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Lundin Mining Hits 2021 Production Guidance With 262,884 Copper Tonnes

Lundin Mining Corporation (TSX: LUN) announced that it has met the 2021 annual production guidance for all its metals. The
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This article was originally published by The Deep Dive

Lundin Mining Corporation (TSX: LUN) announced that it has met the 2021 annual production guidance for all its metals. The firm produced 262,884 copper tonnes for the year, hitting above the midpoint of its guidance of 255,000 – 267,000 tonnes.

The company also produced 143,797 zinc tonnes, 167,000 gold ounces, and 18,353 nickel tonnes for the year. All these met their respective annual production guidances: 140,000 – 146,000 zinc tonnes, 158,000 – 166,000 gold ounces, and 18,000 – 20,000 nickel tonnes.

The firm plans to release its Q4 and full-year 2021 financial results on February 17, 2022.

The mining company announced in December 2021 that it plans to acquire Josemaria Resources (TSX: JOSE) for $625 million. As a result, Haywood Capital Markets reiterated their $12.00 12-month price target for the firm.

Lundin Mining last traded at $10.86 on the TSX.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Lundin Mining Hits 2021 Production Guidance With 262,884 Copper Tonnes appeared first on the deep dive.





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Author: ER Velasco

Energy & Critical Metals

A Record Year Looms for Lithium – Can the Supply Crunch Derail the EV Boom?

2022.01.20
Electrification and decarbonization are anticipated to be one of the biggest investment trends of 2022.
Just two weeks into the new year, we’re…

A record year looms for lithium, underlining a global supply crunch that could derail the EV boom

2022.01.20

Electrification and decarbonization are anticipated to be one of the biggest investment trends of 2022.

Just two weeks into the new year, we’re already witnessing a big rally in EV battery minerals, perhaps a precursor to what could be a historic year for metals considered vital to the energy transition.

Nickel prices last week surged to its highest in a decade, with investors betting on a global scramble for supplies of the EV battery material.

Another key battery mineral that has seen its prices soar is lithium, which started 2022 on a record high, continuing its strong form from last year. Data from S&P Global Platts last week showed that lithium carbonate prices in China have now risen 35% on month and are up 531% on the year.

And this uptrend in lithium (and other EV battery metals) is only going to continue, according to those within the battery metals industry.

Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, the world’s leading lithium price reporting agency and EV supply chain data provider, notes that the early transactions from 2022 suggest that “lots of legs” are left in this rally.

Gavin Montgomery, research director for battery raw materials at Wood Mackenzie, recently said in a Financial Times article that lithium prices are unlikely to crash, as they did in previous cycles.

“We’re entering a sort of new era in terms of lithium pricing over the next few years because the growth will be so strong,” he added.

According to a December report from S&P Global, further demand growth in 2022 will mean a lithium deficit this year as use of the material outstrips production and depletes stockpiles.

Supply is forecast to jump to 636,000 tonnes of lithium carbonate equivalent in 2022, up from an estimated 497,000 in 2021 — but demand will jump even higher to 641,000 tonnes, from an estimated 504,000, the report said.

Lithium Supply Problem

Driving the latest lithium rally are near-term risks that are threatening deeper shortages in the metal’s supply, from plant maintenance and Winter Olympics curbs in China to pandemic-related labor shortages in Australia.

“The lithium market is extremely tight at present, so spot prices are very sensitive to any supply disruptions,“ Alice Yu, analyst at S&P Global Market Intelligence, recently wrote in a note to Bloomberg.

As we speak, lithium prices are still rising in China as consumers look to restock ahead of the Chinese New Year festivities at the end of the month and early February. The high level of buying in the world’s biggest EV economy also pushed prices higher in other regions such as Europe and the US, according to Fastmarkets.

Beyond the short-term issues, there are challenges for lithium supply to expand fast enough to avoid a prolonged market squeeze over the coming years.

