A Low-Cost Producer of Battery Materials in South America
This A.I.S. Resources Ltd. profile is part of a paid investor education campaign.*
A.I.S. Resources Ltd. (TSXV:AIS,OTCQB:AISSF) aims to be a high quality producer of battery raw materials, particularly lithium and manganese. To fulfill this goal, the company has assembled a team of highly-qualified professionals with a track record of success in exploration, production commodity trading and capital markets. A.I.S. Resources is currently focused on trading manganese ore from its projects in Peru and establishing its own mining operations. The exploration and development of its lithium brine project in northern Argentina, Guayatayoc Salar continues with the permitting process.
A.I.S. Resources is negotiating agreements to generate near-term cash flow opportunities through the trading of manganese fines and lump. The company commenced shipping manganese oxide from the San Jorge mine in July 2019 and will receive payment through a letter of credit once the ship departs from the port. The estimated cost associated with shipping the ore is between US$160 per tonne and US$200 per tonne for 42 percent manganese oxide. A.I.S. Resources is currently able to ship 2,000 tonnes of manganese oxide per month and has plans to increase its capacity to 40,000 tonnes per month through spot trades, its own mines and joint ventures.
The manganese is mined from the San Jorge mine, which is permitted to produce 350 tonnes per day. A.I.S. Resources currently operates under an offtake agreement at the San Jorge mine, where the estimated resource is 500,000 tonnes. There are six locations planned to be mined simultaneously. Other mines and outcrops are being assessed by the geological team for near term production opportunities and include the El Zorro outcrops and mine.
The Guayatayoc and Guayatayoc III properties are prospective for lithium brine. The Guayatayoc and Guayatayoc III properties were sampled in 2017 and returned values between 270 ppm and 900 ppm lithium in ponds and between 100 ppm lithium and 120 ppm lithium in the brine from the December 2018 drilling campaign on the side of the Guayatayoc III aquifer zone.
A.I.S. Resources has completed one drill hole at the Guayatayoc mine and is expecting to receive its drill permits for Guayatayoc III in the near term. With the permits in hand, the company intends to complete a four-hole drill program to establish a 700 liter per minute flow rate with greater than 250-300 ppm lithium content in the brine. From there, the company will work on developing a NI 43-101 compliant resource estimate and feasibility study as it pushes the project towards production.
Contributing to the company’s success is A.I.S. Resources President and CEO Philip Thomas. He brings his strong technical background in geology, geochemistry, geophysics and hydrology to the development of the company’s manganese and lithium assets. He is one of a few executives globally that has built and operated a lithium carbonate plant (in 2007), a certified mineral valuer and appraiser and geologist who has spent more than15 years trading ores with Chinese corporations.
A.I.S Resources’ Company Highlights
- A.I.S. Resources has dual strategies to achieve near term revenues through manganese trading and operating its own mines.
- A.I.S. Resources commenced manganese sales in June 2019.
- The company is in advanced stages of due diligence on its targeted manganese properties in Peru. Once a decision is made, an option, purchase or JV agreement will be executed.
- The San Jorge mine is permitted to produce 350 tonnes per day and contains an estimated 500,000 tonnes of ore available for immediate mining.
- The San Jorge mine manganese ore has been assayed at 45.7% Mn, with negligible iron and low silica impurities.
- The company is in the advanced exploration stages on its lithium properties in Argentina having completed geophysics, baseline environmental studies.
- High values of lithium have been recovered from brine at the Guayatayoc and adjacent Guayatayoc III properties.
- A four-hole drill program is expected to commence in the near term at the Guayatayoc III property.
- A 22kg sample of lithium carbonate has been produced from the Guayatayoc brines using fractional crystallization and ion exchange.
- A.I.S. Resources’ senior management is highly-skilled in exploration, geochemistry, lithium production techniques and have more than 17 years’ experience working in Argentina.
Manganese has a variety of applications, including steel production, aluminum and copper alloys, chemical applications and batteries. The metal is an integral component in the electric vehicles (EVs)/battery space and demand is likely to increase as more countries push forward green initiatives and legislation. The Nickel-Manganese-Cobalt (NMC) formula is looking to be replaced by higher manganese content. Under BASF’s proposed new move, it will start manufacturing NMC cathode material to comprise 70% manganese, while nickel will be cut to 20% and cobalt to a maximum of 5%. As green initiatives gain prominence, EV sales are expected to reach 140 million in 2030 (source BloombergNEF) and 508 million by 2040. Solar panels are following a similar curve at around 50 percent growth each year. By incorporating manganese into an all-inorganic perovskite solar cell, scientists have increased its efficiency and stability while keeping manufacturing costs. This surge in demand is expected to translate into increased demand for manganese as battery makers and end-users look for alternatives to using cobalt.
A.I.S Resources is focused on providing its shareholders with near term cash flow opportunities. To this aim, the company expects to trade up to 8,000 tonnes of manganese oxide per month in 2019 after initial shipments are completed.
The estimated cost of production and shipping 42% manganese oxide is competitive with global producers.
A.I.S. Resources intends to ramp up its manganese trading operations to 40,000 tonnes of manganese ore per month once it has established its own mining operations. The company currently has two LOIs in place to purchase the full amount of material, which will be mined from its mines in Peru.
A.I.S. Resources is also working on acquiring an interest in the Sangal mine located in the Cajamarca region of northern Peru. It will be a joint venture with our partner operating the San Jorge mine.
