Connect with us

Articles

Cypress lithium pilot plant up and running

2021.11.12
A 2020 World Bank report entitled ‘The Mineral Intensity of the Clean Energy Transition’,  estimated that production of minerals underpinning…

Published

on

This article was originally published by A Head of the Herd

2021.11.12

A 2020 World Bank report entitled ‘The Mineral Intensity of the Clean Energy Transition’,  estimated that production of minerals underpinning the clean energy shift, such as the battery metals graphite, lithium and cobalt, would have to increase by nearly 500% by 2050 to meet global demand for renewable energy technology.

Cleaning up the planet, and “going green” will not be possible without major reductions in carbon emissions from the two largest economies, the US and China.

President Biden is pushing forward on climate-oriented programs that distance himself from his predecessor and are a nod to the Democratic left that supported his bid for president.

His $1.1 trillion infrastructure spending package, just passed by Congress, is aimed at transitioning the US transportation system to battery-powered vehicles and supporting renewable wind and solar energies over carbon-based sources like coal and natural gas.

Vehicle electrification is a major part of the legislation’s focus. It would provide $7.5B for low-emissions buses and ferries, and aims to deliver thousands of electric school buses to districts across the country. Another $7.5B would go towards building a nationwide network of plug-in EV chargers.

This past August, Biden signed an executive order requiring that half of all US new vehicle sales be electric by 2030.

$65 billion is earmarked for rebuilding the electrical grid including thousands of new miles of power lines and expanding renewable energy, according to the White House.

From an initial social spending/ climate package of $3.5 trillion, panned by Republicans for containing a wish-list of “progressive” priorities, Biden’s Build Back Better legislation is now $1.75 trillion and has as its centerpiece over $550 billion to tackle climate change and the transition to clean energy.

SP Global notes The biggest chunk of the climate and clean energy investment — $320 billion — would provide for 10-year expanded tax credits for “utility-scale and residential clean energy, transmission and storage, clean passenger and commercial vehicles, and clean energy manufacturing,” according to a three-page summary from the White House.

US battery plants burgeoning

In the United States, there are a number of battery plants in the works to join Tesla, whose first gigafactory in Nevada started production of battery cells in 2017. The company has a plant in Buffalo, New York, and plans to open a third (US plant) in Texas by the end of this year. Tesla also has a “pilot line” at its facility in Fremont, California, for R&D technologies. 

In 2020 General Motors announced plans to install its first battery cell factory in Ohio, a project called Ultium Cells launched with its Korean partner LG Chem. The latter opened a plant in Holland, Michigan in 2013.

Another South Korean company, SK Innovation, is planning on opening the first of two battery plants in Georgia early next year; the company is a supplier to Volkswagen and Ford.

The latter along with American auto icon GM have big plans to electrify their fleets. Ford announced plans to boost spending on electrification by more than a third, and aims to have 40% of its global volume electric by 2030, which translates to more than 1.5 million EVs based on last year’s sales.

GM reportedly aspires to halt all sales of gas-powered vehicles by 2035, with plans to invest $27 billion in electric and autonomous vehicles over the next five years.

Source: Batteryindustry.tech

There are currently 11 EV start-ups racing to catch up with market leader Tesla, fueled by money from Wall Street. They include Rivian out of Irvine, California, Lucid Motors based in Newark, CA, Lordstown Motors from Ohio, Nikola Corp (Phoenix), Fisker (Los Angeles), Faraday & Future (Los Angeles), Canoo (Torrance), NIO, Li Auto and XPing from China, and Arrival, based in London.

Lithium M&A

The mining industry was headlined by several major deals involving lithium firms in October.

Rock Tech Lithium plans to locate its first battery metals smelter within a 90-minute drive of Tesla’s gigafactory under construction outside Berlin, in a bet that Germany will take the lead in Europe’s electric vehicle transition.