Skeptics point to Rio Tinto’s controversial lithium project in Serbia, which is now on hold due to environmental protests, and the growing concerns around the sustainability credentials of South America’s brine-based production, as long-term threats to global supply.

“Customers are realizing that new supplies are very difficult to bring on,” said Tony Ottaviano, CEO at Australian lithium miner Liontown Resources, in the Bloomberg report. His company recently signed an agreement to ship lithium to South Korean battery giant LG Energy Solution from 2024, when its project is scheduled to start.

Last week, BlackRock’s Evy Hambro, global head of thematic and sector-based investing, told Bloomberg TV that commodity prices may stay high for decades as mining companies struggle to keep up with demand from the energy transition.

“We’ve got decades worth of high rates of investment into infrastructure as the world seeks to decarbonize. That’s a widely held consensual view,” he said.

Among the key raw materials listed was lithium, which is set to face fresh demand from the creation of a “greener world”.  Bloomberg New Energy Finance (NEF) estimates that, by 2030, consumption of lithium (and nickel) will be at least five times current levels.

Hambro still sees the mining sector as remaining undervalued, given its importance in providing the materials like lithium needed to decarbonize the global economy.

“It seems as though this core element of the transition has been completely ignored by many investors,” he said. “At some point people will realize how essential these businesses are for the transition and capital will flow into them, and that should change the valuations.”

More Expensive EVs

The tightening supply of metals is happening just as EV uptake around the world is about to explode, which is exerting serious cost pressure on battery production.

In fact, we could see the first rise in battery prices since 2010 this year, potentially undermining global efforts to speed up the adoption of EVs and clean energy technologies, analysts say.

Between 2010-2021, battery pack prices had dropped a staggering 89%, from above $1,200/kWh to $132/kWh in real terms, BloombergNEF’s annual battery price survey showed in November.

Li-ion battery prices dropped by 6% from $140/kWh in 2020 to $132/kWh in 2021, but could now rise to $135/kWh in 2022 in nominal terms due to higher raw material prices, BloombergNEF estimated.

According to the research provider, even low-cost chemistries like lithium iron phosphate (LFP), which have been used more in 2021 and are particularly exposed to lithium carbonate prices, have felt rising costs throughout the supply chain in recent months.

Since September, Chinese producers have raised LFP prices by between 10-20%, according to BloombergNEF estimates. Indeed, the average price of these cells is now the same as the average price of high-performing nickel-based cells in the first half, at around $100/kWh.

If other technology improvements cannot mitigate the higher cost of raw materials, the point of breaking below the critical threshold of $100/kWh battery pack price could be pushed back by two years from BloombergNEF’s current expectation of 2024.

“This would impact EV affordability or manufacturers’ margins and could hurt the economics of energy storage projects,” the research provider warned.

“Higher battery price creates a tough environment for automakers, particularly those in Europe, which have to increase EV sales in order to meet average fleet emissions standards,” said James Frith, BNEF’s head of energy storage research and lead author of the report.

Automakers may now have to make a choice between reducing their margins or passing costs onto consumers. Either way, some carmakers are likely to lose out in the global race to produce affordable EVs after failing to meet their ambitious targets.

In the grand scheme of things, the clean energy transition could be costlier and more distant than initially thought. Fatih Birol, executive director of the International Energy Agency (IEA), said last year:

“Today, the data shows a looming mismatch between the world’s strengthened climate ambitions and the availability of critical minerals that are essential to realizing those ambitions.”

US Falling Behind

The United States still lags behind both China and Europe when it comes to the production and domestic uptake of EVs, and the world’s biggest economy has made it loud and clear it wants to challenge its rivals’ dominance.

In an executive order, US President Joe Biden has already set a national goal for 50% of new car sales by 2030 to be electric. Jumpstarting his EV initiative is a proposed $7.5 billion spending package to build a network of 500,000 EV charging stations across the country.

Meanwhile, its EV industry is also making more noise than ever. Nearly every major automaker in the US has announced a transition to electric vehicles; Tesla delivered almost one million cars in 2021, while new electric vehicle companies like Rivian and Lucid are rolling out new models off the line.

