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Tight Lithium Supply Is a Boon for Nevada’s Clayton Valley Lithium Miners

2021.08.21
It’s no secret by now that the world will need more lithium for our clean energy endeavors.
Industry analysts everywhere are forecasting drastic…

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This article was originally published by A Head of the Herd

It’s no secret by now that the world will need more lithium for our clean energy endeavors.

Industry analysts everywhere are forecasting drastic increases in demand for this key EV battery ingredient over the next decade and beyond.

Fitch Solutions is predicting global EV sales to reach over 4.6 million units this year, about 50% more than 2020, even surpassing the previous year’s growth rate of 36.8%.

Recent study by BloombergNEF shows that 5.3 times more lithium will be in demand by 2030 compared to current year levels (see below).

In its H1 Battery Metals Outlook, BNEF forecasts total battery demand for 2030 has risen 35% over the past year, owing to expected higher sales of passenger electric vehicles.

The surge in demand has also pushed lithium prices to levels last seen in 2018. According to a recent article in The Northern Miner, lithium carbonate and hydroxide prices have climbed by 71% and 91%, respectively, this year.

The performance of lithium prices has also lifted the spirits of lithium miners, as well as their outlook.

After blowing their last year’s H1 earnings out of the water, Chile’s SQM stated in its results call that “global demand for lithium is accelerating at a faster clip than previously thought.”

With electric-vehicle demand surging more than 150% in the first half from a year ago, price growth is exceeding expectations, the world’s second-largest producer told Bloomberg this week, adding that it expects global demand for lithium to increase more than 40% this year.

“We now believe that total global demand could surpass 1 million tonnes in 2025,” the company predicted.

Facing such an enormous rate of demand growth, the industry’s ability to secure more supply should be in question.

In a recent report by Fastmarkets surveying market participants in the battery supply chain, a majority of the respondents flagged lithium as the metal that is the most difficult to secure in the near term.

“The supply of lithium is tight at the moment, as the expansions in South America have taken longer to come on stream,” Will Adams, the head of Fastmarkets’ battery raw materials research team, said.

“And even though this new capacity will shortly be ramped up, it will still take six to eighteen months for the material to be qualified.”

The global lithium market is estimated to reach a deficit of 12,000 tonnes of lithium carbonate in 2022, compared with a surplus of 3,000 tonnes in 2021, according to Fastmarkets’ estimation.

The industry may eventually turn its attention to the US, where President Joe Biden has set an ambitious target to make half of new vehicles sold in 2030 zero-emissions vehicles.

The nation is also scheming to expand its domestic lithium sources, having listed the battery metal as a critical mineral back in 2018, to lessen its reliance on foreign production.

Nevada – Next Lithium District?

While mainly known for its rich bounty of precious metals, the US state of Nevada — specifically the Clayton Valley region — may be on its way to becoming the next frontier for lithium mining.

It is home to the only lithium-producing operation found in all of North America: Albemarle’s Silver Peak mine, which has been in continuous operation since 1966.

Aside from its favorable geology for lithium brine, Nevada’s access to public land, streamlined permitting and supportive State government are the most important factors that are attracting mining companies.

Cypress Development Corp.

Within the same geographical area, a company that is committed to developing America’s next lithium supply is Cypress Development Corp. (TSXV: CYP) (OTCQB: CYDVF) (Frankfurt: C1Z1), which presently holds 100% interest in a lithium project — also named Clayton Valley — in southwest Nevada.

Cypress’ Clayton Valley property covers a total area of 5,430 acres and is located immediately east of the Albemarle operation (see maps below).

Clayton Valley Lithium property location map
Lithium projects within the Clayton Valley region

Exploration and development by Cypress have led to the discovery of a world-class resource of lithium-bearing claystone adjacent to the brine field to the east and south of Angel Island, an outcrop of Paleozoic carbonates protruding up through the lakebed sediments.

