interesting.....North America: The great lithium tie-up
The Clayton Valley in Nevada started producing lithium in 1966 and the Silver Peak lithium brine operation owned by Albemarle is currently the only producing lithium mine in the US.
In 2008 the National Research Council saw lithium as potentially becoming a critical mineral due to the expected growth of hybrid vehicle batteries. Two years later the US Department of Energy’s Critical Materials Strategy included lithium as one of 16 key elements. Lithium is among 23 critical metals President Trump recently deemed critical to national security, and signed a bill that would encourage the exploration and development of new US sources of these metals.
It’s unfortunate for the United States that its dependence on lithium coincides with the ramping-up of demand for the white metal. But it’s also an extraordinary opportunity for Cypress.
That’s because all of the other prospective lithium projects in North America (including Mexico) are either too small, too early-stage, or have already inked deals with off-shore suppliers to be of any help to North America in securing a domestic supply of lithium that would reduce US and Canadian dependence on foreign (ie. South American, Australian or Chinese) raw or processed lithium needed for the new electrified economy. Let’s take a run through the options. Note the size of each deposit, compared to what Cypress has, in the section below the list. (Note: in all cases except Nemaska Lithium, the numbers refer to contained lithium, not lithium tonnage).
• Nemaska Lithium. Japan’s SoftBank invested $100 million into Nemaska’s Whabouchi mine and electrochemical plant in northern Quebec. Nemaska has offtake agreements with FMC, Johnson Matthey, Korea’s LG Chem and Japanese battery chemicals trader Hanwa Corp/ General Lithium Corp of China, and Northvolt AV, a Swedish battery manufacturer.
37 million tonnes lithium, proven and probable reserves.
• Bacanora Lithium. Bacanora inked deals in 2017 with China’s NextView Capital, which took an 18.9% stake as well as an offtake agreement to supply NextView with 5,000 tonnes per annum of lithium carbonate in stage one, and 15,000 tpa in later stages; and an offtake agreement with Hanwa Corp. Bacanora, which like Cypress has a clay lithium project, earlier agreed to supply lithium hydroxide to Tesla with joint-venture partner Rare Earth Minerals.
1.9 million tonnes lithium carbonate equivalent (LCE) measured, 3.1MT indicated, 3.7MT inferred.
• Lithium Americas. Its Thacker Pass project in northern Nevada is intimately tied to Ganfeng Lithium of China. Lithium Americas collaborated with Ganfeng to do the metallurgical test work for the prefeasibility study. Ganfeng is a major investor ($174 million) in Lithium Americas’ Cauchari-Olaroz lithium project in Argentina, which it owns with SQM.
5,982,000 tonnes LCE, measured and indicated.
• Pure Energy Minerals. The company with a lithium project in Nevada’s Clayton Valley signed an agreement with Tesla Motors in 2015 to supply an unspecified amount of lithium hydroxide to Tesla for five years.
218,000 tonnes LCE, inferred.
• Global Geoscience. In June Global Geoscience, whose Rhyolite Ridge project in Nevada is composed of clay lithium and boron, did an A$53 million private placement. The underwriter is an Australian company and the shares were purchased by “high quality domestic [Australian] and offshore institutions.”
4.1 million tonnes lithium carbonate, 11.9 million tonnes boric acid, indicated and inferred.
On May 1 Cypress Development Corp put out its long-awaited maiden resource estimate for its Clayton Valley Lithium Project in Nevada. This clay-hosted lithium deposit has 1.3 billion tonnes of lithium containing 6.4 million tonnes of LCE, including 2.857 million tonnes LCE in the indicated category and 3.683MT LCE inferred. The amount of lithium contained within Cypress’ Glory and Dean claim blocks should not be underestimated. It is among the largest deposits in the world.
The main point is, compared to other North American lithium deposits, the Clayton Valley Lithium Project is larger, much larger than the projects mentioned above, and it doesn’t yet have a major financing in place whose shareholders it is beholden to, nor an offtake agreement that would lock up its lithium for years. Cypress is still free to decide who its customers will be and someone looking to build a US based lithium battery sector would have an unencumbered start.