he formulated the commercial strategy and marketing of SQM’s industrial products and was responsible for over US$900 million worth of estimated sales in 2018.
Terry Gardiner - Non-executive Director
Terry Gardiner has 25 years’ experience in capital markets, stockbroking and derivatives trading. Prior to that, he had many years of trading in equities and derivatives for his family accounts. He is currently a director of boutique stockbroking firm Barclay Wells, a non-executive director of Cazaly Resources, and non-executive chairman of Charger Metals NL. He also holds non-executive positions with other ASX-listed entities.
María Claudia Pohl Ibáñez - Non-executive Director
María Claudia Pohl Ibáñez is an industrial civil industrial engineer with extensive experience in the lithium production industry. Until recently, she worked for world leader in the lithium industry Sociedad Química y Minera de Chile (NYSE:SQM, Santiago Stock Exchange:SQM-A, SQM-B) for 23 years, based in Santiago, Chile. During her time at SQM, she held numerous senior leadership roles including overseeing lithium planning and studies. Ibáñez brings significant lithium project evaluation and operational experience whilst joining the board at a critical juncture in Galan’s journey to becoming a significant South American lithium producer. Since leaving SQM in late 2021, Ibáñez has been managing partner and general manager of Chile-based Ad-Infinitum, a process engineering consultancy, with a specific focus on lithium brine projects under study and development, and the associated project evaluations.
Ross Dinsdale - Chief Financial Officer
Ross Dinsdale has 18 years of extensive experience across capital markets, equity research, investment banking and executive roles in the natural resources sector. He has held positions with Goldman Sachs, Azure Capital and more recently he acted as CFO for Mallee Resources. He is a CFA charter holder, has a Bachelor of Commerce and holds a Graduate Diploma in Applied Finance.
Nevada Lithium Significantly Increases the Size and Grade of Lower Zone Inferred Mineral Resources at Bonnie Claire to 25.634 Mt LCE at 3,085 ppm Li. Reports Maiden Indicated Resources of 5.167 Mt LCE at 3,519 ppm Li and 2.318 Mt B at 8,404 ppm Boron
Nevada Lithium Resources Inc. (CSE: NVLH; OTCQB: NVLHF; FSE: 87K) (“Nevada Lithium” or the “Company”) is pleased to provide an updated mineral resource estimate (“Mineral Resource Estimate”) at its 100% owned Bonnie Claire Lithium Project (the “Project” or “Bonnie Claire”), located in Nye County, Nevada. The Mineral Resource Estimate was prepared by Global Resource Engineering (“GRE”) in accordance with Canadian Institute of Mining and Metallurgy and Petroleum (“CIM”) definitions, as required under National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and has an effective date of September 24, 2024. Most notably, the Lower Zone (as defined below) gives an indicated resource of 275.85 million tonnes (“Mt”) at 3,519 parts per million (“ppm”) lithium (“Li”) (5.167 Mt lithium carbonate equivalent (“LCE”)) and 275.85 Mt at 8,404 ppm boron (“B”) (2.318 Mt B), together with an inferred resource of 1,561.06 Mt at 3,085ppm lithium (25.634 Mt LCE).
Nevada Lithium’s CEO, Stephen Rentschler, comments:
“We are excited to announce the impact of the new drilling in the Lower Zone of mineralized lithium and boron at Bonnie Claire. With the significantly increased tonnage and higher grades, Bonnie Claire is potentially unrivaled by other sediment hosted lithium projects in Nevada and is now amongst the largest lithium resources in the world and amongst the highest-grade in Nevada.
Compared to Bonnie Claire’s previous resource report, the new drilling in the Lower Zone has led to a 68% increase in LCE tonnage, at an average grade that has tripled from 1,000 ppm to over 3,000 ppm. It includes intervals where grades exceed 6,000ppm. These increases have occurred using a cut-off grade that has more than doubled to 1,800 ppm. For the first time, we are also able to report a significant high-grade boron resource that we believe further enhances the Project’s value.
The Lower Zone remains open to the NW, NE and SE, for future resource expansion. Furthermore, the new infill drilling has resulted in an indicated resource classification. We are confident that the continuity of the mineralization will allow us to easily upgrade additional resources from the inferred classification into indicated resources and add new inferred resources.
The results from this report will feed directly into ongoing work on an updated Preliminary Economic Assessment (“PEA”) that we are targeting for completion at the end of Q1 2025. This PEA will reflect the increased tonnages and grades reported today. The PEA will also include the metallurgical processes currently being developed by Fluor Enterprises Inc., as reported in our news release dated October 23, 2024.