South Korea’s LG Energy Solution, one of the biggest EV battery makers globally, recently agreed to buy as much as 100,000 tonnes of lithium a year as part of a six-year “take-or-pay” deal with Vancouver-based Sigma Lithium Corp., which controls a hard rock lithium deposit in Brazil.

China’s top battery maker, Contemporary Amperex Technology (CATL), outbid Ganfeng Lithium to acquire Canadian miner Millennial Lithium Corp., which holds lithium assets in Argentina.

As China’s largest lithium compounds producer and the world’s biggest lithium company by market value, Ganfeng has gone on an acquisition spree over the years, having invested in several lithium projects in Argentina (Caucharí-Olaroz, Mariana), Australia and China.

In August, Ganfeng proceeded with a takeover of Mexico-focused lithium developer Bacanora, and in the same month, inked a four-year supply deal with Australia’s Core Lithium for 300,000 tonnes of spodumene concentrate, a partly processed form of the battery material.

China’s Zijin Mining, known for its status as a major gold and copper producer, announced its first foray into the lithium sector with a $770 million purchase of Neo Lithium, outbidding many other Chinese bidders.

Neo Lithium’s main asset is a high-grade brine operation in Argentina, with CATL already being one of its backers.

In total, Bloomberg Intelligence analyst Christopher Perrella estimates five companies essentially control the $4 billion global lithium market, two of which are Chinese.

US lithium dependency

At AOTH we’ve been covering the topic of US critical minerals insecurity in the face of China’s mining and processing dominance, for over a decade. 

In a recent interview with Cris Sheridan of Financial Sense, I discussed the long-term investment case for the three most critical inputs in the race to electrify and decarbonize: lithium, graphite and copper.

China controls most of the world’s lithium processing and makes over 60% of the world’s lithium-ion batteries. The prices of lithium carbonate and hydroxide, both used in the li-ion battery cathode, have soared this year on break-neck demand.

1 year-lithium carbonate price, in Chinese currency. 
Source: Trading Economics

Rio Tinto has said even if they had another 60 Jadar lithium mines, that wouldn’t fill the supply-demand gap, with EV sales expected to hit 55% of total vehicle sales as early as 2030. That represents 65 million units, and 3 million tonnes of lithium in just eight years, compared to the 400,000 tonnes of lithium per year mined currently.

Even if you combine all existing operations with future projects, that’s only 1Mt of future lithium, compared to the 3Mt we need by 2030. With all that is going on in the US — Biden’s clean energy agenda; America now the world’s second largest EV manufacturer behind China; new battery plants being built including Tesla’s second gigafactory in Texas; billions worth of EV investments coming from major carmakers like Ford, GM, VW and Mercedes, battery-makers such as Korea’s SK Innovation; and 11 electric vehicle start-ups such as Rivian — we would expect there to be a lot of lithium needed to satisfy a burgeoning domestic mine to battery to EV supply chain.

In fact there is only one US lithium mine, Albemarle’s Silver Peak in Nevada, outputting a tiny 5,000 tonnes of lithium carbonate per year, according to the US Geological Survey.

The truth, in regards to the world’s mineral resources, is that we in the western developed countries are usually not in control of supply.

Bloomberg NEF shows just over five times more lithium is needed in 2030 compared to current levels. In the absence of new North American lithium supply, this lithium will have to come from China, which as I stated, processes the majority of the world’s lithium and makes nearly two-thirds of all lithium batteries.

It is ridiculous to think that the US can rely on China for delivering a steady and reliable supply of lithium (and other critical minerals it has locked up), given an increasingly belligerent China, in trade, politics and militarily.

