Pure Energy Minerals Ltd. (TSX: V.PE, Stock Forum) is emerging on investor radar screens as it works to become a North American based lithium producer by developing its flagship Clayton Valley property in Nevada.
After jumping to a 52-week high of 36 cents last week, shares in the Vancouver-based company are up 70% since mid-January, leaving a market cap of $6.2 million, based on 17.2 million shares outstanding. That’s up from a low last year of just 2 cents.
Pure Energy is among a handful of junior companies which are aiming to benefit from robust demand for lithium-ion batteries from the consumer electronics industry and increasing adoption rates in the automotive and energy storage sectors.
Others include Orocobre Ltd. (TSX: T.ORL, Stock Forum), which is building a large scale brine-based project in Argentina with backing from Toyota Tsusho Corp., a member of the Japan-based Toyota Group.
Pure Energy’s stock price was driven higher last week following news that the company has resumed exploration drilling work at the Clayton Valley lithium brine property where it hopes to establish a 43-101-compliant resource estimate before the end of the 2015 second quarter.
“On successful completion of this phase, we will be ready to drill test new targets,’’ said Pure Energy Chief Executive Officer Robert Mintak in a press release.
Fully-funded to complete its exploration plans, the company is also evaluating new technologies with strategic partners for processing a mixed stream of lithium chemistries into various battery-grade feedstocks.
Why lithium
Lithium is a critical strategic element that is related to energy security and climate policy.
Properties of lithium that draw investment in the silver-white metal include an ability to tolerate extreme heat, and a weight- to-energy density that makes lithium batteries ideal for any application where weight is an issue.
That same high energy density and low weight characteristics makes lithium batteries the best choice for electric/hybrid vehicles.
“We believe lithium will have a significant global impact as hybrid and electric vehicles switch to lithium-ion technology,’’ Pure Minerals has said.
Indeed, mass production of hybrid and electric vehicles and grid storage represents the most significant “step change’’ for lithium demand, the company said, adding that demand for battery-grade lithium portable electronic devices has grown at a rate of 20% per year since 2000.
According to a report by Credit Suisse and quoted on the Pure Energy website, demand for lithium is expected to exceed supply by 25% by 2020, driven higher by the surge in its use of transportation and energy storage.
Company officials also like the fact that the price of lithium has increased by 300% since 2003.
Brine salt lake deposits
Lithium occurs in a number of rock minerals. But most of the world’s production comes from brine deposits because they are more economically viable for making lithium-ion batteries.
Brine salt lake deposits (dry salt lakes containing lithium chloride) result when pools of salt water containing lithium chloride (LiCl) accumulates in places which lack drainage, such as deserts.
Over the centuries, the water evaporates, leaving a dense layer of salt behind. Underneath the salt crust is a layer of brine ---- salty groundwater with a high concentration of lithium chloride. It is the brine that is pumped out and converted to lithium.
Pure Energy has over 5,000 acres of placer mining claims that are contiguous to Albemarle Corp.’s (NYSE: ALB, Stock Forum) Silver Peak Mine, the only lithium production facility in North America, the company has said.
Its key properties are located in Clayton Valley, an elongated half-graben basin that extends for approximately 26 kilometres and is surrounded by highly lithium-enriched tertiary rhyolitic tuffs and lithium-bearing sediments, as well as an active geothermal system.
Over time, the lithium has become mobilized from these sources and deposited into the groundwater.
Two historic drill holes on the property intersected a mineralized aquifer with brine lithium concentrations ranging from 230-400 ppm Li.
In the fourth quarter of 2014, Pure Energy drilled a well to a depth of 275 metres (CV-1). The company said lithium-bearing units were encountered from 152-275 metres, with lithium brine concentrations averaging 264 ppm.
It has since developed an exploration program to expand on these preliminary results.
The next phase of exploration is underway to include additional drilling and geophysics programs sufficient to produce a 43-101 compliant inferred resource report by the end of the second quarter of 2015.
Processing Technology
Conventional lithium extraction techniques are expensive, harmful, and do not optimize the resource.
That’s because conventional lithium processing requires the use of extensive evaporation ponds [5,000 acres plus] to concentrate the brines prior to processing. This is a waste of valuable quantities of water. In addition, the ponds are expensive to build, and can recover only about 40% of the available lithium.
Last month, the company said it has engaged Tenova Bateman Technologies, a developer of solvent extraction technology that efficiently extracts lithium from brine and various waste streams.
It said the technology eliminates the use of traditional large-scale evaporation ponds, resulting in a processing time of less than 12 hours and a 99% lithium recovery.
Pure Energy said the LiSX (TM) process allows for the reinjection of brine back into the ground after the lithium is extracted, adding that the technology has been successfully tested in Israel.
Pure Energy has also signed a non-binding Memorandum of Understanding with Korean Multi-National 9POSCO) to explore opportunities to develop and commercialize green metal extraction technology from its Nevada properties.