However, to power these new EVs requires more batteries — and the materials to build them.

According to Benchmark Mineral Intelligence, EV growth will be responsible for more than 90% of demand for lithium by 2030. The UK-based consultancy forecasts that demand for lithium is set to triple by 2025, rising to 1 million tonnes and outpacing supply by 200,000 tonnes.

Another market analysis by CRU Group estimated a lithium demand of about 450,000 tonnes in 2021, exceeding the previous year’s supply by around 10,000 tonnes.

So for the US to really become an EV powerhouse, it needs to first solve its lithium supply problem.

Over 80% of the world’s raw lithium is currently mined in Australia, Chile and China. Moreover, China controls more than half of the world’s lithium processing and refining, and has three-fourths of the lithium-ion battery megafactories in the world, according to the IEA.

The US, meanwhile, mines and processes only 1% of the world’s lithium, according to the US Geological Survey (USGS). There is only one lithium mine in operation, Albemarle’s Silver Peak, which extracts lithium from brine outside of Tonopah, Nevada, outputting a paltry 5,000 tonnes of lithium carbonate a year.

However, this is not to say we can rule out the US as a major producer of lithium, dubbed “white gold” for its vital role in rechargeable batteries and high demand.

Next Lithium Hub?

The US had been the leading producer of the metal until the 1990s, so scarcity is not a problem.

Within its borders are almost 8 million tonnes of lithium in reserve, ranking it among the top five countries in the world, according to the USGS.

So, with the right amount of investment, a burgeoning domestic “mine to battery to EV” supply chain is certainly within reach. Several projects are already in the works across the states of Nevada, North Carolina, California and Arkansas.

Nevada looks to be the focal point of the next “white gold rush” given the abundance of lithium-rich brines and clays, plus its history of lithium production dating back to the 1960s. It currently hosts the only US lithium mine, for now.

A new large-scale lithium mine is being developed at the Thacker Pass project in Humboldt County, held by Vancouver-based Lithium Americas. This project was approved by the US Bureau of Land Management in January of last year.

Thacker Pass is considered the largest known lithium resource in the country, and the open-pit mine could produce as much as 60,000 tonnes of lithium carbonate annually.

Another Nevada project that could begin as soon as 2024 is the Rhyolite Ridge lithium-boron project, with an estimated annual production of over 22,000 tonnes Li₂CO₃ in its first three years.

Tesla’s $5 billion Gigafactory, the world’s biggest EV battery plant by volume, is also conveniently located in Nevada, with Elon Musk’s company even looking to mine lithium near its site.

Hence, it feels almost inevitable that the state mostly known for its gold and silver could someday become a hotbed for lithium mining.

Smokey Lithium

Leveraging Nevada’s favorable geology and rich mining history, several companies have begun exploring its claystones and brines over recent years, with the goal of developing the next US lithium source for the EV battery supply chain.

Among the lithium explorers in Nevada, we are particularly intrigued by Victory Resources Corporation (CSE: VR) (FWB: VR61) (OTC: VRCFF), which is anticipating further advancement on its Smokey lithium project in the near term to benefit from the EV revolution.

Victory’s Smokey lithium project is located about 35 km west of Tonopah, Nevada, within the famous Big Smokey Valley that traverses three counties across the state.

Esmeralda County — where the project is situated — is one of the world’s most prolific regions for lithium clay deposits (Noram, Cypress, American Lithium, Spearmint, Enertopia, Jindalee). These deposits all have proven large tonnages with acceptable lithium grades in excess of 900 ppm.

The Smokey lithium property lies approximately 35 km north of Clayton Valley, adjacent to and possibly on trend with the Clayton North project (930 ppm Li) held by Australia’s Jindalee Resources Ltd.

Farther away, Noram’s Zeus lithium project (900 ppm Li) is about 25 km to the southeast, while 35 km to the northeast is American Lithium’s flagship Tonopah Lithium Claims property (1,000 ppm Li).