“The spectre of resource insecurity has come back with a vengeance. The world is undergoing a period of intensified resource stress, driven in part by the scale and speed of demand growth from emerging economies and a decade of tight commodity markets. Poorly designed and short-sighted policies are also making things worse, not better. Whether or not resources are actually running out, the outlook is one of supply disruptions, volatile prices, accelerated environmental degradation and rising political tensions over resource access.” Chatham House, Resources Futures

There are many serious concerns in regards to global resource extraction that we need to consider:

  • Resource nationalism/Country risk, political instability of supplier
  • A looming skills shortage
  • Competition with Chinese mining investment, smaller areas open for exploration
  • Low hanging fruit – the high quality large deposits have already been found, lower economic attractiveness of new projects, cost inflation
  • Supply bottlenecks for much needed and scarce equipment
  • The manipulation of supplies ie speculation and concentrated ownership of LME stocks
  • Rising capex/opex, lack of financing options, capital project execution
  • Lack of innovation and technological advancements
  • Declining open pit production, ongoing operational issues
  • Lack of recognition for population growth, growing middle class w/disposable incomes and urbanization as on-going demand growth factors
  • Environmental group and labor risks, mining unrest – lack of a social license to operate, incredibly difficult and lengthy permitting processes
  • Climate change, accidents and natural disasters
  • Lack of infrastructure or poor infrastructure access, attacks on supply infrastructure
  • Price and currency volatility
  • Fraud and corruption
  • Access to raw materials at competitive prices has become essential to the functioning of all industrialized economies.

Accessing a sustainable, and secure, supply of raw materials is going to become the number one priority for all countries. Increasingly we are going to see countries ensuring their own industries have first rights of access to internally produced commodities and they will look for such privileged access from other countries.

Numerous countries are taking steps to safeguard their own supply by:

  • Stopping or slowing the export of natural resources
  • Shutting down traditional supply markets
  • Buying companies for their deposits
  • Project finance tied to off take agreements

Cypress Development Corp

Cypress Development Corp. (TSXV:CYP, OTCQB:CYDVF, Frankfurt:C1Z1) has a sizeable lithium deposit in Nevada from which they are trying to produce lithium hydroxide, the preferred lithium product for EV batteries. They see themselves profiting from a lithium market segment that is expected to see high demand and potential shortfalls in coming years, especially in North America as the production of battery cells and electric vehicles ramps up.

Cypress’s Clayton Valley lithium deposit would be mined from neither brine nor hard rock, but claystone. An average production rate of 15,000 tonnes per day to produce 27,400 tonnes LCE annually over a +40-year mine life means the project stacks up extremely well against any of the 10 deposits listed here. The company, in our opinion, is extremely undervalued, having already completed a preliminary economic assessment (PEA) and a prefeasibility study.

Most recently attention has focused on a pilot plant the company is running to test its lithium extraction process.

The pilot plant is located at a metallurgical facility 100 miles south of Beatty, Nevada, owned and operated by del Sol Refining Inc., which is permitted under the State of Nevada for chemicals use with permits in place with the US Environmental Protection Agency (EPA).

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 will 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.

On Thursday the company reported the launch of extraction testing of lithium-bearing claystone, with test work ongoing utilizing chloride-based leaching combined with the Chemionex—Lionex process for Direct Lithium Extraction (DLE).

“The pilot plant is operating as designed. Leaching is now underway on lithium clay,” said Bill Willoughby, Cypress’s President and CEO, in the Nov. 10 news release.

Plant operations are under the direction of Continental Metallurgical Services, Llc., with support from del Sol Refining, Inc., and Chemionix Inc.

The pilot plant has four main sections, with two additional processing steps conducted off-site at NORAM Engineering and Constructors laboratory in Richmond, British Columbia, just outside of Vancouver:

  • The leaching section will work to improve leach conditions and confirm lithium extraction into pregnant leach solution (PLS).
  • The tailings handling section will utilize a counter current decantation arrangement of thickener settlers and flocculant mixing, with the objective of determining materials handling, moisture content and water consumption.
  • The PLS treatment section will remove impurities prior to introduction into the DLE process through two-stage neutralization and filtration; a tertiary stage will follow the DLE process prior to recycling of solution back to leaching.
  • The DLE section consists of Chemionex’s—Lionex DLE technology and will test compatibility of the PLS to be further concentrated with this process. Cypress was granted an option, upon completion of the pilot plant program, to license this process for commercial use at its project.
  • The final two off-site steps will treat the concentrated lithium solution from the DLE portion of the pilot plant to produce lithium hydroxide and test the stripped leach solution for compatibility for recycling to the leaching section of the plant.
Pilot plant photos