Lithium mineralization at Clayton Valley occurs within montmorillonite clays throughout the sediments to a depth of at least 150 metres. Metallurgical testing indicated low-cost processing can be achieved by leaching with low acid consumption (126 kg/t) and high lithium recovery over 85% Li.

These high extractions prove the dominant lithium-bearing minerals present are not hectorite, a refractory clay mineral that requires roasting and/or high acid consumption to liberate the lithium.

The company is currently working towards a feasibility study and permitting of a mine and metallurgical facility for its large deposit of lithium-bearing claystone.

Should everything go according to plan, Cypress believes Clayton Valley would become a viable source of high-purity lithium hydroxide (LiOH) suitable for tier 1 EV battery usage for decades.

Potential Low-Cost Producer

According to Cypress, a key feature of its Clayton Valley project is the large flat-lying nature of the lithium claystone deposit. This allows mining with a low strip ratio (0.29:1) due to minimal overburden and no interbedded waste. Surface mining will require no drilling or blasting in excavation at all.

Metallurgical testing indicates low-cost processing can be achieved by leaching with low acid consumption (126 kg/t) and high lithium recovery over 85%.

In the PFS (2020), it is estimated that Cypress’s Clayton Valley project could produce 27,400 tonnes of lithium carbonate equivalent (LCE) per year on average, at a mining and processing rate of 15,000 tpd of mill feed.

This production figure is based on probable mineral reserves of 213 Mt averaging 1,129 ppm Li (1.28 Mt LCE). Reserves and production plan are derived from an indicated mineral resource of 1,304 Mt averaging 905 ppm Li (6.28 Mt LCE).

Lithium-enriched drill core from Clayton Valley project

The project’s large resource allows the mineral resources and reserves for the PFS to be derived from only a portion of the property (initial pit), showing a mine life of 40-plus years. All resources and reserves are pit-constrained by property and geologic boundaries.

Given the large deposit size and its surface exposure and flat-lying characteristics, Cypress believes its Clayton Valley property has the potential to become a sustainable low-cost producer of lithium for the long run.

“These positive results take us closer to our goal of developing a world-class lithium deposit. Cypress’s land position and resources afford us the opportunity for a long-life project with low operating costs and potential to be a significant source of lithium for the United States,” Cypress CEO Dr. Bill Willoughby commented.

Pilot Plant Close to Completion

The PFS study supported further work on the lithium deposit, with the recommendation to conduct a pilot plant study to advance the project towards Feasibility Study (FS) and permitting.

Development of the lithium extraction plant began in March 2021 at a metallurgical facility south of Beatty, Nevada. The extraction facility is operated by del Sol Refining Inc., which is permitted under state laws for chemicals use with permits in place with the US Environmental Protection Agency (EPA).

The purpose of the program is to ensure all the processes work together as a single unit, and to identify and resolve any scale-up or potential operational issues, in accordance with the recommendations outlined in the PFS.

The initial operation of the pilot plant will focus on chloride-based leaching to confirm the results of the company’s scoping study on lithium extraction.

The pilot plant is planned to operate at a rate of one tonne/day and will be designed for correct interaction and testing of the major components within the extraction process and assessment of the resulting lithium products.

According to Cypress, the program would provide essential data for a planned feasibility study and enable the company to produce marketing samples to support negotiations with potential offtake and strategic partners.

Late July, the company announced that assembly of the pilot plant is nearing completion; all major components are on site including the Chemionex portion of the process.

Meanwhile, claystone samples have already been collected and are currently undergoing preparation and analysis at Cypress’ Tonopah, Nevada, site prior to its shipment to the pilot plant in Amargosa Valley.

Cypress is planning to commission the pilot plant in August.

Conclusion

Concerns over the global supply of lithium have increased since early this year in response to the booming EV market, and projects like Cypress’ world-class claystone deposit will be vital in restoring the market balance.