I would like to offer my congratulations and thanks to Nevada Lithium’s technical team for this tremendous success. Their dedication and vision has led to results that are of global significance and, in my opinion, will lead to future increases in shareholder value.”
Highlights:
- Resources for the deposit have been separated into two zones; a Lower Zone (i.e., mineralization hosted by Lower Claystone and Lower Sandstone units) (the “Lower Zone”) and an Upper Zone (i.e., mineralization hosted by an Upper Claystone unit) (the “Upper Zone”).
- The updated Mineral Resource Estimate includes assays from eleven (11) additional exploration and infill drill holes completed since the 2021 maiden resource estimate. 2023 & 2024 drilling intersected the lower claystone which hosts the high grade (up to 7,160ppm) lithium, and which remains open in three directions. It is reasonably expected that the bulk of inferred resources can be upgraded to indicated through additional infill drilling.
- The Lower Zone gives an indicated resource of 275.85 Mt at 3,519 ppm lithium (5.167 Mt LCE) and 275.85 Mt at 8,404 ppm Boron (2.318 Mt B), together with an inferred resource of 1,561.06 Mt at 3,085ppm lithium (25.634 Mt LCE). This base-case resource is based on a 1,800ppm lithium cutoff, constrained by hydraulic borehole mining (“HBHM”) parameters, and an assumed 60% recovery of the host strata.
- The Upper Zone gives an indicated resource of 188.08 Mt at 1,074 ppm lithium (1.075 Mt LCE) and 152.11 Mt at 1,519 ppm boron (0.231 Mt B), together with an inferred resource of 451.10 Mt at 1,106 ppm lithium (2.655 Mt LCE) and 270.53 Mt at 1,505 ppm boron (0.407 Mt B). This resource is calculated at a 900 ppm lithium cut-off, within a constraining pit shell, and would be mined by conventional open-pit methods
- The 60% HBHM recovery is based purely on a cylindrical cavity and does not account for any improved recoveries from the expected plastic deformation of the deep zone material.
- The updated Mineral Resource Estimate will be included into ongoing work on an updated PEA expected for completion at the end of Q1 2025.
Join Stephen Rentschler, CEO of Nevada Lithium for a LIVE virtual event
to learn more about the Company’s findings and ask questions during the interactive Q&A.
Date and time: Tuesday, November 19th at 1 pm ET / 10 am PT
to learn more about the Company’s findings and ask questions during the interactive Q&A.
Date and time: Tuesday, November 19th at 1 pm ET / 10 am PT
Results and Interpretation
Bonnie Claire consists of a sedimentary package of volcaniclastic origin, laid down in a NW-SE basin striking basin. Lithium and boron mineralization are located within an Upper Zone, hosted within an upper claystone unit encountered by drilling from surface to about 425 ft (130m), and a Lower Zone, hosted within lower claystone and lower sandstone units intersected from 1,500-2,850ft (457-853m). Lithium mineralization appears to be hosted within non-swelling clay phases such as illite, or as lithium carbonate or salt within the sedimentary matrix. Boron mineralization appears to be associated with searlesite, a sodium borosilicate mineral.
While the Upper Zone and Lower Zones exhibit lithium and boron mineralization, they are separated spatially, and exhibit differences in metallurgical behaviour, leading the Company to treat them as two distinct deposits with different mining methods.
Lower Zone
While early exploration concentrated on mineralization in the Upper Zone, the Company has shifted its focus to mineralization in the Lower Zone, hosted in the lower claystone and sandstone units and containing the bulk of lithium and boron. This Lower Zone remains open to the NW, NE and SE. The current plan is to use an underground HBHM method, with a higher 1,800ppm cut-off. The Mineral Resource Estimate for the Lower Zone is presented in Table 1-1 and the sensitivity of the Lower Zone to cutoff grade is presented in Table 1-2.
Table 1-1: Bonnie Claire Lower Zone Mineral Resource Estimate With 60% Hydraulic Borehole Mining Recovery
- The effective date of the Mineral Resource Estimate is September 24, 2024.
- The Qualified Person (as such term is defined in NI 43-101) for the estimate is Terre Lane of GRE.
- Mineral resources are not mineral reserves and do not have demonstrated economic viability.
- Mineral resources are reported at an 1,800 ppm Li cutoff, an assumed lithium carbonate (Li2CO3) price of $20,000/tonne, 5.323 tonnes of Li2CO3 per tonne Li.
- Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.