Conclusion

Cypress’s pilot plant success has been noticed by the market; CYP’s stock price is more than double what it started the year at, closing on Thursday at $2.34/sh compared to $1.00 on Jan. 4. Cypress belongs to a select group of junior resource companies with quality properties in the United States, that has the potential of becoming a crucial link in the emerging North American mine to electric-vehicle battery supply chain.

We’re looking forward to seeing the results of the pilot plant lithium extraction process as Cypress continues down its development path towards commercial production.

Cypress Development Corp.
TSXV:CYP, OTCQB:CYDVF, Frankfurt:C1Z1
Cdn$2.34, 2021.11.11
Shares Outstanding 126.6m
Market cap Cdn$298.1m
CYP website

Richard (Rick) Mills
aheadoftheherd.com
subscribe to my free newsletter

Legal Notice / Disclaimer

Ahead of the Herd newsletter, aheadoftheherd.com, hereafter known as AOTH.

Please read the entire Disclaimer carefully before you use this website or read the newsletter. If you do not agree to all the AOTH/Richard Mills Disclaimer, do not access/read this website/newsletter/article, or any of its pages. By reading/using this AOTH/Richard Mills website/newsletter/article, and whether you actually read this Disclaimer, you are deemed to have accepted it.

Any AOTH/Richard Mills document is not, and should not be, construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

AOTH/Richard Mills has based this document on information obtained from sources he believes to be reliable, but which has not been independently verified.

AOTH/Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness.

Expressions of opinion are those of AOTH/Richard Mills only and are subject to change without notice.

AOTH/Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

Furthermore, AOTH/Richard Mills assumes no liability for any direct or indirect loss or damage for lost profit, which you may incur as a result of the use and existence of the information provided within this AOTH/Richard Mills Report.

You agree that by reading AOTH/Richard Mills articles, you are acting at your OWN RISK. In no event should AOTH/Richard Mills liable for any direct or indirect trading losses caused by any information contained in AOTH/Richard Mills articles. Information in AOTH/Richard Mills articles is not an offer to sell or a solicitation of an offer to buy any security. AOTH/Richard Mills is not suggesting the transacting of any financial instruments.

Our publications are not a recommendation to buy or sell a security – no information posted on this site is to be considered investment advice or a recommendation to do anything involving finance or money aside from performing your own due diligence and consulting with your personal registered broker/financial advisor.

AOTH/Richard Mills recommends that before investing in any securities, you consult with a professional financial planner or advisor, and that you should conduct a complete and independent investigation before investing in any security after prudent consideration of all pertinent risks.  Ahead of the Herd is not a registered broker, dealer, analyst, or advisor. We hold no investment licenses and may not sell, offer to sell, or offer to buy any security.

Richard owns shares of Cypress Development Corp. (TSXV:CYP)







Author: Gail Mills

Energy & Critical Metals

IPO Watch: Lithium explorer Winsome Resources listed today – here’s how it performed

Two companies IPOd today but the biggest winner was lithium explorer Winsome Resources (ASX:WR1) who listed after raising a tidy … Read More
The post…

Two companies IPOd today but the biggest winner was lithium explorer Winsome Resources (ASX:WR1) who listed after raising a tidy $18 million at $0.20 per share.

The company’s shares were trading at 26 cents per share near close of play –  a healthy 30% above issue price.

Funds from the IPO will accelerate the company’s exploration at its three project areas – Cancet, Adina and Sirmac-Clappierin the James Bay Region of Quebec Province, Canada.

