Lithium Exploration and Development
A highly competitive scene with clear cooperation perspectives
Lithium prices surged 123% year-to-date in October 2022 according to Benchmark Intelligence. Despite uneventful changes in market capitalizations, five of the 10 juniors on the TSX-V 50 (a list of the best performing TSXV-listed firms) in 2022 were lithium-focused, one of which being American Lithium, currently advancing the TLC project in Tonopah. Indeed, several juniors have made the move from a gold-heavy portfolio to a lithium-focused one since 2015. In Nevada, developers and explorers like Cypress Development Corp, Nevada Sunrise Metals, and Ameriwest Lithium saw in the past years the opportunity to benefit from the craze around the commodity to make the strategic shift.
Since mid-2022, several bills, grants, and acts at the federal level highlight the sense of urgency – beyond that of opportunity – for policymakers to increase domestic lithium production. Indeed, the Inflation Reduction Act, DOE Grants, and the Bipartisan Infrastructure Law highlight the tension between the requirement for minerals and reducing development time to meet the required supply. This is key in a country that aligned its future policy goals on electrification hopes: lithium demand is forecast to surpass 1 million t/y in 2025, with global EV penetration rates set to hit 21%. In the long term, this figure could represent 2 million t/y for the first time in 2030, with EV penetration rates set to hit 34%.
Eyeing production and offtake agreements
Currently sitting at the bankable feasibility study phase and final stages of permitting, ioneer’s lithium-boron Rhyolite Ridge project aims to be a low-cost supplier of lithium for the US domestic market. Committed to sustainability despite being faced with water usage and environmental concerns, the project aims to be the most water-efficient lithium operation in the country and will use extraction methods similar to the copper industry, by extracting the lithium and boron through a vat leaching process. Bernard Rowe, managing director, explained the process: “We concentrate the lithium in the solution to extract it. We use large tanks (evaporators) to boil the liquid and drive off the water. The steam that comes off is captured, cooled, and condensed back into water that can be reused. Approximately 50% of our water gets recycled like that.”
Besides its pioneering water-recycling approach, Rhyolite Ridge will also be known as the first greenfield operation in the US to fully use autonomous hauling systems. Relying on automation and technological equipment expertise from Cashman Equipment, Caterpillar’s Nevada dealer. “These trucks will take the crushed ore from the mine site to the processing plant, about 3 km away. The trucks will be guided by high-precision technology, so every movement will be monitored and controlled through sophisticated guidance systems”, explained Bernard Rowe.
An oral hearing appealing a record of decision expected on 5 January 2023 has the potential to change the face of lithium security in the US. Lithium Americas’ much-debated Thacker Pass is awaiting a ruling that would see it getting closer to production. In the meantime, the firm is preparing for the future, particularly through innovations made at its Lithium Technical Development Center (LiTDC) in Reno, where the firm processes raw ore to final battery-quality lithium carbonate. Expanding on the firm’s environmental footprint, as Thacker Pass will be reusing or recycling every drop of water over seven times, with an average recycling rate of 86%, president and CEO Jonathan Evans explained: “The operation will be a Zero Liquid Discharge facility, which is intended to prevent the discharge of industrial wastewater into the environment. This is an extensive commitment because it means all water that is filtered from tailings must be evaporated or recycled for reuse within the site’s production process.”
A noticeable trend in the coming years will probably revolve around offtake agreements between carmakers and lithium developers ahead of production. Rowe acknowledged that the full lithium supply chain is still a work in progress, yet Ioneer expects its lithium to be used in US EVs, and for the firm to be a key partner in the US domestic supply chain. ioneer signed in July 2022 a lithium offtake agreement with Ford and will deliver 7,000 t/y of lithium to the automobile constructor for five years, starting in 2025.
"Tonopah is one of the best places for access to the market, access to existing infrastructure, and access to commercial off-take customers. The opportunity of developing homegrown assets and getting them to market will set Nevada apart."