Table 1-2: Bonnie Claire Lower Zone Resource Estimate Sensitivity to Cutoff Grade With 60% Hydraulic Borehole Mining Recovery
Upper Zone
The Upper Zone extends from surface to about 425ft (130m) depth and would be mined by conventional open-pit methods, reflected in a lower 900 ppm cutoff. The Mineral Resource Estimate for the Upper Zone is presented in Table 1-3, and the Upper Zone sensitivity to cutoff grade is presented in Table 1.4
Table 1-3: Bonnie Claire Upper Zone Mineral Resource Estimate Within a Constraining Pit Shell
- The effective date of the Mineral Resource Estimate is September 24, 2024.
- The Qualified Person for the estimate is Terre Lane of GRE.
- Mineral resources are not mineral reserves and do not have demonstrated economic viability.
- Mineral Resources are reported at a 900 ppm Li cutoff, an assumed lithium carbonate (Li2CO3) price of $20,000/tonne, 5.323 tonnes of Li2CO3 per tonne Li, 75% recovery, a slope angle of 18 degrees, no royalty, processing and general and administrative cost of $26.52/tonne, mining cost of $3.52/tonne, and selling costs of $100/tonne Li2CO3.
- Numbers in the table have been rounded to reflect the accuracy of the estimate and may not sum due to rounding.
Table 1.4: Bonnie Claire Upper Zone Resource Estimate Sensitivity to Cutoff Grade Within a Constraining Pit Shell
Cautionary Statements Regarding Mineral Resource Estimates:
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources will be converted into mineral reserves. Inferred mineral resources are that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration.
Resource Estimation Parameters
The updated Mineral Resource Estimate for Bonnie Claire was performed using Leapfrog® Geo and Leapfrog® Edge software. Leapfrog® Geo was used to update the geologic model, and Leapfrog® Edge was used for geostatistical analysis and grade modeling in the block model. An oblique view of the block model at Bonnie Claire is illustrated by Figure 1.1
Figure 1.1: Oblique view from southwest of block model for Bonnie Claire generated by Leapfrog® Edge software. Lithium ppm legend to right.
The drill hole database used for the estimation included:
- 21 exploration drill holes, including 8 reverse circulation holes and 11 vertical diamond core holes
- 9,159.54 meters of drilling in exploration drill holes
- 1,898 assay intervals in exploration drill holes
- Minimum grade of 18 ppm Li in exploration drill holes
- Maximum grade of 7,160 ppm Li in exploration drill holes
Cumulative probability plots of lithium and boron assay values did not exhibit grade breaks that would indicate the presence of outlier data, so the data were not capped or clipped. A specific gravity of 1.7 grams per cubic centimeter (g/cm3) for all lithological units, comparable to other similar lithium deposits. Drill hole assay values were composited to intervals of equal length to ensure that the samples used in statistical analysis and estimations were equally weighted. The majority of samples were collected at 6.096-meter (20-foot) intervals, with some samples collected at other intervals up to a maximum of 12.192 meters (40 feet). Down-the-hole composites were created from the Li and B assays within upper claystone, lower claystone, and lower sandstone mineralized domains, with the following specifications: 6.096-meter (20-foot) intervals, with anything less than 3.048 meters (10 feet) added to the previous interval. This resulted in 1,313 Li composite intervals with Li grades from 40.37 ppm to 5,764.48 ppm and 857 B composite intervals with B grades from 10 ppm to 14,658.8 ppm.
Qualified Person Terre Lane estimated Li and B grades into the block model using inverse distance to the second power (“ID2”) and for each method, a single pass was conducted at the ellipsoid ranges (1,600 meters x 900 meters x 150 meters). All blocks with modeled grade were coded as inferred resources. The search was restricted to a minimum of four samples and a maximum of 12 samples per block and a maximum of three samples per drill hole, thereby requiring data from a minimum of two drill holes to populate a block. For statistical comparison, nearest neighbor (“NN”) and ordinary kriging (“OK”) models were run to serve as comparisons with the estimated results from the ID2 method. The estimate means for the global population as well as the means for the estimation domains are similar, suggesting the ID2 estimate is not biased or overestimating the grades. The reduction in mean, coefficient of variation, and maximum from composites to the ID2 estimate shows an appropriate amount of smoothing. Swath plots and visual comparison of composites versus block model values by section and plan show good correlation.
Mining Methods
Hydraulic Borehole Mining of Lower Zone
As disclosed in their April 16, 2024, news release, Nevada Lithium contracted Kinley Exploration LLC (“Kinley”) to provide a preliminary evaluation of HBHM for Bonnie Claire.
