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Demand for Lithium and Cobalt Expected to Grow as EVs Gain Popularity

V.EVX, V.EMX, T.ASM, V.LIS

FinancialBuzz.com News Commentary

PR Newswire

NEW YORK, October 15, 2018 /PRNewswire/ --

The growing adoption of electric-vehicles (EV) and the subsequent need for lithium-batteries is increasing the demand for two critical raw materials, lithium and cobalt. According to a report published by McKinsey & Company, the demand for cobalt is expected to increase by 60% to reach 222 kilotons of refined metal equivalent by 2025, up from 136 kilotons in 2017. The demand for lithium will increase more than threefold, to 669 kilotons of lithium carbonate equivalent (LCE) between 2017 and 2025. The price of cobalt and lithium has spiked in recent years due to the increasing demand and its limited supply. More than 65% of cobalt production is concentrated in the Democratic Republic of the Congo (DRC), while the lithium supply comes from Australia, China, and Latin America. European Electric Metals Inc. (OTC: EVXXF), EMX Royalty Corporation (NYSE: EMX), Avino Silver & Gold Mines Ltd. (NYSE: ASM), NRG Metals Inc. (OTC: NRGMF), Nemaska Lithium, Inc. (OTC: NMKEF)

The development of EVs has accelerated in recent years due to the growing awareness of environmental issues, such as global warming. According to the International Energy Agency, the number of electric and plug-in hybrid cars on the world's roads surpassed 3 Million in 2017, representing a 54% increase when compared with 2016. The IEA said in the report: "Additionally, the capacity to refine and process raw cobalt is highly concentrated, with China controlling 90% of refining capacity. Even accounting for ongoing developments in battery chemistry, cobalt demand for EVs is expected to be between 10 and 25 times higher than current levels by 2030."

European Electric Metals Inc. (OTC: EVXXF) is also listed on the TSX Venture Exchange under the ticker (TSX-V: EVX). Last week, the Company announced breaking news that, "it has entered into an agreement to acquire 100% of the issued and outstanding shares of Gerold Sh.pk. ("Gerold"), an arm's length party, which holds the Skroska Iron-Nickel mine ("Skroska") in Albania.

Gerold previously ran a 200 tons per day mine at Skroska, a fully permitted mining operation covered by a 20-year mining license, which was issued in 2008. Gerold conducted mining operations on Skroska from 2008-2013 using an open stope method. The operation previously focused on nickel production and the mine was put on care and maintenance in 2013 due to low nickel prices. EVX's geological team believed there was potential for high-grade cobalt in this geological setting and during sampling realized this potential.

All underground infrastructure and mining equipment necessary to conduct mining operations is in place, owned and onsite. The mine is 16 kilometers on a paved road to a rail loading station that connects the mine to a shipping port. In addition to the commencement of mining operations, the Company will also target to confirm and expand the historic resource through drilling and undertake a study to evaluate an expansion of the historic mining rate.

EVX geologists investigated the possibility of higher-grade cobalt zones at Skroska, believing there may be similarities between mineralogy of Skroska laterite deposit and the Geovic's Cameroon laterite deposit. During sampling at the Skroska the EVX geological team took 18 laterite samples collected from 10 different underground locations. The assays ranged from 0.05% to 0.54% Co and from 0.36% to 1.92% Ni. Ten of these samples assayed 0.15% Co and above and are shown in the table below. The presence of this cobalt-rich laterite had not been previously recognized at Skroska.

…The samples were taken vertically from the pillars/columns of the mine and have widths varying from 0.40 meter to 1.10 meters. Where two samples have the same preceding number (i.e. 7A and 7B) it means they were taken from the same location and are contiguous. The majority of the samples were collected at Level-815 of the underground mine, with three samples taken at Level-850. The sampling program covered a lateral distance of approximately 420 meters. The location of the samples and their corresponding assays are shown in the Company's website (http://www.europeanelectricmetals.com )

The samples were sent to ALS Lab in Serbia for preparation and sent to their laboratory in Ireland for analysis. The analytical suite selected was ME-XRF12n. This analytical suite is suitable in the analysis of ore grade nickel laterite samples.

