1

Lithium Ionic’s Bandeira Project: A Game Changer in the World of Critical Minerals

In a significant news this morning, Lithium Ionic Corp. (TSXV: LTH | OTCQX: LTHCF) has announced the results of its Preliminary Economic Assessment (PEA) and an updated Mineral Resource Estimate (MRE) for its Bandeira project. Located in the mineral-rich state of Minas Gerais, Brazil, this wholly-owned project stands poised to make a seismic impact in the world of critical minerals and rare earths.

The PEA Findings

The PEA, independently completed by GE21 Consultoria Mineral Ltda with support from SNC Lavalin, unveils Bandeira’s promising potential. The project could be a massive producer of low-cost spodumene concentrate, ensuring its economic viability. Some key highlights include:

  • A post-tax NPV8% of $1.6 billion
  • An internal rate of return (IRR) of 121%
  • A rapid payback period of just 14 months
  • A 20-year mine life, with an average LOM annual production of 217,700t of spodumene concentrate at 5.5% Li2O equivalent

Expanded Mineral Resources

The updated MRE is no less significant. Bandeira’s M&I resources now stand at 13.72Mt grading 1.40% Li2O, and the Inferred resources amount to 15.79Mt at 1.34% Li2O. This growth was the result of extensive drilling, marking a 196% increase in the Indicated category from the last estimate.

Company Insights

Blake Hylands, the CEO of Lithium Ionic, commented on the PEA, stating, “We congratulate our team on advancing the Project to this stage in a short time span. Our aim remains clear: becoming the next major Brazilian lithium producer.” He believes that the PEA marks a significant step toward supplying top-quality spodumene concentrate to the global lithium and electric vehicle supply chains.

Hylands also highlighted the project’s environmental conscientiousness, adding, “Commencing with a highly attractive underground project will result in significantly less surface disturbance.”

On the other hand, Helio Diniz, the President of Lithium Ionic, emphasized the company’s drive, saying, “We believe that the best approach for all of our stakeholders is to develop a significant producing operation in the shortest possible time frame.”

Bandeira Project: An Overview

The Bandeira Project encompasses 175 hectares of Lithium Ionic’s vast 14,182 hectares land package. It’s situated between Araçuaí and Itinga in Brazil’s emerging “Lithium Valley”, hinting at its strategic importance.

The engineering design for the Bandeira project envisages dual underground mining operations. The primary orebodies, which make up about 90% of the deposit, will be extracted using the “sublevel stoping” method. In contrast, the secondary southeast orebody will be mined using the “room-and-pillar” technique.

Next Steps

With the PEA out, Lithium Ionic is gearing up for the next phases of the Bandeira project. A Definitive Feasibility and Environmental Impact Assessment is anticipated by the end of 2023. The company remains optimistic about the future, hoping that the Bandeira project will set the gold standard for further expansions and serve as a catalyst for more discoveries.




The Critical Minerals Institute October Report: A slowing global economy continues to temper demand

Welcome to the October 2023 Critical Minerals Institute (“CMI”) report, designed to keep you up to date on all the latest major news across the critical minerals markets. Here is the IEA list of Critical Minerals.

A slowing global economy continues to temper demand for critical minerals in 2023

High interest rates in most Western countries continue to be a drag on the global economy. Last month saw the U.S. Fed pause their interest rate hikes, with the reserve rate still at 5.5%. However, U.S. inflation has been rising again and the Fed has indicated rates will need to stay higher for longer. The September CPI was 3.7%, same as August’s 3.7%, but up on the July 3.2% figure. Long-term bond rates have adjusted higher leading to higher borrowing rates. All of this is slowing the U.S. and much of the global economy therefore not helping EV sales. China’s housing collapse is another negative drag on sentiment and has resulted in slower China EV sales growth in 2023.

Global critical minerals and electric vehicle (“EV”) update

October 2023 saw some better results coming in for global plugin electric car sales which gives some hope that depressed EV metals prices may soon start to recover. Q4 is traditionally the strongest quarter for EV sales with December usually the best sales month of the year.