Ever since acquiring the lithium claims back in early 2016, Cypress has made tremendous progress in bringing the Clayton Valley project closer and closer to production, with sampling and drilling leading to a positive PFS.

As shown in the study, a potential 40-plus-year operation that is capable of producing 27,400 tonnes of LCE at an industry-low cash cost of $3,400 per tonne could be a game-changer.

Right now, there are only a handful of sedimentary-hosted lithium projects in the world that are comparable in terms of size and cost-efficiency.

Add to the fact the world’s biggest lithium producer, Albemarle, is situated right next door, always ready to grow its portfolio and output, Cypress and its low-cost operation could even make a compelling target for the top miner.

Cypress Development Corp.
TSXV:CYP, OTCQB:CYDVF, Frankfurt:C1Z1
Cdn$1.38, 2021.08.19
Shares Outstanding 120.65m
Market cap Cdn$166.5m
CYP website

Richard (Rick) Mills
aheadoftheherd.com
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Articles

Aldoro Resources covering all bases with rubidium, lithium, nickel, copper, gold and more in rock chip samples

Special Report: Aldoro Resources is covering all bases across its diverse prospects in WA, posting high-grade rock chip assays for … Read More
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Aldoro Resources is covering all bases across its diverse prospects in WA, posting high-grade rock chip assays for a suite of metals including gold, copper, nickel, lithium and rubidium.

Junior explorer Aldoro (ASX:ARN), is using grassroots exploration techniques to improve the surface geochemical knowledge of its tenements across the Wyemandoo pegmatite, Narndee Igneous Complex, and Quandong Well target, collecting 20 rock chip samples.

Evidence of mineralisation across pegmatite, magmatic nickel-copper gossan and VMHS gold-copper targets was uncovered at all three targets.

Samples from the Wyemandoo pegmatite returned top grades of 0.80% rubidium and 0.81% lithium.

A high-grade rubidium-lithium lepidolite pegmatite sample from Wyemandoo. Pic: Aldoro Resources

The results are exciting after Aldoro recently identified world-class rubidium potential of its nearby Niobe project, and warrant drilling investigation.

At Narndee, top results from samples included up to 0.37% nickel, 0.15% copper, 0.09% cobalt, 27ppb palladium and 22ppb gold.

That included two samples taken from gossans within a couple of kilometres of the VC1 target, where Aldoro struck magmatic sulphides in the first drilling undertaken at Narndee in a decade.

Aldoro Resources
Gossan 2, exposed in a historical exploration pit 1000m SSW of the significant VC1 drill hole. Pic: Aldoro Resources

Meanwhile, sampling at Quandong Well returned best results of 1.93g/t gold and 0.45% copper.

BHP subsidiary Dampier Mining explored Quandong Well in the 1970s, drilling 31 holes for 1731m that are yet to be compiled and validated by Aldoro.

The old timers reported significant copper, zinc, and gold results in oxide phases close to the surface, grading into a sulphide assemblage of pyrrhotite and chalcopyrite at depth.

Next steps

The rock sampling program was an important step for Aldoro, which noted the surface geochemical dataset is inadequate over most of its tenement package.

Initial results have enabled the company to develop an industry-standard database as a launchpad to future exploration success at Wyemandoo, Narndee and Quandong Well.

Aldoro plans to complete systematic rock chip and soils sampling programs and detailed mapping over the Wyemandoo pegmatite swarm.

This will identify the most prospective zones for drill targeting and locate pegmatite strike extensions and occurrences under soil cover.

The company said field reconnaissance and field mapping will continue to locate and assess all prospective areas of the tenement package for LCT pegmatites, nickel gossans, and copper-gold gossans.

 


 

 

This article was developed in collaboration with Aldoro Resources, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Aldoro Resources covering all bases with rubidium, lithium, nickel, copper, gold and more in rock chip samples appeared first on Stockhead.

