Lithium’s vital significance to the worldwide inexperienced vitality transition is predicted to proceed for the foreseeable future. Actually, the expansion in demand could be so exponential trade that some analysts imagine the world could face supply shortages as early as 2025 if extra lithium manufacturing doesn’t come on-line.
Within the face of this, one query stays on everybody’s thoughts — the place do we discover sufficient lithium to stave off the scarcity?
Lately, Northern Canada has emerged as a brand new frontier for lithium exploration. Politically and economically secure and with a well-established mining sector, the area has all the appropriate components to help a thriving lithium exploration and improvement sector. However Northern Canada just isn’t with out its challenges, both.
To make knowledgeable choices, traders want to know each the challenges offered by Northern Canada’s distinctive local weather, the alternatives its mining sector represents and the worth of latest lithium spodumene discoveries.
A vital mineral in brief provide
Latest years have seen lithium’s emergence as a lynchpin for each electrification and the clear vitality transition. Because the core ingredient in lots of sorts of rechargeable batteries, lithium is crucial for the electrical automobile trade. It is also used extensively in vitality storage methods, that are themselves essential parts for each wind and solar energy.
As governments all over the world proceed to decide to carbon neutrality and local weather motion plans, lithium has understandably skilled a meteoric rise in demand. Sadly, lithium manufacturing is struggling to maintain tempo. Between staffing shortages, provide chain interruptions and allowing points, lithium mining and exploration corporations usually face a veritable gauntlet of challenges and delays.
This has led to what RK Fairness Associate Howard Klein refers to as an oversupply of funding alternatives. Alongside ongoing delays, this overabundance of incomplete initiatives has brought on automakers to change into significantly extra concerned within the lithium sector. Relatively than ready for others to ascertain a lithium provide chain, authentic gear producers have begun taking issues into their very own palms by signing offers with a number of junior mining and exploration corporations.
These partnerships will solely improve the automotive sector’s affect on the lithium market, which at current is closely impacted by demand from the electrical automobile and industrial sectors. Though lithium costs hit a ground in late 2022, that very same 12 months noticed them improve by nearly 500 percent. In gentle of this, we are able to count on the price of lithium to proceed its upward trajectory.
This is the place Northern Canada is available in. Areas resembling Québec’s Nunavik and Eeyou Istchee James Bay areas, in addition to Northern Ontario, not solely home appreciable lithium reserves however are additionally largely underexplored. This makes them an extremely worthwhile alternative for each mining corporations and traders.
That is maybe finest exemplified by the Whabouchi challenge, which is owned by Nemaska Lithium and Livent (NYSE:LTHM) and positioned in Eeyou Istchee James Bay. Nemaska describes the challenge as “one of many largest high-purity lithium deposits in North America and Europe,” because it hosts roughly 27.3 million metric tons of confirmed and possible reserves. The location will host an open pit and underground spodumene mine in addition to a lithium hydroxide plant, and already has an 11 year supply deal inked with Ford Motor Firm (NYSE:F).
For context, hard-rock lithium initiatives, which host lithium-bearing spodumene pegmatites, usually comprises considerably increased lithium concentrations than both brine or clay. Its abundance and excessive lithium content material make spodumene deposits supreme for large-scale lithium manufacturing, which is crucial for supplying the rising necessities of battery producers and different industries. Northern Canada is house to in depth reserves of spodumene, leading to many doubtlessly viable challenge websites within the area.
Eeyou Istchee James Bay additionally hosts Patriot Battery Metals’ (TSXV:PMET,ASX:PMT,OTCQX:PMETF) Corvette property, positioned inside an rising spodumene pegmatite district by which Patriot has already recognized greater than 70 lithium pegmatite outcrops to this point.
It is not simply mineralogy that makes Northern Canada a horny exploration goal. Though mining rules differ by province, as an entire, Canada is acknowledged as one of many world’s most secure mining jurisdictions. Many provinces have lengthy histories with the mining trade, which interprets to favorable authorities attitudes and entry to a extremely expert workforce.