Global plugin electric car sales were 1,238,000 in August 2023, up 45% on August 2022 sales. Global plugin electric car market share in August was 18%, led by China with 39% share, Europe with 30% share, and USA with 9.51% share. Reports to date suggest that September sales look like being another strong month of about 1.25 million.

2023 sales look set to finish at ~13.5 million and 17% market share, which would be a 28% increase on 2022 (10.522 million and 13% market share). A 28% growth rate in 2023 would be a significant slowdown on the 56% growth rate achieved in 2022.

Global plugin electric car ‘monthly’ sales in 2023

The West is working hard to build up EV and battery capacity rather than being too dependent on China

One of the biggest news of the last month was that Quebec, Canada is in talks with battery makers and automobile companies looking to invest about C$15 billion (US$11 billion) in Quebec over the next three years to support EV supply chains. The report stated:

Quebec has secured C$15 billion over the past three years and another C$15 billion is coming in the next three years…Over the past three years, Quebec has attracted investments from auto and battery makers such as General Motors, POSCO and Ford Motors. The biggest investment was announced on Thursday when Swedish battery maker Northvolt announced plans to build a $5.2 billion plant in the province.” 

While this is good news for the EV and battery manufacturers it does nothing to support the mining industry. It is similar to the U.S. Inflation Reduction Act, where most funds are going to auto and battery companies and very little to the upstream miners. This will only boost demand for critical minerals needed to feed the EV and energy storage booms. Very little is being done to address the looming supply deficits of these critical materials in the second half of the decade.

For example, there are 18 gigafactories planned to be built in the USA this decade, requiring 715,000tpa of lithium, but only 180,000tpa is currently planned. Similar mismatches of supply and demand exist in the pipeline for several other critical metals. Europe’s critical minerals supply chain looks even more dire.

China continues to dominate the EV and battery manufacturing industry

Many people might be unaware that China manufactures ~75-80% of all new global plugin electric cars and ~77% of global lithium-ion batteries. China’s BYD is the world’s largest seller followed by Tesla, who makes over 50% of their cars in China.

In 2022 China had 77% of the lithium-ion battery global capacity

Source: Visual Capitalist

Lithium

China lithium carbonate spot prices fell so far in October 2023, with the price now at CNY 166,500/t (USD 22,781/t) and down 68% over the past year. At these prices, some of the marginal producers in China have begun shutting down. We did get a glimmer of hope for a bottom this week (mid October) as lithium carbonate futures contracts in Guangzhou jumped by 7% to limit up for the day.

Lithium takeovers and equity interests are a leading trend in mid 2023

The biggest news the past month in the lithium sector has been the fight for control of Australia’s Liontown Resources Limited (ASX: LTR), who 100% own the near production Kathleen Valley Lithium Project in Western Australia. U.S. lithium giant Albemarle Corporation (NYSE: ALB) is currently doing due diligence after upping their offer to A$3.00 per share, or about A$6.6 billion (US$4.23 billion) to purchase all of Liontown Resources. However, in recent weeks Australia’s richest woman, Gina Rinehart, via her controlled company Hancock Prospecting, increased its stake in Liontown to 19.9%. Rinehart’s motives are not yet known but it appears the iron ore magnate has become very interested in lithium.

Only 2-3 months back Albemarle bought a 6.4% stake in Canadian lithium junior Patriot Battery Metals Inc. (TSXV: PMET | ASX: PMT | OTCQX: PMETF). The purchase price paid was C$109 million and it was made just one day after Patriot Battery Metals announced their Maiden Resource of 109.2 Mt @ 1.42% Li2O Inferred, the largest lithium spodumene resource in the Americas. The interesting part is that Patriot Battery Metals market cap is only US$866 million, 4.7x lower than Liontown Resources market cap of US$4.068 billion. Liontown Resources resource is about 50% bigger (156Mt at 1.4% Li2O) and about 4 years more advanced than Patriot Battery Metals Corvette Project. Nonetheless, if Albemarle decides to back away from the Liontown Resources takeover bid then there is a very good chance Albemarle will turn their takeover attention towards Patriot Battery Metals.