The aim is to establish a maiden resource of high quality spodumene concentrate that is suitable for conversion across multiple battery applications.

Notably, the most advanced project – Cancet – is a shallow, high grade lithium deposit and is strategically located close to established infrastructure and supply chains.

Plus, the company says that Quebec is one of the world’s most supportive, lowest risk mining regions, renowned for its world-class infrastructure and support for mining developments and is at the forefront of the North American push to develop its own EV battery supply chain.

Winsome managing director Chris Evans was previously MD of FireFinch (ASX:FFX) and COO of Altura Mining (ASX:AJM) – so it’s safe to say he knows what he’s talking about when he says it’s an exciting time to be exploring for lithium.

“Current trends show up to 10 times more lithium is required in the next decade to meet the demand and it is going to require a huge investment to get there,” Evans said.

“With more than 99 per cent of the world’s lithium reserves located in Australia, Argentina, Chile and China, our projects offer jurisdictional diversity and opportunity to contribute to the expanding North American battery industry.”


 

Biome Australia (ASX:BIO)

Also listing today was microbiome health company Biome Australia, who licences, develops and markets innovative, evidence-based, complementary medicines, including nutraceuticals (food-based vitamins and weight management products) and live biotherapeutics (probiotics).

The company IPOd at $8 million at $0.20 per share, and its shares were trading at 11 cents per share – a huuuge 41.25% drop below the issue price.

Biome will use the funds to accelerate new product development and commercialisation in the complementary medicines industry – which it says in Australia is estimated to be worth $5.69 billion.

The company currently distributes 22 products through more than 2,300 community pharmacies and a range of health practitioners and health food stores in Australia, New Zealand and the United Kingdom, with some of its products also available online.

“While supporting health professionals to improve patient health outcomes, Biome has doubled its revenue over each of the last two financial years, with annualised sales revenue to October 2021 showing continued growth,” chairman Ilario Faenza said.

It has a clear growth strategy that will be propelled by the IPO proceeds, accelerating commercialisation and product development.”


 

The post IPO Watch: Lithium explorer Winsome Resources listed today – here’s how it performed appeared first on Stockhead.



Author: Emma Davies

Continue Reading

Articles

Lunnon Metals charts path to success in world-class nickel domain after transformative year

Special Report: While the world is on the lookout for nickel sulphide deposits anywhere they can be found, Lunnon Metals … Read More
The post Lunnon…

While the world is on the lookout for nickel sulphide deposits anywhere they can be found, Lunnon Metals chief Ed Ainscough maintains there’s no place like Kambalda.

The mining town 50km south of Kalgoorlie in WA has produced 1.6Mt of the stainless steel and now lithium ion battery ingredient since 1966, when WMC driller Jack Lunnon punched the discovery hole and gave birth to Australia’s first nickel boom.

Since listing in a $15 million IPO in June, Lunnon (ASX:LM8) has continued Kambalda’s rich legacy of delivering high grade nickel.

Lunnon owns the Foster and Jan nickel mines from which WMC produced more than 90,000t of nickel metal from the 1975 to 1994, operations that missed the early 2000s nickel revival that proved the making of ASX success stories Mincor, IGO and Panoramic.

Lunnon already boasts 39,000t in resources at typical Kambalda nickel grades of 3.2% and drilling since its float is already delivering high grade results.

These have confirmed historical results from kilometres of old WMC drill core logged by Lunnon at the Kambalda coreyard and backed the Lunnon team’s conviction in the quality of the Foster and Jan assets.

“One of the benefits at Kambalda is that generally above a 1% cut off if you’re going to mine, it’s going to be in the high 2s or 3s,” Ainscough said.

“And it is very pleasing to not only reproduce the nickel where WMC was hitting it, but to be hitting it at the same level of mineralisation.

“I just think that speaks to the quality of the camp and that particular contact between the Kambalda Komatiite and the Lunnon Basalt.