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Cannindah up 21pc on gigantic copper hit

Special Report: First assays from an ongoing drilling program at the historic Mt Cannindah copper-gold-silver project in central Queensland are … Read…

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First assays from an ongoing drilling program at the historic Mt Cannindah copper-gold-silver project in central Queensland are in – and they look very good.

The recent increase in copper prices has underlined the significant value of Cannindah Resources’ (ASX:CAE) brownfields ‘Mt Cannindah’ copper-gold-silver project, which boasts an existing JORC resource of 5.5 million tonnes @ 0.93% copper and significant exploration upside.

The company is currently undertaking a 1,450m drilling program to explore both new and existing areas.

Mt Cannindah project: location of identified resources & known targets.

 

Success has come quickly, with the top portion of hole two hitting 117m at 1.01% copper, 0.39g/t gold and 28g/t silver from 34m to 151m.

Assays are pending for the subsequent 180m interval from 150m to 330m. This bottom portion “contains visual primary copper mineralisation, many metres of which looks similar in tenor to the 34m-151m interval”, the company says.

Coming next – hole 3 (21CAEDD003) — completed for 762.2m vs the planned 250m — has also encountered significant copper, the company says. The exciting visuals of the core has driven the significant increase in meterage.

The hole was drilled to the drill rig’s capacity and ended in copper-rich sulphidic breccia.

It is now the deepest hole drilled within the Mt Cannindah mine area, the company says.

“Copper assays are awaited, [but] preliminary tests from visual estimates of chalcopyrite, and PXRF analyses of sludge samples to date, all indicate significant copper values should be returned over large sections of at least the first 500m or so of hole 21CAEDD003,” Cannindah says.

Results received to date underpin potential extension of the current 5.5Mt JORC resource, with the supergene zones offering further grade upside upon incorporation.

“Although assays are needed to confirm the significance of the discovery, CAE are highly encouraged that this strategy has been successful and a major extension to the known Cu-Au-Ag resources at Mt Cannindah mine will likely follow from the drilling of hole 21CAEDD003,” the company says.

“This goal has eluded the major mining houses that have previously explored Mt Cannindah.”

New diamond drilling is yet to occur on other targets such as Cannindah East, where the explorer is also expecting encouraging results. Cannindah East has a non JORC gold resource of 245,000t grading 2.8g/t.

The $77m market cap stock is up 383% year-to-date.

 

Cannindah Resources share price today:


This article was developed in collaboration with Fresh Equities, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 

The post Cannindah up 21pc on gigantic copper hit appeared first on Stockhead.

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Devil in the detail for HWK gold explorer spinoff Diablo

It is unusual for an exploration company to come along with assets as advanced as those with which Hawkstone Mining … Read More
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It is unusual for an exploration company to come along with assets as advanced as those with which Hawkstone Mining spin-off Diablo Resources plans to list.

Diablo (to be ASX:DBO) will join the ASX boards in the coming weeks with a suite of three highly prospective US-based gold and copper projects – all of which are drill ready and proximate to projects of significance in their region.

The projects were formerly on the Hawkstone books, but that company has turned its full focus to lithium in Arizona (it’s literally on the cusp of changing its name to Arizona Lithium), leaving the highly prospective suite of assets to be spun into Diablo.

“I think our shareholders understand that the Big Sandy lithium project is such a large project, with lithium in Arizona ideally located, and it’s a big potential resource,” Hawkstone MD Paul Lloyd, who will also become Diablo chairman, told Stockhead.

“When we brought these gold projects into Hawkstone they were dwarfed by Big Sandy, and therefore we don’t think they ever got the market valuation that was warranted.

“We’ve done a lot of work on the projects to get them to the point where they are drlll-ready, and we think they’ll create a lot more value for shareholders in a separate entity.”