Kinley was asked to establish a reasonable and economic mining strategy utilizing HBHM within the Bonnie Claire Lithium resource deposit to extract lithium in a continuous, efficient, cost effective and safe manner in the targeted higher grade zone from 1,500-2,800ft (457-853m) deep.
Kinley’s analysis took into consideration that the mineralization is highly plastic and with the assistance of jetting and pumping would likely flow. With this information, coupled with the significant cost of backfilling and then the consideration of subsidence, Kinley evaluated HBHM without backfilling and using directional drilling from a stable position.
The Kinley model assumed the highly mobile mineralization within the target section would behave plastically and flow in a fluid state or caving condition to the mining system intake. This relies on flow of the mobilized mineralization, accelerated by high pressure jetting to a centralized well, then pumped back to surface. GRE assumes a more conservative recovery of 60% because of potential mass flow issues that need to be evaluated during test mining.
Open Pit Mining of Upper Zone
Open pit mining of the Upper Zone at Bonnie Claire would likely use conventional mining equipment of hydraulic shovels and mining haul trucks but could possibly use scrapers. The soil is extremely soft and typically saturated. As a result, pit wall slopes would need to be relatively shallow; for the Lerchs-Grossman pit exercise in Section 14, the GRE Qualified Person used 18° side wall slopes. Additional geotechnical testing would need to be completed to determine stable side wall slope angles, bench heights, and catch bench widths. Dewatering portions of the pit, freezing, or other forms of stabilizing pit slopes and bottom may be required.
Mineral Processing and Metallurgical Testing
The mineral assemblage changes with depth. The Upper Zone generally shows lower grade lithium and boron and higher calcite content, while the Lower Zone tends to be significantly higher-grade lithium and boron and lower calcite content. The final mine design has not been completed, and the project may have several options: mine the upper portion, mine the lower portion, or mine the entire deposit. As a result, two distinct treatment options have been evaluated.
For the Upper Zone, a thermal treatment was developed that involved a sulfate calcination followed by a hot water leach. This process had the advantage of not solubilizing as many impurities, particularly iron. High lithium extractions (up to 80%) were achieved.
New drill samples from the Lower Zone were tested, and the calcination process was not effective due to the low melting point of the boron minerals (searlesite). Subsequently, sulfuric acid leaching was evaluated to treat the deeper deposit material. The acid treatment demonstrated that the lithium host is readily soluble in a strong sulfuric acid solution, achieving extractions of approximately 85%. The conventional downstream purification of the acid liquor had challenges for the upper sections of the deposit due to high iron solubilization.
Boron concentrations in the Lower Zone warrant a separate boron recovery circuit. Boron is recovered from the leach liquor after primary impurity removal via ion exchange to produce a boric acid product.
Quality Assurance / Quality Control
A quality assurance / quality control protocol following industry best practice was incorporated into the drill program by Nevada Lithium. Drilling was conducted by Major Drilling Group International Inc. (“Major Drilling”). Core was transported by Major Drilling from the collar location and received by Nevada Lithium staff at the Company storage facility in Beatty, Nevada. The facility is only accessible to Nevada Lithium staff and remains otherwise locked. Received core was logged and cut at the facility by Nevada Lithium staff. Logging and sampling included the systematic insertion of blanks, duplicates and certified reference material (“CRM”) MEG Li.10.12 and OREAS 750 into sample batches at an insertion rate of approximately 10%. All core samples collected were transported by Company staff to ALS USA Inc.’s laboratory in Reno, Nevada. for sample preparation. Sample preparation comprises initial weighing (Code WEI-21), crushing quality control test (CRU-QC), pulverizing quality control test (PUL-QC), fine crushing at 70% <2mm (CRU-31), sample split using Boyd rotary splitter ((SPL-22Y), pulverizing up to 250g 85% <75 µm (PUL-31), crush entire sample (CRU-21), pulp login (LOG-24) and a crusher wash (final crusher wash between samples (WSH-21). Samples were shipped to ALS USA Inc.’s Vancouver laboratory in Burnaby British Columbia, where the samples were analyzed using 48-element four-acid inductively coupled plasma mass spectrometry (ME-MS61) and B/Li N₂O₂ fusion inductively coupled plasma atomic emission spectroscopy high-grade (ME-ICP82b) procedures.