“It’s a world famous contact, and nearly all the nickel in Kambalda is on or close to that contact, and it’s proven to be the case so far. You’ve got to persevere and be resilient because the rewards are definitely worth the effort.”

Lunnon Metals
Lunnon has hit high grades on the contact of the Kambalda Komatiite and Lunnon Basalt. Pic: Lunnon Metals

An option to play the Kambalda narrative

Kambalda is on the cusp of a revival.

Mincor Resources will open the first new nickel mine in the district since production at the Long mine ceased in 2018, when its Cassini operation starts production in 2022.

That will see BHP’s Nickel West division restart its Kambalda concentrator, just a few clicks from Foster/Jan, for the first time in four years.

Unfortunately for investors there are not a lot of options to play the Kambalda story, with what was a diverse field of ASX companies a few years ago whittled down to just Mincor and Lunnon after Panoramic sold Lanfranchi into private hands in 2018.

That’s where the opportunity lies, Ainscough says.

“Lanfranchi’s private now, so that’s been a big message I’ve been trying to sell – if you want to invest in Kambalda through the ASX it’s Mincor, and it’s a half-a-billion dollar company plus, or little old us at $50 million,” Ainscough said.

The key for Lunnon will be resource growth, which Ainscough said is a major aim in 2022 after its success with the drill bit in recent months.

“It’s a 10 times gap and the encouragement is that’s a big gap, but it’s a gap we feel we can make a big effort to fill next year,” he said.

“That will be filled by drill results and resource growth, but we’ve just got to get the runs on the board…  but what better place to be trying to do that than Kambalda?”

Lunnon Metals
Lunnon has hit high grades on the contact of the Kambalda Komatiite and Lunnon Basalt. Pic: Lunnon Metals

East Cooee resource drilling under way

One of the company’s priority targets outside its Foster and Jan mines is East Cooee, a prospect to the north-northwest of Jan consisting of known hanging wall nickel mineralisation that was underexplored when the mines were in WMC hands.

Since drilling began in July, assays from East Cooee have delivered a string of strong nickel grades, with Lunnon also recording a hit of 2m at 5.07% Ni in its first assays from the East Trough target in September.

Subsequent encouraging results at East Cooee have included 1m at 3.15% Ni, 2m at 2.44% Ni and a best hit of 9m (8.7m true width) at 1.66% Ni from 113m, including 1m at 7.44% Ni.

Contractors Blue Spec are now drilling the hanging wall prospect on infill drilling spacing of less than 40m x 40m to support the delivery of an initial Mineral Resource estimate.

East Cooee is just over 300m from a mothballed open cut gold pit mined by Lunnon’s major shareholder Gold Fields, providing a potential access point into a future underground development.

“That’s been a little bit of the surprise package because it’s so shallow and it’s so close to that existing gold open pit,” Ainscough said. “I hadn’t really considered  that we would have the ability so early to have a second centre on top of the resources in the Foster Mine.

“We’ve gone back there with the RC rig and we’re drilling that out probably better than 40m by 40m.

“It’s so shallow we can drill it pretty quickly, we can get that done before Christmas and then as and when we get the results back next year we should be able to put that into a maiden resource.”

Ainscough said the location of the gold mine relative to the shallow East Cooee mineralisation meant it wasn’t out of the question that study work could begin before underground drilling starts at Foster.

Lunnon Metals
East Cooee could be a second centre for Lunnon. Picture: Lunnon Metals

Warren, historical core also delivers the goods

The other areas where Lunnon is seeing success include the Warren channel, an underexplored nickel deposit which currently hosts 211,000 tonnes at 3.1% Ni for 6400t of nickel metal.

Located 1km to the northwest of Foster itself, Lunnon believes it has the potential to mirror that mine with assays from RC drilling up and down plunge of the known resource delivering impressive results.

They included a best hit of 4m at 3.44% Ni from 163m in the channel position at Warren.

