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Canada’s minister of environment issued a positive environmental assessment decision for the project on Wednesday, stating that Whabouchi is not likely to cause significant adverse environmental affects.
Nemaska Lithium‘s (TSXV:NMX,OTCQX:NMKEF) share price rose as much as 14 percent on Thursday after the company received federal environmental approval for its Whabouchi lithium project in Quebec.
Canada’s minister of environment issued a positive environmental assessment decision for the project on Wednesday, stating that Whabouchi is not likely to cause significant adverse environmental affects.
Roughly 762,700 shares of Nemaska traded hands on Wednesday, just under eight times the daily average for the company. Nemaska closed at $0.19 per share, up 8.5 percent from the previous day’s close.
The decision appears to have come slightly sooner than expected. “We were expecting the permit, but we were actually expecting it to be a bit later in the summer, more towards the end of August,” stated Nemaska’s president and CEO, Guy Bourassa. He confirmed that the conditions outlined in the decision are “perfectly reasonable and as expected,” as the company received a draft of the conditions on May 6 and was able to comment on them last month.
“[The conditions] have largely already been incorporated in our environmental assessment statement and in all our documentation issued over the last two years,” he explained.
Social responsibility
“The positive decision issued by the Canadian Minister of Environment, following comprehensive social and environmental review, reflects our commitment to build an environmentally and socially responsible mine site,” stated Simon Thibault, director of environmental and social responsibility for Nemaska, in Thursday’s release. “The Crees and Jamesians have backed our project since its inception and we are delighted to see the Federal Government has approved our Project after careful consideration of community input.”
Bourassa echoed that sentiment. “Building an environmental and socially responsible mine is very important to Nemaska and is our commitment to the impacted communities,” he said. “The Cree are an extremely important stakeholder and shareholder group, and their support is critical to the success of this mining project.”
Furthermore, Nemaska is doing all it can to make Whabouchi as green as possible, using recycled water and fewer reagents in its chemical processes, as well as recycled water and hydroelectricty to run the mine. For Bourassa, that strategy is simply good business.
“Good community relations are also critical to ongoing project success,” he said. “Consider Bolivia, Argentina and Chile, where tension between government and miners as well as other groups makes the long-term viability of the brine projects questionable.” While lithium can be produced from hard-rock spodumene mines, such as Whabouchi and the massive Greenbushes mine in Australia, a large amount of the world’s lithium production comes from lithium brine operations, mainly located in South America.
Project funding
Going forward, the company still needs to raise about $500 million to build the 3,000-tonne-per-day Whabouchi mine, concentrator and hydromet plant. The plant will be used to produce high-purity lithium hydroxide and lithium carbonate, using the company’s proprietary process to produce lithium hydroxide directly from spodumene concentrate.
Bourassa stated that Nemaska expects to see some funding support from the Quebec government’s Plan Nord program.
“This program was formed to, among other things, support the development of natural resources in Northern Quebec (north of the 49th parallel). A special $1-billion fund was created to take direct equity positions in companies developing projects in Quebec’s north,” Bourassa said. “Nemaska Lithium’s project is located in this territory and that is a definite positive in project financing discussions. We obviously have also initiated discussions with end users to be part of the financing structure for this project. Receiving the environmental permits will definitively help in the actual discussions.”
The company is still waiting on a certificate of authorization for Whabouchi from the Quebec government, which it expects to receive by the end of next month.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Nemaska Lithium is a client of the Investing News Network. This article is not paid for content.