Mineral Resources Limited (ASX: MIN) has also been very active in 2023 in the lithium space. In September it was confirmed that Mineral Resources is bidding for the liquidated Bald Hill Lithium Mine. Mineral Resources has also backed Develop Global’s takeover offer for Essential Metals Limited (ASX: ESS) for A$152.6 million (US$101 million), plus Mineral Resources has also bought equity stakes in Delta Lithium Ltd. (ASX: DLI) and Global Lithium Resources (ASX: GL1).

Chile’s SQM (NYSE: SQM) also recently made a takeover offer for Azure Minerals Limited (ASX: AZS) for US$585 million.

All of this takeover activity from the major lithium companies suggests that we are near a bottom in the lithium price cycle and that the mid to long term outlook for lithium remains very strong.

Rare Earths

Rare earths supply disruptions have led to some price improvements recently. Neodymium (“Nd”) prices continued their recent recovery so far in mid October 2023 after a rough 2023, currently sitting at CNY 650,000/t.

Rare earths prices have been falling for most of 2023; however recent supply disruptions in Myanmar have caused most rare earth prices to strengthen. There have also been some reports that Malaysia is developing a policy to ban exports of rare earths raw materials so as to boost their domestic industry. There is no date given yet as to when a ban may start. In any event, Myanmar is a much more important supplier than Malaysia.

This month Australian Strategic Materials Limited (ASX: ASM) announced some world-class test work results with their terbium (Tb) and dysprosium (Dy) heavy rare earth separation test work. Pilot plant test work produced “>99.99% for Tb and > 99.95% for Dy1, at steady state”. Results like this from their Dubbo Project ore should give some more impetus to getting the Dubbo Project financed with probable output of around 140tpa Dy and 20tpa Tb. ASM Managing Director, Miss Rowena Smith stated:

“These excellent results demonstrate the strength of ASM’s advanced technical capability…Terbium and dysprosium oxides are not only scarce commodities they are very difficult to separate at high purity. With the continued expertise of the team at ANSTO and the welcome support of the NSW Government, we are positioning the Dubbo Project to be at the forefront of Australia’s rare earth and critical minerals evolution.”

Dysprosium is a key rare earth used in nuclear reactor control rods and neodymium-iron-boron permanent magnets used in many EVs and wind turbines. Terbium is used in fluorescent lamps and television and monitor cathode-ray tubes.

Cobalt, Graphite, Nickel, Manganese and other critical minerals

Cobalt prices (currently at US$14.84/lb) remained flat the past month and continue to be very depressed. China’s demand for NMC cathode material for EVs has been weak, not helped by the popularity of LFP cathodes that don’t use nickel or cobalt.

Flake graphite prices remain very weak with prices near the marginal cost of production. A combination of slower EV sales growth in 2023 and increased China graphite supply has led to a depressed graphite market.  Macquarie and others forecast graphite to start heading into deficit from about 2024.

Nickel prices have recently weakened further due to oversupply concerns from Indonesia and a slowing Chinese property sector.

Manganese prices remain weak mostly due to weak Chinese demand as the Chinese housing industry continues to rebalance after years of over construction and oversupply.

Longer term the outlook for the EV and energy stationary storage (“ESS”) sectors looks extremely strong. This is expected to lead to a huge surge in demand for the critical metals that supply these sectors.

EV sales are forecast to increase to somewhere between 62% and 86% market share of global car sales by 2030

Source: CleanTechnica courtesy Rocky Mountain Institute

Trend Investing v IEA demand forecast for EV metals

Source: Trend Investing and the IEA

Latest CMI events

  • Friday October 20, 2023 – CMI Masterclass: Critical Minerals in the Congo. Details and event tickets here.



Murchison Minerals is counting on Quebec’s integrated critical minerals strategy

With the latest EV battery materials facility announcement by Ford Motor Company (NYSE: F) and South Korean companies EcoPro BM Co. and SK On Co., it would appear Quebec is pushing hard to be a global competitor in the EV supply chain. Granted it was probably a pretty easy decision for Ford and its partners given the Federal and Provincial governments are investing a combined C$644 million of the estimated C$1.2 billion cost of the project. However, that should likely give a leg up for any critical material miners in Quebec who suddenly find themselves on the doorstep of a burgeoning EV battery hub in Bécancour.

