IM Lithium News in Brief 24 February – 1 March

By Laura Syrett
Published: Tuesday, 01 March 2016

Bacanora releases interim report on Sonora progress; Altura signs MoU with Chinese battery and EV maker; Bloomberg predicts EVs will account for 35% of new vehicle sales by 2040.

UK AIM and TSX-V-listed listed Bacanora Minerals Ltd has released its interim update for the six months ending 31 December 2016, outlining progress the company has made in developing the Sonora lithium project in Mexico.

The company delivered a 337% increase in the indicated portion of its mineral resource estimate for Sonora to 5m tonnes lithium carbonate equivalent (LCE) during the period and completed a private placement financing of approximately Canadian dollar (C$) 17.8m ($13.18m*) to fund engineering work, a definitive feasibility study (DFS) and metallurgical testwork.

Bacanora is planning to build a 35,000 tpa LCE production plant at Sonora and said it expects the mining project to be completed in the near term.

Rare Earth Minerals Plc (REM), the AIM-listed holding company for Bacanora, has raised gross proceeds of approximately £3.55m ($4.96m) through the placing of 645.6m new ordinary shares at a price of £0.55/share to fund further strategic acquisitions in the lithium sector.

The strategy includes increasing REM’s economic interest in its existing investments as an initial focus, as well as pursuing additional deals with new companies. The funds were raised primarily from US institutional investors.

In Australia, Galaxy Resources Ltd and General Mining Corp. have begun diamond drilling at the Mount Cattlin lithium-tantalum deposit near Ravensthorpe in Western Australia (WA).

The current drilling programme is designed to follow up on intersections of spodumene-bearing pegmatite encountered during an earlier drilling campaign, conducted by Galaxy in 2008, to test for potential gold and gold-copper mineralisation in the pegmatite.

Drilling is proceeding on a double shift basis and is intended to reach a depth of 600 metres. The programme will also determine optimal depths for future infill extensional drilling of the main lithium-tantalum resource.

A second, hole of similar depth is planned for the northeast of the present drilling location.

ASX-listed Altura Mining Ltd has entered a non-binding memorandum of understanding (MoU) with Chinese lithium battery and electric vehicle (EV) manufacturer, Optimum Nano Battery Co. Ltd, to supply 100,000-150,000 tpa spodumene concentrate from Altura’s Pilgangoora lithium project in WA.

The MoU provides for the supply deal to last for the life of the Pilgangoora mine, which is currently pegged at 20 years. Prices for the first 150,000 tonnes will be based on the prevailing market value for spodumene and subsequent prices will be based on published sales values or negotiated between the parties.

The exploration company recently entered a partnership with Lionergy Ltd, another China-based company with an interest in producing lithium-iron-phosphate (LiFePO4/LFP) compounds for batteries, which it said will help it secure further mine-to-market deals.

Fellow ASX-listed Peninsula Mines Ltd has expanded its portfolio of lithium projects in South Korea, filing for 53 tenement applications over an area considered highly prospective for pegmatite associated lithium mineralisation.

A review of historic stream sediment sampling data collected by the Korea Institute of Geoscience and Mineral Resources has highlighted an area to the south of the Sangdong tungsten mine in Gangwon province in the north of the country, where an aerially extensive lithium anomaly is centred and where Peninsula intends to explore.

Maximus Resources Ltd, another Australia-listed company, is reviewing lithium occurrence identified in its Spargoville gold tenements in WA.

According to Maximus, Spargoville is located close to Neometals Ltd’s Mount Marion lithium project and Lithium Australia Ltd’s Lepidiolite Hill lithium project.

The company added that further exploration is required to confirm whether its Lefroy prospect and other mapped pegmatites are similar to those found at Mount Marion.

In WA’s Pilbara region, Mining Projects Group Ltd has received its first results from an airborne electromagnetic survey of the Pilbara lithium-golf project, which it acquired from Tyranna Resources Ltd last month.