Diablo’s assets include the Devil’s Canyon gold project on the world-famous Carlin Trend in Nevada, the Western Desert gold-copper project 50km west of the Long Canyon gold mine in Utah, and the Lone Pine historical high-grade gold project 8km east of the 3-million-ounce Beartrack mine currently being explored by TSX-listed Revival Gold in Idaho.

Diablo’s exploration projects. Pic: Supplied.

Spicy project trio

Diablo’s name suggests heat, and the early signs suggest there’s plenty in the ground at each of its exploration projects.

At Devil’s Canyon, rock samples have returned astounding assays as high as 191.5 grams per tonne gold, 524g/t silver and 16.05% copper.

Samples from Western Desert have come in at 6.9g/t gold, 1495g/t silver and 5.09% copper, while historic drilling at Lone Pine returned assays including 1.2m at 17g/t gold and 1.9m at 12.9g/t gold with mineralisation open in all directions.

Lloyd isn’t planning on wasting any time in getting Diablo’s exploration efforts going, expecting to have approvals in place for drilling on at least one of the projects around the time of listing.

“It’s more than likely we’ll be able to commence drilling at Western Desert in Utah, which is very close to Long Canyon and a project where we’ve recorded some terrific surface numbers,” he said.

“The gravity of the work we’ve already done there to date and the other technical work we’ve completed really gives us a lot of upside and there’s potential for great early-stage results from drilling.”

Diablo
Priority targets at Western Desert. A1 and A3 rated as priority. Pic: Supplied.

Located in the prolific Carlin Trend, where almost 200 million ounces of gold have been produced over the years, Devil’s Canyon is likely to be the Diablo flagship.

Lloyd said he had long aspired to working with a project in the region, and will have the chance to do so with Diablo.

“There’s been some really impressive rock chip samples come out of there already, and it sits only 20km west of Kinross Gold Corporation’s in-production Bald Mountain mine,” he said.

“Devil’s Canyon has similar geology to that deposit. We’d love to get in there and have four or five holes completed before the weather changes.

“In this area, you’re hunting for elephants, and those rock chip samples give us an indication that there’s something serious there. We’re really looking forward to drilling it.”

Diablo
Devil’s Canyon is over the border from Western Desert in Nevada. Pic: Supplied.

Minimal modern-day exploration has been carried out at Lone Pine, where 18 shallow holes were drilled in the 1990s at the King Solomon prospect.

The project includes a high-grade zone mined prior to 1907, where maiden drilling in 2020 returned significant high-grade results.

Drone magnetics are planned for Lone Pine in Q3 2021.

Diablo
The Lone Pine project in Idaho. Pic: supplied.

Experience on the ground

Floated by the same team behind the IPOs of BPM Minerals (ASX:BPM) and Pantera Minerals (ASX:PFE), there are some familiar names at management level for Diablo.

Experienced gold geologist Lyle Thorne, who was previously exploration manager for NTM Gold prior to its Dacian merger, will join as CEO, while Barnaby Egerton-Warburton and Greg Smith will serve as non-executive directors.

On the ground, the company is drawing on expertise of Harrison Land Services – a Utah based consulting firm which has proved itself to have significant knowledge of the western US.

“These projects, being in Utah, Idaho and Nevada, are all fairly close to their base at Moab,” Lloyd said.

“The team is headed up by Gavin Harrison, who has more than 20 years’ experience with rigs and staking ground, and who helped us acquire these projects to begin with. He’s invaluable.”

When it lists, Diablo will do so with 74.5 million shares on issue and a market capitalisation of $14.9 million, with $6.5 million cash on listing before costs.

“I expect we’ll look really good in the first six months because we’ll have such great newsflow,” Lloyd said.

“Any exploration success should effect the share price significantly.”

Diablo is expected to list on the ASX on October 12, 2021.

At Stockhead, we tell it like it is. While Hawkstone is a Stockhead advertiser, it did not sponsor this article.

The post Devil in the detail for HWK gold explorer spinoff Diablo appeared first on Stockhead.

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