Jason Latkowcer, President, CEO, and Director, Pan American Energy Corp.
A hub for innovative and collaborative approaches
In a development brought about by unprecedented demand/supply dynamics, automotive, commodity traders, and chipmakers have started evaluating early-stage projects. The NDOM recorded in 2022 40 explorers, with 30 of them in Clayton Valley alone, 12 clay/hard rock projects, and over 30 lithium brine and DLE operations. Dozens of Nevada-based players exploring a few hundred miles from each other in the state’s lithium-rich valleys are persuing a cyclical opportunity to become the next Nevada-based lithium producer.
In Clayton Valley, a new player is keen on disputing the hegemony of existing and developing giants: Cypress Development Corp. Possessing its Chlor-Alkali plant to extract and process lithium, the firm expects to release a feasibility study in Q2 2023, after it discovered well-exposed lithium buried in claystone, running around 300,000 ppm. The project’s target production is 20-30,000 t/y of LCE, which could support a gigawatt factory. Putting an accent on environmental stewardship and leveraging the state’s potential for solar and geothermal power, Clayton Valley project will use Direct Lithium Extraction (DLE) technology. Touching upon leveraging the benefits of DLE at Clayton Valley, Bill Willoughby, CEO of Cypress Development, explained: “DLE is a series of steps related to ion exchange. We begin by breaking the clay down in a high-speed mill and moving this slurry into leach tanks. We add hydrochloric acid, extract lithium from the clay, clean the tailings, and then raise the pH. The solution is filtered and passed through our DLE process. This is unique and leads to a 99,5% recovery of the lithium extracted from the clay at this point.”
In Nye County, 90 minutes away from Las Vegas, Nevada Lithium Resources and Iconic Minerals partnered 50% each to advance the Bonnie Claire project, with an 18.37 t/y LCE. The project is permitted for further drilling, and both firms are actively carrying out metallurgy tests to determine the most efficient method of recovery. In September 2022, the firm encountered its highest-ever recorded lithium grade, with drilling results returning up to 5,570 ppm. Many projects are emerging, and merging, in Nevada, which will likely lead to common resources being shared. As put by Nevada Lithium Resources’ Stephen Rentschler: “We will see the development of a large common infrastructure – rail, highway, and utilities - to help exploit the development of all the necessary minerals."
Recent formalized ventures in the lithium space potentially hide a key development amongst earlier players in Nevada. Faced with rising operational and capital costs, along with the shortage of skilled drillers notably, several juniors are considering teaming up. Steve Hanson, founder, president and CEO of ACME Lithium, whose unique portfolio gathers properties in the vicinity of the two sole operational lithium mines in North America (Silver Peak, Nevada, and Tanco, Manitoba), sees getting an initial resource as a catalyst in 2023. Acknowledging that Nevada will become a hub for DLE commercialization in the future, due to its smaller environmental footprint and CAPEX mostly, he highlighted the importance of partnerships going forward to bring that technology online at scale: “Ultimately, if DLE will be utilized, I do not see 10 separate plants, but groups collaborating and using the same processing facilities from several sites. Collaboration helps de-risk projects, keeps capex low, and increases speed to market.
Christoper Brown, president and CEO of HeliosX Lithium & Technologies Corp, who owns the Teels Marsh and Alkali Lake projects in Nevada, sees the collaborative approach going beyond operators, up to involving Washington. Regarding the shortage of skilled drillers – crucial to the success of establishing a lithium resource, as an overweight drill would flood zones and return zero indications of mineralization – Christopher Brown believes the government could create initiatives to subsidies drillers and allow operators to share costs: “One of the incentives government could do is support bringing drilling rigs to Nevada, especially for lithium. Bringing a couple of qualified drilling rigs to go to the depth and collect the information we need, then sharing the mobilization costs would economically benefit all players and unlock Nevada’s lithium potential.”
Image courtesy of ioneer