Data verification by GRE staff included: an on-site inspection of the Project site and core, reverse circulation and chip tray storage facilities, check sampling, geologic maps and reports, and manual auditing of the Project drill hole database. GRE’s Qualified Persons have been involved with the project since 2018. They visited the site in 2018 after drilling, during drilling in 2020 and 2022. The results from the site inspection, visual sample inspection and check sampling for each drilling campaign are given below. Based on the results of GRE’s Qualified Persons check of the sampling practices, verification of drill hole collars in the field, results of the check assay analysis, visual examination of selected core intervals, and the results of both manual and mechanical database audit efforts, GRE considers the collar, lithology, and assay data contained in the project database to be reasonably accurate and suitable for use in estimating mineral resources.
The data verification of the drilling campaigns shows that data from the rotary mud drilling was suspect and not used in the resource estimate. Open pit mining and processing methods, costs and infrastructure needs were verified by Ms. Lane in comparison to other similar sized open pit mines operating in the western USA. Borehole mining costs were developed by Kinley with coordination with GRE. Other cost data used in the report was sourced from the most recent infomine cost data report. All costs used to determine reasonable prospects for economic extraction were verified and reviewed by GRE and were assessed to be current and appropriate for use.
Metallurgical testing was completed for Bonnie Claire by a well-known commercial metallurgical laboratory. GRE reviewed all available metallurgical reports. GRE confirmed that the mineralization found at the Project is similar to another project where GRE has performed other consulting work and finds that the test work for Bonnie Claire shows that the material behaves in a similar manner, specifically in lithium extraction and recovery and reagent consumption. Given the similarities of the Bonnie Claire material to other similar projects, this provides a good basis for benchmarking the metallurgical test. The work appears to be professionally completed and is well documented and is suitable for estimation of lithium extraction and recovery calculations in the Mineral Resource Estimate.
About Nevada Lithium Resources Inc.
Nevada Lithium Resources Inc. is a mineral exploration and development company focused on shareholder value creation through its core asset, the Bonnie Claire Lithium Project, located in Nye County, Nevada, where it holds a 100% interest.
For further information on Nevada Lithium and to subscribe for updates about Nevada Lithium, please visit its website at: https://nevadalithium.com/
Qualified Person Disclosure
The technical information in the above disclosure has been reviewed and approved by the designated Qualified Person under NI 43-101, Dr. Jeff Wilson, PhD, P.Geo, Vice President of Exploration for Nevada Lithium. Dr. Wilson is not independent of Nevada Lithium, as he is Vice President of Exploration for Nevada Lithium.
The technical information in the above disclosure has also been reviewed and approved by Terre Lane, a ‘Qualified Person’ as defined under NI 43-101. Ms. Lane is Principal Mining Engineer with GRE and considered to be “independent” of the Company under Section 1.5 of NI 43-101.
On behalf of the Board of Directors of Nevada Lithium Resources Inc.
“Stephen Rentschler”
Stephen Rentschler, CEO
For further information, please contact:
Nevada Lithium Resources Inc.
Stephen Rentschler
CEO and Director
Phone: (647) 254-9795
E-mail: sr@nevadalithium.com
Media Inquiries
E-mail: info@nevadalithium.com
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The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this news release. The Canadian Securities Exchange has not approved or disapproved of the contents of this news release.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable Canadian securities legislation. These statements relate to matters that identify future events or future performance. Often, but not always, forward looking information can be identified by words such as “could”, “pro forma”, “plans”, “expects”, “may”, “will”, “should”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “potential” or variations of such words including negative variations thereof, and phrases that refer to certain actions, events or results that may, could, would, might or will occur or be taken or achieved.
The forward-looking statements contained herein include, but are not limited to, statements regarding: the performance of the Project; results of the 2023 Exploration and Development Plan (including, without limitation, its mineral resources, current claims and its ability to utilize global lithium needs); any plans following the Mineral Resource Estimate; the preparation of an updated PEA in 2025; and the performance of lithium as a commodity, including the sustained lithium demand and prices.
In making the forward looking statements in this news release, Nevada Lithium has applied several material assumptions, including without limitation: market fundamentals that result in sustained lithium demand and prices; the receipt of any necessary permits, licenses and regulatory approvals in connection with the future development of Bonnie Claire in a timely manner; the availability of financing on suitable terms for the development; construction and continued operation of Bonnie Claire; the Project containing mineral resources; and Nevada Lithium’s ability to comply with all applicable regulations and laws, including environmental, health and safety laws.