Mr. Fred Tejada, EVX CEO and Director states, 'We are excited our geological team recognized the potential for the cobalt-rich horizons at Skroska and very pleased that this potential has been confirmed in the sampling program, via high grade cobalt results. This transaction represents a major step towards our goal of becoming an ethical source of high-grade cobalt production, within a European setting.'

The Skroska Mine - The Skroska deposit had a historic resource of 22.4 million tons grading 0.99% Ni, 50% Fe and 0.065% Co. The reserve is historic in nature (see note below). The laterite deposit ranges from 2 meters to 10 meters in thickness and averages 6 meters thick. It occurs between the ultramafic rocks (serpentinized) below and limestone on top or as a capping. The limestone is a competent rock which makes it a natural roof for the open stope underground mining method employed in the mine. Approximately 100,000 tons were mined by Gerold at an operating rate of 200 tons per day and 55,000 tons were shipped to China, while about 15,000 tons in Macedonia (information provided by Gerold Sh.pk. personnel). The rest of the mined materials are stockpiled in the mine site (the stockpile is not included in the Agreement). Prior to Gerold, mining was conducted by a state-run enterprise from 1985 to 1990 extracting 1.054 million laterite ore and delivering to the Elbasan Ferro-Nickel smelter some 58 kms to the west of the mine (based on available government information). 

Based on the sampling done by EVX in July 2018, the mine openings (haulage, development and production areas) were observed to be accessible and free of major blockages. Electrical power supply to the underground areas was available while major mine equipment both inside the underground works and on the surface were observed to be in good condition and are reported to be operational. The Company's geologists persisted in looking at the possibility of higher grade in some of the deposits similar to grades in the Geovic Cameroon deposit. Having had indications of elevated Co in prospecting done, the Company's geologists conducted a 2-day sampling program in Skroska in July. EVX geologists sampled the appropriate horizons and came back with very high cobalt grades.

Cobalt has not been a significant contributor in the past as all the laterite production in Albania was processed for nickel and iron. Historically, prior to Albania building its own smelter in 1976 in Elbasan, the laterite ore was shipped to China and Czechoslovakia. The Company has 4 months to conduct due diligence study which will include among others a study to determine if mining operations can be re-started within 6 to 12 months. Historical resource estimates are not mineral reserves and do not have demonstrated economic viability…

Note: The tonnage and grade estimates stated above are historic in nature and were obtained from the records at the Albanian Geological Survey. The estimate done, using Russian Style Polygon method, are roughly equivalent to the National Instrument 43-101 inferred category. No qualified person has done sufficient work to classify the historical estimates as current mineral resources. EVX considers the historical estimates relevant in guiding exploration efforts and planning although EVX is not treating the historical estimates as current mineral resources. EVX will need to undertake a comprehensive review of available data, including further drilling, to verify the historic estimates and classify them as current resources.

Jose Mario Castelo Branco, EuroGeol, a Qualified Person under the meaning of Canadian National Instrument 43-101 and Chief Geologist of the Company is responsible for the technical content of this news release.

About European Electric Metals Inc. - European Electric Metals Inc. is a Canadian listed public company, with a focus on electrification themed projects in Europe. A major shareholder of EVX is the European Bank for Reconstruction and Development. The goal of EVX is to become a major source of battery metals such as copper, nickel and cobalt, and the Company seeks to do so within safe, stable and logistically attractive European jurisdictions. The Company's projects are ideally located with excellent road, port and grid power availability, and near European countries that are poised to experience dramatic growth in the electric-vehicle-manufacturing industry. There is a strong battery-manufacturing industry within Europe with many more projects in the pipeline." 