One company hoping to take advantage of this situation is Murchison Minerals Ltd. (TSXV: MUR | OTCQB: MURMF), a Canadian‐based exploration Company focused on nickel-copper-cobalt exploration at the 100% – owned Haut-Plateau Manicouagan (HPM) Project in Quebec and the exploration and development of the 100% – owned Brabant Lake zinc‐copper‐silver (BMK) project in north‐central Saskatchewan. Murchison considers both the HPM and BMK projects to be top tier undervalued exploration projects, both with significant scale to host numerous deposits in areas that remain considerably underexplored. The projects are in two of the best mining jurisdictions in Canada and arguably the world.

As you can probably guess from the intro, today we are going to focus on the HPM Project. The HPM project consists of a massive 951 km2 land package. It is highly prospective to host nickel-copper-cobalt mineralization, particularly at the Barre de Fer (BDF) and Syrah targets, where significant mineralization has already been encountered. Other potential catalysts for the advancement of the HPM project include significant pre-existing infrastructure with a maintained highway, rail, and available hydropower (indicating any future production could be done with net zero emissions) all within kilometres. Combine that with the fact that the Government of Quebec is implementing a vertically integrated critical minerals strategy places HPM in a pretty solid position.

But all the promise in the world means nothing if there isn’t a commercially viable resource to develop. The Company believes that drill results at HPM speak for themselves and drill hole BDF22-002 is one of the top nickel sulphide intersections made at a pre-resource project globally over the last several years. The hole was drilled to a depth of 452 m and intersected two broad zones of Ni-Cu-Co sulphide bearing mineralization totaling 175.15 m of composite thickness including:

  • 121.20 m grading 1.36% NiEq. or 4.07% CuEq. (123.80 to 245.0 m)
    • Including 10.10 m at 2.78% NiEq. or 8.31% CuEq. (134.1 to 144.20 m)
    • Including 21.00 m at 3.21% NiEq. or 9.59% CuEq. (152.5 to 173.5 m)

    • Including 10.50 m at 1.76% NiEq. or 5.27% CuEq. (207.5 to 218.0 m)

Mineralization has now been intersected at BDF down to 475 m, over a strike length of 370 m and over a width of 200 m in multiple lens, individually up to 48 m thick. Beyond BDF, Syrah and PYC, regional prospecting has discovered 10 additional nickel sulphide outcroppings and subcroppings at surface including: Malbec, Dix, Taureau, Loup, and Orignal. Mineralization at Malbec is some of the highest tenor nickel discovered to date on the HPM property, along with intersecting semi-massive nickel-sulphide mineralization at the Taureau showing.

For 2023, Murchison is planning to follow up on last year’s positive drill results at the BDF zone as well as continue its prospecting activities property wide. Last week the Company announced the commencement of its 2023 summer exploration program at its Ni-Cu-Co HPM Project, which was delayed somewhat due to the wildfire situation in Quebec earlier this summer. The program is two-pronged with both prospecting on high-priority anomalies, and a deep penetrating ground electromagnetic (EM) survey being conducted.

The ground EM component will target nickel bearing sulphide mineralization at depth within the BDF Zone and the Syrah target. The detailed ground EM survey will utilize a low temperature (liquid helium cooled) super conductor technology called Jessy Deep SQUID (Super conducting Quantum Interference Device) technology. The Jessy Deep SQUID system is considered to be the most sensitive currently in use and Discovery Geophysics has exclusive rights to the technology in North America.

This type of EM system is an ideal survey type to identify so called “super conductors” which are electromagnetic anomalies that are too conductive to be effectively measured and identified by airborne EM systems. This super conductive phenomenon is typical in many of the world’s magmatic nickel mining camps such as Voisey’s Bay or Sudbury. The recent geophysical modeling at the BDF zone from borehole EM data demonstrates that this zone is indeed super conductive and Murchison strongly suspects a similar super conductor is being observed at the Syrah target making this geophysical survey critical for drill targeting.