Smokey clay lithium project and other properties in the region

In this prolific lithium region hosting, Victory’s Smokey project covers a total of 350 claims covering 7,000 acres of land with excellent access and relatively flat ground.

The property shares similar geologic settings to the Clayton Valley and the many exploration projects nearby. It is located in the Walker Lane trans tensional corridor on the western margin of the Basin and Range province.

The property’s geology consists of Miocene – Pliocene tuff deposits, claystones and siliciclastic beds (Esmeralda Formation) with overlying younger alluvium deposits and desert pavement formation. The claystone, which can carry high lithium concentrations, is observed as highly weathered light grey to tan mounds of unconsolidated clay from 0.10-1.50m thick.

The flat-lying nature of the claystones, together with the frequent occurrence of transported cover, requires drilling to fully validate and assess the Smokey project’s lithium potential as indicated by last summer’s surface sampling, which returned values up to 630 ppm Li.

Based on extensive exploration work and analysis conducted to date, Victory’s exploration team has identified several drill targets that will determine whether a relationship exists to the high lithium zone on the adjacent Jindalee property.

Drilling is set to begin soon after the company received its permit in December. The drill permit was originally applied for 4 holes, but was later expanded to 15 holes upon further analysis by the exploration team.

Conclusion

Victory’s impending drilling of the Smokey project comes just as lithium is in the midst of another record-setting rally.

Lithium prices have already set new records to begin the year; China’s lithium carbonate prices jumped to over $47,500 last week, representing a six-fold increase over January 2021.

The BMI lithium index has already shot up by 280% year-on-year, and nearly 12% over the past month alone.

Some are predicting that this run is far from done. Australian lithium miner Allkem told Reuters this week that lithium carbonate prices could explode in the second half of the year, rising by about 80% to over $20,000/tonne in the six months to December.

“It’s a very, very tight supply market and as a result of this we’re seeing this very rapid increase in pricing,” the company representative said.

Strong demand for lithium-ion batteries for EVs and other applications is expected to put a strain on the global supply of battery raw materials, which will likely invoke a string of new investments.

China’s biggest battery makers and miners are already gobbling up lithium assets left, center and right, with more deals still left to be done. Without a doubt, lithium’s “white gold” label is merited.

With the global race to secure minerals in full throttle, there will be calls made to companies holding lithium projects within the most prolific regions of the world.

In the Clayton Valley of Nevada, best known for its affluence of lithium clay deposits, Victory is gearing up for drilling at its highly prospective Smokey lithium property, and just one discovery hole from that could be a game-changer for the company.

Seeing that many others have previously found success in this area, we expect Victory to deliver more exciting news in 2022.

Victory Resources Corp.
CSE: VR | FWB: VR61 | OTC: VRCFF
Cdn$0.09, 2022.01.18
Shares Outstanding 89.9m
Market cap Cdn$8.1m
VR website

Richard (Rick) Mills
aheadoftheherd.com
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Energy & Critical Metals

United Lithium Intersects 47.7 Metres Of 1.34% Li2O At Bergby

United Lithium (CSE: ULTH) this morning provided details on its ongoing drill program at its Bergby Lithium project in central
The post United Lithium…

United Lithium (CSE: ULTH) this morning provided details on its ongoing drill program at its Bergby Lithium project in central Sweden. The company to date has completed 42 drill holes under the current program.

The latest drilling has resulted in the discovery of new lithium rich pegmatites on the property. Core drilling in late December saw the company intersect 1.34% Li2O over 47.75 metres, from a depth of just 2.25 metres. True thickness is estimated at roughly 10 metres based on nearby drilling.

Further drilling is now planned to test the northeast and southwest extensions of the discovery, with another hole to be extended to test continuity of the spodumene bearing pegmatite. The discovery was made 750 metres northwest of the original lithium discovery made on the property, and was found after boulder sampling. Following this discovery, the company expects to find further pegmatites on the property from similar exploration work.