“It was seen as part of Foster underground mine (by WMC),” Ainscough said.

“Where they could they tried to drill it from Foster so the drill angles are pretty horrible.

“So I think next year for us with Warren is the ability to try and demonstrate that channel is a channel in its own right and has the ability to be as long and as prospective as Foster main.

“That’s all about resource growth.”

The analysis of historical WMC core is also paying off for Lunnon, with re-assayed samples from the unmined N75C area at Foster delivering 15.75m at 2.76% nickel at an estimated 10.7m true width.

This compared well to WMC’s result for the same hole (CD 54) of 16.52m (11.2m true width) at 3.05% Ni from 268.22m.

In 2022 a deep drilling program is also planned beneath the historical Jan mine and a government-supported hole at the new Kenilworth target is due to be drilled.

“I think we’ve set the groundwork in the last six months of the year to really have a big year in 2022, hopefully leading into a buoyant nickel market,” Ainscough said.

Lunnon Metals
Owned by gold miner Gold Fields at the time, the Foster and Jan mines were among the only former WMC mines to miss the last nickel boom. Pic: Lunnon Metals

Nickel market on the up

Led by former Donegal Resources boss and now Lunnon non-executive director Ian Junk, Lunnon initially moved into the Foster and Jan projects in a joint venture with Gold Fields back in 2014.

Back then nickel was looking on the up, hovering around the US$20,000/t mark before slipping into a long bear market.

But with excitement around the use of nickel in batteries and electric vehicles and shifting supply-demand dynamics, it recently peaked above US$21,000/t, hitting a seven-year high.

Ainscough said being in Kambalda, Lunnon is seeking to outline high grade resources that are not dependent on booming nickel prices, but believes the broader market is looking positive.

“I think there is a natural rhythm to the nickel price and we’re entering into that next cycle, but the whole electric vehicle story, the energy transition, that’s all just a fantastic macro backdrop to the nickel price,” Ainscough said.

“I try not to pontificate too much about the nickel price.

“My firm belief is that wherever it gets to, being in Kambalda and mining at the grades that Kambalda delivers – I won’t say it doesn’t matter what the nickel price is but I’d certainly rather be mining in Kambalda regardless of the nickel price.

“I think there’s a momentum now to the whole electrification of everything that we’ll just see a new floor develop in the nickel price. Where that is, I don’t know.”

Q&A Time

Lunnon’s 2021 highlights

  • Acquiring 100% of the Kambalda Nickel Project.
  • Fully underwritten, oversubscribed, successful $15M IPO.
  • Drill rigs turning within a month from a standing start.
  • HIT NICKEL – confirming WMC historical data.
  • East Cooee shaping as second centre of mineral resource growth.

“Our goal is to replicate the success of those ASX companies that bought assets from WMC before the last nickel boom. Each one of the above milestones is a key step to demonstrating we are on that trajectory and can offer investors a similar growth story leading into the next nickel cycle.”

Where is the nickel market heading?

“LM8 sees the macro setting for nickel as extremely positive; there are generational shifts under way at country, government, city and corporate levels regarding the push to achieve net zero goals that all tie in with the energy transition away from fossil fuels.

“These are all strongly in favour of nickel being an important, sought after and in demand metal.

“Covid-19 has also highlighted the issue of supply chain sovereignty and having nickel assets in one of the world’s best nickel camps in a Tier 1 country offers the sort of sustainable supply chain that governments and downstream businesses will value highly in the future.”

What is the upside for Lunnon and why will it be a good investment in 2022?

“We tell investors if you want to be exposed to nickel in Kambalda (and why wouldn’t you want to be exposed to one of the world’s most famous nickel camps against the backdrop described above?), you really only have two choices on the ASX.

“Mincor, who have done an amazing job of restarting their operations in Kambalda and Widgie with Nickel West planning to open up the Kambalda Concentrator, and Lunnon Metals.

