Battery Metals Development and Exploration
The future-facing commodities exploration scene welcomes new players and investment
Discoveries are needed to meet battery metals demand and reach the ambitious targets set by society to leave the fossil-fuel economy in the past. The role of incentives is key in attracting foreign investment in exploration, and it is safe to say that Québec excels in that area. Leveraging the Federal Bill C-32, providing the new and non-refundable 30% Critical Mineral Exploration Tax Credit (30% CMETC), the province’s institutions have also shifted their focus towards supporting the most promising critical minerals projects.
James Bay takes on an Aussie accent
Australia’s reputation in lithium mining is well-established. The country is the largest producer of spodumene and mines more than 50% of the world’s lithium supply. Armed with that experience – and deep pockets for lithium projects – ASX-listed firms and Australia-HQed companies have started developing projects and staking an unprecedented amount of claims in Québec’s Eeyou Istchee James Bay region, and these include Allkem, Patriot Battery Metals, Sayona, and Winsome Resources, to name a few. Frank Mariage, partner at Fasken, noticed the shift: “Something new is working with Australian companies that are now implementing themselves in Canada to develop projects in the critical minerals space. Australians are used to working in a safe, mature jurisdiction, and Québec is one of the best mining jurisdictions in the world.”
The lithium potential in James Bay is attracting major interest from the world’s biggest mining companies. The market’s darling Patriot Battery Metals made a splash when it listed back on the ASX in December 2022, and the firm’s ascent is just starting. At its Corvette property, Patriot released in August a maiden inferred MRE of 109.2 million t at 1.42% Li2O and 160 ppm Ta2O5 (at a cut-off of 0.40% Li2O), ranking it as the largest lithium pegmatite resource in the Americas and the 8th worldwide. Those figures convinced lithium giant Albemarle, which subsequently invested over C$109 million for a 5% stake in Patriot. Rio Tinto made a similar move, acquiring 10 of Midland’s lithium properties in James Bay. Speaking to the future and metallurgy of Corvette, Patriot CEO Blair Way detailed: “We are aiming to permit a production scenario at CV5 which will propose scheduled construction in 2027 and commissioned and production by 2028. We are optimistic about this timeline because our metallurgy is very straightforward. We do not require flotation, which means our tailings will not contain chemicals or reagents, making tailings management very straightforward.”
The relative youth of the lithium exploration and development scene in Québec offers the perfect hunting ground for experienced Australian companies. Winsome Resources saw its share price multiply over sevenfold after it hit constant pegmatite mineralization at its Adina project. As the firm prepares for an initial resource by Q4 2023, Winsome’s general manager Carl Caumartin shared his take on what attracted his firm to Québec: “The lithium market, while growing and inciting interest, is perhaps less well understood than the precious and base metals markets, which the TSX and venture exchanges have traditionally catered for. Winsome has been able to easily raise the venture capital needed from Australia to advance its projects.”
Leading the exploration charge
Dotted around Patriot, Sayona, and Allkem’s existing resources are a plethora of juniors and developers intent on turning James Bay into a global lithium hub. Brunswick Exploration holds the largest grassroots exploration portfolio in Canada, and its CEO Killian Charles recognizes in James Bay a world-class lithium potential. Surrounded by Allkem, the firm’s Anatacau West project returned a great intercept with 26 m at 1.51%, giving Brunswick the confidence to put more drills in the area. In the long term, Charles is bullish on the region’s potential to unlock value: “Give it 10 more years, and like Australia, we will have generated over US$25 billion of value creation just in the lithium space. Our geological potential is just as good as Australia's. We need discoveries in Québec to feed North America, but also to feed Europe” he forecasted.
Lithium was not always the flavor of the day for financial markets. Now looking more like the flavor of the decade, cherry-picking previously explored properties might become a growing trend in James Bay. Having acquired the Mia lithium project in November 2022, Q2 Metals (which also owns a project in Australia) will be looking to replicate the Patriot success story, namely picking up properties that have been explored several years ago, but not for lithium. Up until five years ago, the Canadian market was avid for gold and copper mostly, explaining how most of the region’s geological potential remains untapped. Q2 will be the first company to carry out an extensive lithium-focused exploration program at Mia. With good funding and potential north of Mia at its blue-sky Stellar Lithium property, Q2 will hope to leverage institutional support to advance its projects rapidly. CEO Alicia Milne explained: “It is greatly beneficial to have the government as well as end users involved in exploration projects as it will push timelines forward significantly faster.”