There’s one different issue at play right here, as properly. Eeyou Istchee James Bay, which in recent times has been a lithium exploration hotbed in Northern Canada, has largely been claimed. In consequence, exploration corporations wish to different areas of Canada’s north to search out potential floor.
But for all its promise, the huge and underexplored area suffers from one doubtlessly crippling downside — the chilly.
Exploring Canada’s northern frontier
Northern Canada is basically characterised by harsh, chilly, lengthy winters and subarctic permafrost. Winter temperatures within the space can incessantly drop beneath minus 50 levels Celsius. Work circumstances at mining and exploration initiatives through the winter might be hazardous to each employees and gear.
When achieved appropriately and safely, nevertheless, exploration work that continues by the winter season can present corporations a aggressive benefit over their friends. For one factor, entry to winter roads is considerably simpler with much less exercise through the winter season, permitting ease of transport of apparatus, supplies and personnel to and from a challenge web site. It additionally permits on-foot exploration and surveying to a a lot larger extent than could be doable throughout hotter months.
Working 12 months spherical fairly than suspending operations throughout winter additionally supplies a substantial benefit for each an organization and its shareholders, because it means fewer delays and a shorter timeline for the institution of a totally operational mine. There’s additionally much less danger of upsetting the permafrost layer or inflicting environmental harm — a giant acquire for sustainability.
Moreover, a useful resource firm with the potential to conduct exploration actions by the winter will profit from sustained momentum pushed by common information circulation on drill outcomes.
Key gamers in Northern Canadian lithium exploration
Though a lot of Northern Canada stays underexplored, there have however been some extremely promising lithium discoveries within the area.
In October, Patriot Battery Metals announced the discovery of a brand new high-grade spodumene pegmatite zone at its Corvette property. The zone is a part of the present CV13 spodumene pegmatite pattern, which extends over a strike of roughly 2.3 kilometers in size and is open at each ends. Patriot has already made plans for additional drilling after the vacations in January 2024.
That very same month, North Arrow Minerals (TSXV:NAR) found a number of new spodumene mineralized pegmatites at its LDG and MacKay lithium initiatives within the Northwest Territories. To this point, greater than 17 easy and spodumene-bearing pegmatites have been recognized between the 2 properties. As a result of each initiatives show related geology to the Yellowknife Pegmatite Province, North Arrow asserts they’ve the potential for related measurement and scale.
Brunswick Exploration (TSXV:BRW,OTCQB:BRWXF), in the meantime, introduced the invention of an undocumented spodumene-bearing pegmatite on the Elrond challenge, a part of the corporate’s Mythril choice settlement with Midland Exploration (TSXV:MD,OTC Pink:MIDLF). Brunswick is presently planning further drill packages to happen in winter 2024.
Lastly, Past Lithium (CSE:BY,OTCQB:BYDMF) found promising new spodumene-bearing pegmatite zones at two of its initiatives in Ontario: the Ear Falls project and the Victory project. Each initiatives are accessible by main highways and a community of well-maintained logging roads.
Following Past’s spodumene discoveries in September, the corporate has continued its exploration, launching a observe up stripping and drilling program at Ear Falls in October that can inform a extra substantial upcoming drill program. This continued work all through the winter and the corporate persevering with to receive assay results from its latest drill packages have created a constant information circulation for Past.
Different corporations with latest spodumene discoveries within the area embrace Volta Metals (CSE:VLTA), Tearlach Assets (TSXV:TEA,OTCQB:TELHF) and Quebec Treasured Metals (TSXV:QPM,OTCQB:CJCFF).
Investor takeaway
Lithium demand has elevated exponentially over the previous a number of years, and there’s each indication that it’s going to proceed to take action. As manufacturing struggles to maintain tempo, we have seen the emergence of a number of lithium mining and exploration corporations. Many of those organizations are laser-focused on Northern Canada — doubtlessly the positioning of the subsequent main lithium rush.
Buyers would do properly to concentrate on each these corporations and the funding alternatives they characterize.
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