Investors are cautioned that forward-looking statements are not based on historical facts but instead reflect Nevada Lithium’s management’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of managements considered reasonable at the date the statements are made. Although Nevada Lithium believes that the expectations reflected in such forward- looking statements are reasonable, such information involves risks and uncertainties, and under reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements expressed or implied by Nevada Lithium. Among the key risk factors that could cause actual results to differ materially from those projected in the forward- looking statements are the following: operating and technical difficulties in connection with mineral exploration and development and mine development activities at the Project; estimation or realization of mineral reserves and mineral resources, requirements for additional capital; future prices of precious metals and lithium; changes in general economic, business and political conditions, including changes in the financial markets and in the demand and market price for commodities; possible variations in ore grade or recovery rates; possible failures of plants, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays or the inability of Nevada Lithium to obtain any necessary approvals, permits, consents or authorizations, financing or other planned activities; changes in laws, regulations and policies affecting mining operations; currency fluctuations, title disputes or claims limitations on insurance coverage and the timing and possible outcome of pending litigation, environmental issues and liabilities; risks relating to epidemics or pandemics such as COVID-19, including the impact of COVID-19 on Nevada Lithium’s business; as well as those factors discussed under the heading “Risk Factors” in Nevada Lithium’s latest Management Discussion and Analysis and other filings of Nevada Lithium filed with the Canadian securities authorities, copies of which can be found under Nevada Lithium’s profile on the SEDAR+ at www.sedarplus.ca.
Should one or more of these risks or uncertainties materialized, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Nevada Lithium has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Nevada Lithium does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.
Warrego East Drilling Permitted as Takeover Action Underlines Prospectivity of Tennant Creek Mineral Field
- The $82M takeover of Tennant Creek Mining Group Pty Ltd (TCMG) by London-listed Pan African Resources PLC (AIM: PAF) has reignited interest in the underexplored Tennant Creek Mineral Field (TCMF)1
- The corporate activity comes as Metal Australia finalises plans for a substantial exploration program at its Warrego East copper-gold project2 after the Northern Territory Government authorised the Company’s Mine Management Plan. Warrego East is adjacent to, and immediately east of, the high- grade Warrego mine and Mineral Resource held by TCMG and its Joint Venture partner, Emmerson Resources (ASX: ERM)3
- The program will test a series of priority gravity and magnetics defined ironstone hosted copper- gold targets within a corridor which links the Warrego mine with the Gecko and Orlando copper- gold deposits4,5. The Warrego mine historically produced 4.95Mt @ 2.0% Cu and 8g/t Au6
- Weather permitting, the field exploration program will commence as soon as land holder access agreements are finalised.
Metals Australia CEO Paul Ferguson commented:
“We welcome the clear show of confidence Pan African Resources has demonstrated in the Tennant Creek Mineral Field via its $82 million takeover of TCMG, which is Emmerson Resources’ JV partner in the tenements hosting the Warrego copper-gold mine and various mineral resources. This comes as Metals Australia finalises plans for a substantial field exploration program at its Warrego East copper-gold project, located immediately adjacent to and east of those JV tenements.
The takeover of TCMG by Pan African Resources demonstrates the potential now being seen by bigger overseas players in the Tennant Creek Mineral Field. With a market cap of more than $1 billion, South African- based Pan African Resources has recognised the potential of this underexplored region to host significant mineral resources where less than 10% of drilling has extended beyond 150m in depth and where almost all significant deposits to date have been discovered under shallow cover.
The Warrego mine was identified undercover as a magnetic anomaly during an airborne survey conducted in 1956. Similar magnetic anomalies occur within a corridor through our Warrego East lease, with the Gekko and Orlando deposits discovered further to the east, within the same corridor.
Warrego went on to produce consistently between the early 1970s up until 1989 – averaging around 2% copper and 8gpt of gold during its production life.
We are working diligently to finalise the remaining requirements for our upcoming exploration program at Warrego East.
The planned program is a further illustration of Metals Australia’s status as one of the most active exploration companies, with field exploration programs recently completed at three projects and two more in the pipeline as we seek to unlock the true value of our portfolio in known mining districts in Australia and Canada.”
Figure 1: Metals Australia’s Tenements, TCMG tenements (acquired by PAF), Warrego Production6 in the TCMF.
This comes as the prospectivity of the Tennant Creek Mineral Field is further underlined by the $82 million takeover of TCMG announced on 5 November. Metals Australia’s Warrego East project is adjacent to, and immediately east of, the tenements hosting the Warrego mine and mineral resources held by TCMG and its JV partner Emmerson Resources.