Restarting past copper-producing mines
In August 2023, the US added copper to its critical elements list. Already deemed a critical mineral in Canada, the move further strengthened North America’s ambitions to bolster its red metal reserves in light of the green transition. And despite huge investments in exploration, there has not been a significant discovery in North America in a decade. Faced with that reality and growing copper demand, developers in Québec opted for the pathway of restarting past-producing mines. In July 2023, Osisko Metals acquired the past-producing Gaspé mine from Glencore. The resource currently stands at about 456 million t grading at about 0.31% copper, and Osisko Metals currently envisages a life of mine of 25 years that could be the same size as Canadian Malartic. Expanding on the decision-making process behind the transaction, CEO Robert Wares shared: “I believe that we will see a growing trend of restarting past-producing mines to meet the growing copper demand. The curve has just flattened out, and the few discoveries made are not in easy jurisdictions. So, the entire copper supply chain is at threat.”
Osisko Metals plans to launch a feasibility study in 2024 and be in production around 2028. Wares discussed the timeline: “It is ambitious, but relative to the rest of the planet, Québec is the place where it will be possible to get a permit in that timeframe.”
In any case, developers, permitting agencies, and authorities must act quickly. Eliminating greenhouse emissions by 2035 and reaching net zero targets by 2050 will require the world to double its copper output in a short timeframe. Wares warned: “There is a disconnect between the supply and demand fundamentals for the red metal. The reality of capital markets and political stability is another story compared with climate forecasts.”
Beyond the Gaspé and the Troilus mine (which produced around 70,000 t/y of copper between 1996 and 2010), a limited number of projects – those of Doré Copper, QC Copper & Gold, and Kintavar Exploration – are aiming at increasing the province’s copper output in the long term. In July, the latter filed a NI 43-101 report for the maiden copper MRE at the Sherlock zone of its Mitchi project. Expected to be done by mid-2023, a PEA will assess the hub-and-spoke model of Mitchi. Speaking of the fundamentals, Kintavar’s president and CEO Kiril Mugerman explained: ”We are seeing unprecedented price forecasts of between US$6 to US$8, which will make it economical for existing mines to start mining materials that were left behind in low-grade stockpiles.”
![](https://assets.foleon.com/eu-central-1/de-uploads-7e3kk3/6245/manganese_x-martin_kepman.c077ca24f1d7.png?)
"Manganese is an inexpensive metal that stabilizes all the other battery materials in the battery. It is compatible with many chemistries, and you can get the best performance out of the battery while reducing the cost of it. I call manganese Mr. Stabilizer."
Martin Kepman, CEO, Manganese X
Looking ahead
There will be several hurdles to overcome before seeing new producers in the critical minerals space in Québec. Two of the province’s most advanced developers highlighted pressure points brought about by the reality of capital markets before making it to the big stage. Few are those that boast more exploration experience than Robert Wares in the province, and for him, the issues lie in the cycle/waning of investor interest in the Lassonde Curve after firms announce their resource: “As you enter the feasibility study and permitting stages, you become less interesting to investors, and your retail market dries up. Some resource funds used to be long and supportive, but they have disappeared at the expense of retail investors. So, developers are in a tough space, and you cannot do debt financing to a reasonable level as you do not have your permits.”
The time between a firm’s PEA and the PFS is where the real cash crunch lies. Gordana Slepcev, Lomiko’s COO, noted that despite support for flow-through financing and increased tax reductions for critical mineral exploration, investments to complete the engineering and design lack before the FS. Osisko Metals’ decision to do a JV with Appian at its zinc-lead Pine Point project in Northwestern Territories is a lesson on how to navigate the current environment as a critical minerals developer. Simply put: “It is better to have a 40% interest in a permitted project than to sit at 100% ownership with no clear path forward toward production,” said Mathieu Savard, president.
With more projects planned to enter production in the next five years, Québec is well poised to supply the North American market with vertically integrated battery materials. With discoveries just starting to materialize in James Bay, it appears that the region will shortly be known as a global lithium hub, and will continue attracting ambitious explorers from all continents looking for “white oil”.
Image courtesy of Brunswick Exploration