The company said that the 1,410 line kilometre survey had identified high priority potassium-rich targets. Mining Projects Group now plans to conduct a detailed assessment of the data before proceeding with further exploration.

In North America, Canada-based MGX Minerals Inc. has engaged Cementation AG for the process and pilot plant engineering of a 20,000 barrel per day (bpd) lithium, potassium and magnesium extraction plant.

The plant is projected to produce up to 500 tpa lithium carbonate and provide sufficient data for development of a large scale commercial facility. Engineering work has commenced on an initial scoping study for the pilot plant and completion is expected within four weeks.

MGX has entered into a purchase agreement to acquire a 100% undivided interest in 12 metallic and industrial mineral permits and permit applications where lithium, potassium and magnesium-rich brines have been identified, encompassing 96,000 ha (960km2) throughout the province of Alberta, Canada.

Veraz Petroleum Ltd has advanced its agreement to identify lithium brine exploration targets along the central and southern Walker Lane trend in southwest Nevada, US.

The portfolio consists of 550 placer mineral claims distributed from the Mina-Luning area, west of Tonopah, to the lowest basin in the Armagosa drainage system in the Parhump area.

Veraz has also commenced fieldwork at its 196-claim Scotty’s Flat property in the same area. This phase of technical work will include preparation of geological reports for each of the nine property areas, specific programme planning for each area and advancement of one selected area, the Scotty's Flat targets, for completion of an NI 43-101 report.

TSX-V-listed Nevada Sunrise Gold Corp. has received preliminary results from a time-domain electromagnetic survey (TDEM) carried out on the Gemini lithium project in Lida Valley, Nevada.

A survey found that a conductive layer, 150-250 metres deep, appears to cover most of the Gemini West and Gemini East areas of the project and several isolated strong conductive zones were interpreted at depths from 400-600 metres. The conductive layers and zones are indicative of brine solutions in porous aquifers and traps.

The Gemini project is currently the subject of an interim agreement between the Nevada Sunrise and Eureka Resources Inc., whereby Eureka can earn a 50% working interest in a joint venture at Gemini.

Ashburton Ventures Inc. has increased its landholdings for lithium exploration in Clayton Valley, Nevada, by acquiring six new claims contiguous to the Elon claims it already owns, from an non-arm’s-length vendor in return for 300m shares to be issued on the TSX-V.

The new parcels of land border claims belonging to Pure Energy Minerals Ltd and Lithium-X Corp.

New research by Bloomberg New Energy Finance has suggested that further, big reductions in battery prices lie ahead, and that during the 2020s EVs will become a more economic option than gasoline or diesel cars in most countries.

The study forecasts that sales of EVs will hit 41m by 2040, representing 35% of new light duty vehicle sales. This would be almost 90 times the equivalent figure for 2015, when EV sales are estimated to have been 462,000, some 60% up on 2014.

The research estimates that the growth of EVs will mean they represent a quarter of the cars on the road by that date, displacing 13m bpd of crude oil but using 1,900TWh of electricity. This would be equivalent to nearly 8% of global electricity demand in 2015.                         

Colin McKerracher, lead advanced transportation analyst at Bloomberg New Energy Finance, said: "Lithium-ion (Li-ion) battery costs have already dropped by 65% since 2010, reaching $350 per kWh last year. We expect EV battery costs to be well below $120 per kWh by 2030, and to fall further after that as new chemistries come in."

Finally, the International Civil Aviation Organisation (ICAO) has issued additional clarifications on new Li-ion battery cargo restrictions on passenger aircraft.

The UN agency has said that Li-ion batteries carried by passengers in their personal electronic devices, whether in their carry-on or checked baggage, are not affected by this new restriction.

Passengers must not pack spare Li-ion batteries in checked baggage. Spares must instead be packed in carry-on baggage or carried on the person. For baggage shipped by air as cargo, ICAO added that Li-ion batteries may no longer be packed in baggage shipped independently as cargo.

The restrictions were implemented in response to a number of fire hazards on aircraft, believed to be caused by Li-ion batteries.

*Conversions made March 2016