The global lithium market is expected to grow at a compounded annual growth rate (CAGR) of 13 percent between 2018 and 2022, according to a report by Research and Markets. The growth in the lithium market is anticipated to grow with the rise in EV sales. However, many analysts are concerned that the supply of battery materials cannot keep up with the demand. According to Albemarle, the demand for lithium-ion batteries from the EV industry is expected to grow at an annual rate of 20 to 30 percent through 2024.
The Guayatayoc and Guayatayoc III properties are located in Jujuy province in northwestern Argentina only 10 kilometers from Quebralena, Argentina. They cover approximately 5,000 hectares of the Guayatayoc salar which contains favorable geology for lithium and a past boron mine. A natural gas terminal is located 16 kilometers from the properties, and 240v power line within 3km. A.I.S. Resources has received its drilling permit and completed its drill program for the Guayatayoc mine and is waiting for approval on its drilling permit for Guayatayoc III concession.
Previous surface sampling work on the properties returned values between 200 ppm lithium and 900 ppm lithium. The 4:1 magnesium-to-lithium ratio offers the potential for low-cost processing. In 2013, Ms L Steinmetz published a Ph.D. study that presented the seismic analysis as well as a detailed analysis of the lithology of the basin.
The properties were surface sampled in 2017 and returned values between 270 ppm lithium and 900 ppm lithium in ponds and between 100 ppm lithium and 120 ppm lithium in the brine extracted from the drill hole on Guayatayoc Mina concession. Geophysical work completed by A.I.S. Resources identified a large highly-conductive layer at the 300 meters level that’s estimated to be 20 meters to 250 meters thick with low resistivity.
To date, the company has completed one drill hole at the Guayatayoc mine. Once A.I.S. Resources receives its drilling permits for Guayatayoc III, the company intends to complete four holes on the property. The key “green light” criteria is to establish a 700 liter per minute flow rate with >250 ppm lithium content in the brine. From there, the company will work on developing a NI 43-101 compliant resource estimate and feasibility study.
Laguna Vilama property
The 2,500-hectare Laguna Vilama property is located in Jujuy province in northwestern Argentina, along the Chilean and Bolivian borders. Early mapping on the project has identified a target area that may support the presence of a viable brine deposit. Surface sampling provided encouraging results.
A.I.S Resources’ Management Team
Martyn Element — Chairman of the Board and Director
Martyn Element is the founder and President of Element and Associates, which is primarily focused on sourcing and pursuing new business ventures globally. The group has a proven track record of successfully advising and marketing new business ventures. Element has cultivated an extensive global network and developed strong working relationships with specialized funds and other related parties in conjunction with the various aspects required to market these opportunities. He developed his experience in the public financial markets in Canada, prior to forming Element and Associates in 1989. Before entering the financial markets, he was involved in the food and beverage industry in Canada and the UK. Element brings a genuine personal interest to each project and a skill set of identifying needs and developing strategic plans as well as providing an extensive network of contacts.
Philip Thomas, B.Sc. (Geology), M.Bus.Marketing., MAIG, MAIMVA (CMV) — President and CEO
Phillip Thomas has degrees in Geology and Business Marketing and is a certified mineral valuer. He specializes in lithium, Manganese Gold and Copper mineralisation, and is experienced in finance and capital raising, management of mining companies, and planning, development and management of mining projects. He has established a number of significant exploration projects in Mexico, US, Chile, Argentina, Arizona and Australia. Previously, he was actively engaged in developing two major lithium projects in Argentina with Dr. Sorentino. Thomas has specialized in the exploration, development, financing and sales of lithium deposits within the public company structure.
He has extensive knowledge of the lithium carbonate markets in Japan, Korea, China and Taiwan. From 2003 to 2008, he was CEO of Admiralty Resources, where he developed the Rincon Salar project in Argentina and commenced production. He raised more than $6 million for this project and sold it in 2008. He and his team constructed a laboratory, pilot plant and developed a process to evaporate the brines in half the usual time. Phil has been active in three lithium projects in the last 9 years. Phillip holds an M.Bus.Marketing degree with high distinction from Monash University, a Bachelor of Science (Geology) degree and a Diploma in Finance. He is a member of the Australian Institute of Geoscientists and a Certified Mineral Valuer with the Australasian Institute of Mineral Valuers and Appraisers. He is both a qualified and competent person for NI43-101 and JORC ASX reporting in styles of mineralization for lithium brines, manganese, copper, gold and iron ore.
Kiki Smith — CFO and Director
With over 20 years of experience, Kiki Smith has been assisting private and public companies in the role of accountant, corporate controller and chief financial officer in mining, oil and gas, real estate, high technology, food production and investment fund management. She currently provides consulting services in mergers and acquisitions, financial reporting and regulatory compliance to several public and private companies in the resource, food production and investment sectors. She graduated from the University of British Columbia in 1989 with a Bachelor of Arts degree in economics. She is a member of the Chartered Professional Accountants of British Columbia.
Anthony Balme, FCA — Director
Anthony Balme is an active participant in a number of public and private resource ventures. In the private sector, he is Chairman of Carter Capital Ltd., Lymington Underwriting (insurance) and Alton Resource Corporation. In the public sector, he is Chairman of Forum Energy Metals, listed on the TSX, and formerly of Ortac Resources, listed on the AIM market. One of his focuses is identifying early stage opportunities in the resource sector and arranging financings to advance projects to the public markets in both the UK and Canada.
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