The Tennant Creek Mineral Field has produced 25Mt @ 6.9 g/t gold (Au) & 2.8% copper (Cu)4, with historical production coming from deposits in outcropping areas – or undercover - such as the Warrego mine. Metals Australia’s tenements are located on Cu-Au trends in areas of shallow soil cover which have not been tested with modern exploration (see Figure 2 below). The tenements include EL32725 (granted) and EL32837, EL32937 and EL32410 (all under application), which were acquired by the Company as part of its 80% acquisition of Payne Gully Gold7 in 2022.
Click here for the full ASX Release
This article includes content from Metals Australia Ltd, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Where Does Tesla Get its Lithium? (Updated 2024)
In a mid-2023 Tesla earnings call, Musk seemed relieved to see prices for the battery metal had declined. “Lithium prices went absolutely insane there for a while,” he said. Lower battery prices will bring EVs closer to cost parity with internal combustion engines vehicles, leading to wider adoption and increased demand.
During the 2024 US presidential election, Musk threw his support behind Republican candidate and former president Donald Trump, who has been historically critical on electric vehicles and subsidies. Following Trump's election win on November 5, AP News reported that these stances could support Tesla as they would be more likely to harm smaller competitors who were less established than the EV giant. Tesla's share price shot upwards in response to the election outcome.
This spring, Musk invited Argentine President Javier Milei to the Tesla factory in Austin, Texas, where the two reportedly discussed the investment opportunities in Argentina's lithium sector. As a prominent member of the prolific Lithium Triangle, the South American nation is the fourth leading lithium producer by country.
Australia's hard-rock deposits and Chile's brines are also top sources for the world's lithium supply. But lithium refining is dominated by China, which accounted for 72 percent of global lithium processing capacity in 2022.
With the limelight on Musk and Tesla in 2024, investors should know where the electric car company sources its lithium.
Read on to learn more about where Tesla gets its lithium, how much lithium is in a Tesla battery and what the EV maker is doing to better secure its lithium supply chain.
In this article
Which lithium companies supply Tesla?
Tesla has deals with multiple lithium suppliers, some that are already producers and some that are juniors developing lithium projects.
At the end of 2021, Tesla inked a three-year lithium supply deal with top lithium producer Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460), and the Chinese company began providing products to Tesla starting in 2022. Major miner Arcadium Lithium (NYSE:ALTM,ASX:LTM), which is set to be acquired by Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) also has supply contracts in place with the EV maker.
China’s Sichuan Yahua Industrial Group (SZSE:002497) agreed to supply battery-grade lithium hydroxide to Tesla through 2030. Under a new, separate agreement finalized in June 2024, Yahua is set to supply Tesla with an unspecified amount of lithium carbonate between 2025 and 2027, with the option to extend the contract by another year.
Tesla also holds deals with junior miners for production that is yet to come on stream. Liontown Resources (ASX:LTR,OTC Pink:LINRF) is set to supply Tesla with lithium spodumene concentrate from its AU$473 million Kathleen Valley project. The deal is for an initial five year period set to begin this year, and production began in July 2024.The company expects to reach nameplate capacity in calendar Q1 2025.
In January 2023, Tesla amended its agreement with Piedmont Lithium (ASX:PLL,NASDAQ:PLL), which now supplies the US automaker with spodumene concentrate from its North American Lithium operation, a joint venture with Sayona Mining (ASX:SYA,OTCQB:SYAXF). The deal is in place through the end of 2025.
Even though Tesla has secured lithium from all these companies, the EV supply chain is a bit more complex than just buying lithium directly from miners. Tesla also works with battery makers, such as Panasonic (OTC Pink:PCRFF,TSE:6752) and CATL (SZSE:300750), which themselves work with other chemical companies that secure their own lithium deals.
What are Tesla batteries made of?
Tesla vehicles use several different battery cathodes, including nickel-cobalt-aluminum (NCA) cathodes and lithium-iron-phosphate (LFP) cathodes.
Tesla is known for using NCA cathodes developed by Japanese company Panasonic. This type of cathode has higher energy density and is a low-cobalt option, but has been less adopted by the industry compared to the widely used nickel-cobalt-manganese (NCM) cathodes. Aside from that, South Korea's LG Energy Solutions (KRX:373220) supplies Tesla with batteries using nickel-cobalt-manganese-aluminum (NCMA) cathodes.
As mentioned, it wasn’t just lithium that saw prices climb in 2021 — cobalt doubled in price that same year, and although it has declined since then, the battery metal remains essential for many EV batteries. Most cobalt mining takes place in the Democratic Republic of Congo, which is often associated with child labor and human rights abuses, fueling concerns over long-term supply.