“We are excited to have achieved two new blind high grade lithium discoveries on the property in less than half a year of drilling. The boulder sampling program has been very successful at vectoring drill targeting for this new zone. The Bergby project remains very unexplored, and we look forward to further testing of this discovery and additional targets in 2022,” commented Michael Dehn on the discovery.

United Lithium last traded at $0.61 on the CSE.


FULL DISCLOSURE: United Lithium is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover United Lithium on The Deep Dive, with The Deep Dive having full editorial control. Additionally, the author personally holds shares of the company. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.

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Author: Jay Lutz

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Energy & Critical Metals

Filo Mining Reports 1,224m of 1.26% CuEq at Filo del Sol

Filo Mining Corp. [FIL-TSXV, NASDAQ First North] has reported assay results from one of the…

Filo Mining Corp. [FIL-TSXV, NASDAQ First North] has reported assay results from one of the best holes drilled so far at the its 100%-owned Filo del Sol project, which straddles the border of Region 111, Chile and San Juan Province, Argentina.

“It confirms the extension of the high-grade breccia intersected last season in Hole 41 and starts to give us an idea of the geometry and extent of this zone,’’ said Filo President and CEO James Beck.

The company said drill hole FSDHO54 returned 1,224 metres of 1.26% copper equivalent (CuEq) from a depth of 146 metres, including 592 metres at 2.04% CuEq, and 171 metres at 3.22% CuEq.

This intersection lies completely outside the current mineral resource and the high-grade zone remains open to the west, east, north and at depth.

Filo Mining is a member of the Lundin Group of companies. The Filo del Sol project is a high-sulphidation epithermal copper-gold-silver deposit associated with one or more large porphyry gold system.

Filo del Sol is located in the Andes Mountains, 140 kilometres southeast of the Chilean city of Copiapo and was recently the subject of a pre-feasibility study that is based on proven and probable reserves of 259.1 million tonnes, grading 0.39% copper, 0.33 g/t gold, 15.1 g/t silver, or 2.2 billion pounds of copper, 2.7 million ounces of gold and 126 million ounces of silver.

The prefeasibility study envisages annual production of approximately 67,000 tonnes of copper (including copper as a precipitate), 159,000 ounces of gold and 8.6 million ounces of silver at a cost of US$1.23 per pound of copper equivalent.

The pre-production capital cost is estimated at $1.27 billion. Over a 14-year mine life (including pre-stripping) the operation is expected to produce almost 1.75 billion pounds of copper as cathode, and 1.92 million ounces of gold and 104 million ounces of silver as dore over a 13-year leach feed schedule.

The company has said it is convinced that Filo Del Sol will turn out to be one of the most important copper-gold-silver discoveries in recent years.

FSDHO54 was collared 60 metres to the east of, and parallel to, FSDH041, which returned 163 metres at 5.43% CuEq from 780 depth within a broader interval of 858 metres at 1.80% CuEq. FSDH054 was drilled 324 metres past the end of FSDH041, ending in mineralization, with the last 20 metres at 0.50% CuEQ (0.38% copper, 0.28 g/t gold and 1.2 g/t silver), indicating that the deposit is wide open at depth.

Hole FSDH041 was described as the first intersection of a long-sought feeder zone for the high-sulphidation mineralization at Filo

The company said it is currently assessing the technical feasibility of drilling to depths of at least 2.0 kilometres later in the year.

Wide-spaced drilling over the past to years has discovered a higher-grade section of a regional north, north east trending structure that has been mapped from Filo del Sol to the Los Helados copper-gold porphyry deposit located 18 kilometres to the north, northeast.

The higher-grade section of this structure, now called the Aurora Zone, extends along a length of at least 700 metres, and contains at least one elevated grade section, Breccia 41, as indicated by assay results in FSDH054 and FSDHO41.

On January 19, 2022, Filo Mining shares closed at $15.85 and now trade in a 52-week range of $16.02 and $1.75.

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