Infinite Lithium keeps delivering at Jackpot deposit in Ontario
Infinite Lithium Corp. (TSXV: ILI) has made another important discovery of lithium pegmatite reserves at its Jackpot deposit in Ontario, underscoring the potential of this aptly named project.
Drill results intersecting 5 meters showed lithium content of 3.02%, the company said in a press release earlier this week. The results could eventually improve on a historic resource at the site of 2 million metric tons containing 1.09% lithium oxide, a number which by itself constitutes a feasible project given current market conditions.
“The drilling is giving us all the right signs,” CEO Michael England said. “We’ve got a historic resource and we want to firm that up and grow it.”
The Ontario Lithium Co. first drilled Jackpot in the 1950s to make more lithium supply for anti-depressant drugs and nuclear weapons. The world at the time hadn’t discovered how to extract lithium brine from the salt flats of the Atacama Desert. But by the same token, electronics manufacturers were decades away from identifying lithium’s virtues as a form of power storage. The project didn’t see the light of day.
Where low cost brine production made lithium rock mining unfeasible throughout the 1980s and 1990s, double digit demand growth in more recent years from electronics has led to its renaissance. In particular, Albemarle and China’s Tianqi are planning a $320 million expansion to the Greenbushes pegmatite mine in Western Australia, besides the construction of a lithium hydroxide plant at the site.
Brine operations are lower cost as the salty water is pumped to service and concentrated through evaporation in the desert sun, requiring far less energy. But the process is known to suffer hitches with purity and predictability over delivery times, especially in companies that are starting operations. Orocobre, an Australian company backed by Toyota Tsusho, has experienced setbacks at its Olaroz operation in Argentina in 2017.
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Pegmatite deposits, despite being smaller than brine deposits, are relevant in the market because of their more lithium-dominant compositions and the fact that they are less susceptible to supply disruptions, according to research by geologist Steve Keller.
Infinite plans a third phase of drilling, building on a 15-hole drill program over 2,052 meters so far that has the potentially to significantly boost average grades first established by the Ontario Lithium Co. The metallurgy shows the potential to produce battery grade carbonate and hydroxide, England said. The company at a later stage plans to carry out a preliminary economic assessment.
The company is being advised by Victor Cantore, who worked on the successful start-up of Nemaska Lithium Inc., a project in Quebec. That project is currently going through a pilot production phase.
Manufacturers are more keen on buying chemical grade lithium hydroxide, rather than an intermediary lithium carbonate that most miners and brine operations supply. Nemaska, in a sense, provides a roadmap for Infinite, with a proprietary plant that will transform spodumene concentrate into high purity lithium hydroxide and carbonate.
The nuances of the lithium market have led to several lithium executives and market experts to question a prediction by investment bank Morgan Stanley that prices will tumble. Morgan Stanley predicted that the adoption of electrical vehicles (EVs) will be too slow to absorb supply from new operations slated to start production before 2021.
“We think supply demand is going to continuously increase here,” England said. “We think we’re in the right space, for sure.”
Matt Craze has covered commodity markets for more than 20 years, working as a researcher at CRU International, and for over 10 years as a ... <Read more about Matt Craze>