EMX Royalty Corporation (NYSE: EMX) leverages asset ownership and exploration insight into partnerships that advance its mineral properties, with EMX receiving pre-production payments and retaining royalty interests. EMX Royalty Corporation recently announced its acquisition of 2,020,202 common shares of Boreal Energy Metals Corp., representing an additional 4% equity stake in BEMC, and bringing EMX's aggregate interest to 9.9% of BEMC's issued and outstanding shares. EMX acquired the additional shares pursuant to the sale of the Njuggträskliden and Mjövattnet nickel-copper-cobalt projects in Sweden. The shares were issued to EMX at a deemed price of CDN 0.05 per share. BEMC is a recently formed private company focused on battery metal assets in Scandinavia and is a subsidiary of Boreal Metals Corporation. In addition to EMX's direct ownership in BEMC, which includes an initial 5.9% share equity position resulting from the sale of the Guldgruvan cobalt project, EMX also has an indirect ownership interest via its 17.9% interest in Boreal, which owns the remaining 90.1% of BEMC. These interests provide EMX and its shareholders immediate exposure to equity upside, while the royalty interests provide longer term exposure to mineral production revenues and the optionality of continued exploration success and discovery.

Avino Silver & Gold Mines Ltd. (NYSE: ASM) is a silver and gold producer with a diversified pipeline of gold, silver and base metals properties in Mexico and Canada employing approximately 600 people. Avino Silver & Gold Mines Ltd. announced an update on its recently announced 2018 - 2019 strategic exploration objectives for the Bralorne Gold Mine, located near Gold Bridge, British Columbia. In June 2018, a team of expert structural geoscientists completed a one month study that evaluated existing data along with an in-depth site analysis. The objective of the study was to create an updated, detailed surface geological map, a complete 3D geological model, and structural model identifying veining along with target recommendations. Existing geophysical data on the Bralorne property is historic and dated and was compiled using methods and technology that has limited current use. As an aid to the structural and geological modeling, as well as greatly assisting with targeting, current state-of-the-art geophysical surveys are on-going and have largely been completed. With an interest in co-product elements such as cobalt, a small-scale program is planned as a first pass assessment of the potential for Cobalt-Gold mineralization, similar to The Little Gem Cobalt project which is owned by Blackstone Minerals, and which occurs 9 km northwest of the Bralorne property.

NRG Metals Inc. (OTCQB: NRGMF) is an exploration stage company focused on the advancement of lithium brine projects in Argentina. NRG Metals Inc. recently provided additional information regarding the maiden lithium (Li) and potassium (K) resource statement for its Hombre Muerto North lithium brine project in the Salta province of Argentina. The average grade of lithium for the 571,000 tonne combined Measured and Indicated resource (509,000 measured and 62,000 indicated) is 756 mg/liter lithium, with a low lithium to magnesium ratio of 2.6 to 1. Adrian Hobkirk, President and Chief Executive Officer of NRG, commented, "the grades we are seeing at the Hombre Muerto Project are some of the highest reported grades for any of the lithium bearing brine deposits in Argentina. The combination of high grades, excellent chemistry and good pumping rates are very positive indicators that we hope will allow us to advance the project through feasibility studies to production should the economic viability and technical feasibility of the project be established."

Nemaska Lithium, Inc. (OTCQX: NMKEF) is a developing chemical company whose activities will be vertically integrated, from spodumene mining to the commercialization of high-purity lithium hydroxide and lithium carbonate. Nemaska Lithium Inc. and Northvolt AB recently announced the signature of an agreement providing for the supply of battery grade lithium hydroxide by the Corporation to Northvolt. On April 27th, 2018 Nemaska Lithium announced an agreement in principle with Northvolt. This agreement is now superseded by a definitive 5-year supply agreement. Under this agreement, Nemaska Lithium agrees to supply, through its wholly-owned subsidiary Nemaska Lithium Shawinigan Transformation Inc., and Northvolt agrees to purchase, on a take-or-pay basis, up to 5,000 but not less than 3,500 metric tonnes per year of lithium hydroxide produced at the Corporation's commercial plant in Shawinigan, for a 5-year supply period commencing upon the start of commercial production at both the Shawinigan Plant and Northvolt's projected Skellefteå factory in Sweden (the "N Factory").

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