“We are just starting out on the same growth journey as Mincor. Kambalda has three key advantages: The grade is high (often >3%), Nickel West’s concentrator offers a ‘capital light’” restart solution and the nickel assets themselves are renowned for delivering extensional growth year after year.

“We are expecting a big year in 2022 for all of these reasons.”

 


 

 

This article was developed in collaboration with Lunnon Metals, 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 Lunnon Metals charts path to success in world-class nickel domain after transformative year appeared first on Stockhead.




Author: Special Report

Continue Reading

Articles

Galan Lithium’s PEA returns robust economics for 25-year Candelas Lithium project

Special report: A competitive cash production cost for lithium carbonate of US$4,277/t positions the Candelas project as a low-cost developer … Read…

A competitive cash production cost for lithium carbonate of US$4,277/t positions the Candelas project as a low-cost developer in the lithium industry.

Galan Lithiums’ preliminary economic assessment (PEA) for the Candelas Project in Argentina’s Catamarca Province has returned ‘robust’ economic results, featuring a pre-tax NPV of US$1,225 million and IRR of 29.9% with a four-year payback period.

The study has estimated a production profile of 14,000 tonnes per annum of battery grade lithium carbonate (LCE) product including some technical grade product for the first three years.

This means Galan (ASX:GLN) now has two PEA study level projects with combined long term production potential of 34,000 tpa LCE.

The company believes the outcomes at Candelas can be further optimised and enhanced to refine the project’s potential.

Pic: Supplied

‘Projects among the lowest cost of any future products’

Galan (ASX:GLN) managing director Juan Pablo Vargas de la Vega said: “We remain excited about the potential value add for our shareholders once we enter the lithium market with prices expected to be +US25k/t LCE.

“Our projects would now be among the lowest cost of any future producers in the lithium industry, due to their high grade and low impurity setting, green credentials and a low carbon footprint.

“Galan is excited to be a part of the solution to the global decarbonisation story.”

Optimising next steps

Vega added that the company now has a solid commercial base to move forward with a clean, low-tech, and low energy solution.

“We also believe we have capability to further review and reduce Opex and Capex.

“We have learnt so much more about Candelas on this journey and will continue to apply our findings in optimising our next steps at the pre-feasibility and definitive feasibility studies.

“Importantly, we will also continue to review the possibility to produce lithium chloride concentrate to reduce time to market and capital expenditure at both of our projects.

“As a result, we remain determined to bring our projects to market in the shortest possible time so that we can supply lithium for future lithium battery requirements needed for electric vehicles.”

Preparation of the project’s PEA was managed by Ad Infinitum and Galan’s project manager for the engineering inputs including the recovery method, project layout and infrastructure, capital cost and operating cost estimates and overall economic evaluation.

The other sections of the study were managed by consultants and employees of Galan Lithium Limited.

Market outlook

Galan has assumed a conservative view to long term lithium pricing and as a result, has taken a mid-point between the long-term pricing between the 17th and 18th Editions from Roskill of US$18,594/t.

Roskill expects contract prices for lithium carbonate battery grade and hydroxide to remain near to or above US$25,000/t on a long-term real (inflation adjusted) basis.

After softening in 2019 and 2020, prices on a nominal basis the long-term lithium carbonate battery grade price is projected to rise to around US$30,000-40,000/t .

Strong demand growth for refined lithium products is forecast to be sustained by expanding production, new market entrants and the draw-down of stockpiled material through to 2026, though a fundamental supply deficit is expected to form in the late 2020s.

Significant further investment in expanding production capacity at existing operations, in addition to new projects and secondary lithium sources will be necessary to meet projected demand growth through to 2030.

 


 

 

This article was developed in collaboration with Galan Lithium, 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 Galan Lithium’s PEA returns robust economics for 25-year Candelas Lithium project appeared first on Stockhead.



Author: Special Report

Continue Reading

Trending