That said, not all Tesla’s batteries contain cobalt. In 2021, Tesla said that for its standard-range vehicles it would be changing to lithium-iron-phosphate (LFP) cathodes, which are cobalt- and nickel-free. At the time, the company was already making vehicles with LFP chemistry at its factory in Shanghai, which supplies markets in China, the Asia-Pacific region and Europe.
In April 2023, Tesla announced that it planned to use this type of cathode chemistry for its short-range heavy electric trucks, which it calls "semi light." The company is also looking to use LFP batteries in its mid-sized vehicles.
At the top of this year, Tesla made moves to produce LFP batteries at its Sparks, Nevada, battery facility in reaction to the Biden Administration's new regulations on battery materials sourcing, especially on those sourced from China. Reuters reports Tesla battery supplier CATL will sell idle equipment to the car maker for use at the plant, which will have an initial capacity of about 10 gigawatt hours.
What company makes Tesla’s batteries?
Tesla works with multiple battery suppliers, including Panasonic, its longtime partner, as well as LG Energy Solutions, the second largest battery supplier in the world. They supply the EV maker with cells containing nickel and cobalt.
China's CATL has been supplying LFP batteries to Tesla for cars made at its Shanghai plant since 2020. It’s also been reported that BYD Company (OTC Pink:BYDDF,SZSE:002594) is supplying Tesla with the Blade battery — a less bulky LFP battery — which the car manufacturer has used in some of its models in Europe. Additionally, BYD is set to work with Tesla on its battery energy storage systems (BESS) in China, with a plan to supply 20 percent of Tesla's anticipated BESS manufacturing capacity, with CATL expected to cover 80 percent. The factory will use the companies' LFP batteries.
How much lithium is in a Tesla battery?
How much lithium do Tesla batteries actually contain? That question is tricky because many factors are at play. Typically, it depends on battery chemistry, as demonstrated by the chart below, as well as battery size.
For example, the standard Tesla Model S contains about 138 pounds, or 62.6 kilograms, of lithium. It is powered by a NCA battery, which has a weight of 1,200 pounds or 544 kilograms.
The amount of lithium in a Tesla battery can also vary based on model and year as the battery chemistries and weights are often changing with each new iteration.
Back in 2016, Musk said batteries don't require as much lithium as they do nickel or graphite — he described lithium as "the salt in your salad." As the chart below shows, the metal only makes up about a 10th of the materials in each battery.
Metal content of battery chemistries by weight.
Chart via BloombergNEF.
But a key factor to remember is volume — given the amount of batteries Tesla needs to meet its ambitious goals, it could hit a bottleneck if it can’t secure a steady supply of raw materials. Of course, this is true not just for Tesla, but for every carmaker producing EVs today and setting targets for decades to come.
For that reason, demand for lithium-ion batteries is expected to soar in the coming years. By 2030, Benchmark Mineral Intelligence forecasts that demand will grow by 400 percent to reach 3.9 terawatt-hours. Over the same forecast period, the firm sees the current surplus in the lithium supply coming to end.
Will Tesla buy a lithium mine?
For carmakers, securing lithium supply to meet their electrification goals is becoming a challenge, which is why the question of whether they will become miners in the future continues to come up.
But mining lithium is not easy, and despite speculation, it's hard to imagine an automaker being involved in it, SQM’s (NYSE:SQM) Felipe Smith said. “You have to build a learning curve — the resources are all different, there are many challenges in terms of technology — to reach a consistent quality at a reasonable cost,” he noted. “So it's difficult to see that an original equipment manufacturer (OEM), which has a completely different focus, will really engage into these challenges of producing.”
Even so, OEMs are coming to the realization that they might need to build up EV supply chains from scratch after the capital markets' failure to step up, Benchmark Mineral Intelligence’s Simon Moores believes. Furthermore, automotive OEMs that are making EVs will in effect have to become miners.
“I don't mean actual miners, but they are going to have to start buying 25 percent of these mines if they want to guarantee supply — paper contracts won't be enough,” he said.
However, last year Musk made it clear to investors that Tesla is more focused on developing its lithium refining capabilities, rather than getting into the mining game.
Where is Tesla's lithium refinery?
Tesla broke ground on its in-house Texas lithium refinery in the greater Corpos Christi area of the state last year. Tesla's lithium refinery capacity is expected to produce 50 GWh of battery-grade lithium per year. Musk said in late 2023 that construction of the lithium refinery would be completed in 2024, followed by full production in 2025.
This is an updated version of an article first published by the Investing News Network in 2022.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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