PERUMIN 34: PLU featured on Investments Guide (pages 68-69)https://www.gbreports.com/files/pdf/_2019/MINPER_2019_-_Web_Preview.pdf Lithium and uranium
The same company has managed to define large deposits in the Puno region
For years, Plateau Energy Metals (formerly known as Plateau Uranium) worked on the consolidation of extensive uranium resources in the Macusani district of Puno, but the discovery of lithium in Falchani changed the company's focus. Very quickly, the exploration of lithium has allowed to define a large deposit of this element, to the point that in March 2019 the company announced a 90% increase in the lithium content. The current total resource contains 960,000 tons of equivalent lithium carbonate in the indicated category, and 3.75 million tons of equivalent lithium carbonate in the inferred category.
The executive director of Plateau, Alex Holmes, emphasizes that the value of lithium contained in the field reaches US$ 60,000 millions, but points out that the company still needs to educate investors about the peculiarities of Falchani, considering that this is a project of hard rock, while South America is mainly known for its brine lithium deposits: "The rocks with which we are working in Falchani are relatively young and have not been leached; we interpret that lithium is enclosed within the unstable volcanic glass that forms the most of the tuff matrix, which is why we refer to our lithium project as a "solid brine."
With respect to Plateau's uranium project, the company is waiting for the legal framework for uranium exploitation in Peru to be developed, as well as a better uranium price situation. In any case, the uranium project could be placed in a different investment vehicle, whether through a split, a strategic alliance or other alternative, says Holmes.
Interview with Alex Holmes
Executive Director Plateau Energy Metals
What does the update of the lithium resource mean for your Falchani project?
Plateau moved from the discovery stage in Falchani to the first lithium resource in approximately nine months. In September 2018, the company continued drilling in Falchani West and, in March 2019, we announced a new estimate of resources, with an increase of 90%. Thus, Falchani is ranked as the sixth largest hard rock lithium project in the world, with 4.7 million tons of equivalent lithium carbonate (LCE). According to our calculations, this means that there is a value of approximately US$ 60,000 millions in Falchani. I believe that, as the demand for lithium batteries and electric vehicles continues to increase, the company will achieve exponential growth.
Lithium projects in the region are mostly on salt flats. Does the market understand the potential of a lithium rock project?
We have a lot of work to do in terms of educating the market, and this will be done as metallurgical work progresses. The host rocks in our lithium project are volcanic rocks, mostly like a tuff rich in lithium (hardened volcanic ash), which is believed to be similar to the mother rocks in brine projects. The brine lithium projects are formed from the leaching of groundwater through ash and volcanic rocks, and then the aqueous solution rich in lithium ends up flowing into the basins below the salt flats, concentrating over time by the arrival of more solution and evaporation. The rocks we are working with in Falchani are relatively young and have not been leached; we interpret that lithium is enclosed within the unstable volcanic glass that forms most of the tuff matrix. Therefore, we refer to our lithium project as a "solid brine."
In January 2018, Plateau began working with a local metallurgical group to test all possible recovery methods. We have tested leaching in tanks and vats, toasting, baking and leaching in piles. We managed to extract lithium through all methods and we are deciding which will be the best route we can take. From now on, we will focus on the engineering and optimization of the process, while continuing to expand the resource in the second half of 2019 and 2020, looking west and north of existing resources.
What are your plans for the uranium project?
We have the Macusani uranium project for 10 years. We have been waiting for the Peruvian government to finalize the legal framework for the transport and export of uranium in the country. On the market side, the fundamentals are increasingly positive. The price of uranium has been so low for so long that no new operation has been put into operation, and the supply has even been substantially reduced. We believe that by the end of 2019 and the beginning of 2020, we will begin to see a significant increase in demand. These developments combine in a very favorable way for Macusani to become a uranium producer during the next cycle.
Could you summarize the following steps for Plateau Energy Metals?
Although both uranium and lithium fit well into the trend towards an environmentally friendly electrification, our investors in both projects have very different profiles. That is why we are evaluating several strategic options to maximize the value of our projects, such as a possible split, the creation of a joint venture with the most appropriate strategic partner, or another alternative that advances both projects.
We believe that, especially with our Falchani lithium project, we still have a significant space to grow. The company is defining the scope of a scalable and long-lived project, while maintaining a focus on capital efficiency and margins. We would like to advance the project through a preliminary economic study (PEA), to then reach prefeasibility and feasibility in the near future. Personally, I am excited about the future of Plateau and our host communities in Peru.