Additionally, Murchison just closed C$1.5 million non-brokered private placement, which combined with the C$1.4 million in cash the Company had at the end of March, 2023 should provide sufficient capital to drive both HPM and BMK projects forward.

Murchison Minerals Ltd. trades at a market cap of C$9.6 million.




Russell Fryer of Critical Metals Plc Discusses Mining and Exploring for Critical Minerals in Africa

In this InvestorIntel interview during PDAC 2023, Tracy Weslosky talks with Russell Fryer, Executive Director of Critical Metals PLC (LSE: CRTM) about the critical mineral sector, specifically in the Democratic Republic of Congo (“DRC”) and Africa.

Russell addresses some misconceptions about operating mines in the DRC and how the DRC government is openly trying to attract Western capital to come in and compete with Asian investors.

He also talks about the investment opportunities in sub-Saharan Africa, including South Africa, Rwanda, Tanzania, and Zimbabwe. Russell also discusses the positive change in the UK government in attracting critical mineral supplies from African countries.

To access the full InvestorIntel interview, click here.

Subscribe to the InvestorIntel YouTube channel by clicking here.

About Critical Metals Plc

Critical Metals Plc has acquired a controlling 100% stake in Madini Occidental Limited, which holds an indirect 70% interest in the Molulu copper/cobalt project, an ex-producing, medium-scale asset in the Katangan Copperbelt in the Democratic Republic of Congo. In line with its investment strategy of focusing primarily on known deposits, targeting projects with low entry costs and the potential to generate short-term cash flow; the Company brought the Molulu Project into production in January. 

The Company will continue to identify future assets that are in line with its stated acquisition objective of low CAPEX and OPEX projects with near-term production, concentrating on minerals that are perceived to have strategic importance to future economic growth and generate significant value for shareholders.

To know more about Critical Metals Plc, click here.

Disclaimer: Critical Metals Plc is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp. (IIC) does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain“forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken,  as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at [email protected].




The Dean’s List – Part 2: What nickel company will benefit from Canada’s commitment to critical minerals?

Part 2: Canada Nickel Company Inc.

Last week we started a series to look at Canadian companies in the mining sector that could be impacted by Federal and Provincial government announcements with respect to critical materials, supply chain, EV battery manufacturing, etc. As a reminder, the province of Ontario first announced in March its strategy for ‘critical minerals’ followed shortly by a C$4.9 billion electric vehicle battery plant in Windsor, Ontario. This was followed in April by the Federal Government’s Budget 2022 proposing up to C$3.8 billion in support over eight years to implement Canada’s first Critical Minerals Strategy. The Fed’s followed this up in late June with a House of Commons Standing Committee on Industry and Technology report entitled: Positioning Canada as a Leader in the Supply and Processing of Critical Minerals.

I’ll start by saying I’m a little skeptical of how effective the Caandian Federal Government will be in doing anything useful to advance the cause of critical materials. But as long as it is a topic that appears to be at the forefront and politically in vogue, my simple hope is that they will at least stay out of the way and let smart, innovative people get on with doing what’s best for Canada and its allies.

With that in mind, I’m going to stick with Ontario companies for now as I feel there is a slightly better plan and path to success with the focus on all aspects of the value chain, from mining, to processing to end use (like the Windsor battery plant). Perhaps as this series progresses I’ll find it in my heart to cut the Federal government a little slack and explore some of our country’s non-Ontario companies… maybe. In the meantime, today we’re going to talk about another major ingredient in EV batteries – nickel.

As noted above, Ontario has already announced a C$4.9 billion EV battery plant, and the Provincial Government has stated their strategy is the encouragement of domestic processing and creating resilient local supply chains. In recent years, automakers have discovered that adding more nickel to the cathode can boost a battery’s energy density, which translates into more range per pound of batteries. Automakers have increased the percentage of nickel in cathodes to boost the batteries’ energy density and increase vehicle range with most now using cathodes that contain at least 60% nickel. Some use even more, in part to reduce or eliminate cobalt, and in part to increase density for premium applications. And to quote the infamous Elon Musk from a July 2020 Tesla earnings call: “Please mine more nickel… Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way.” Hopefully Stellantis and LG Energy Solution feel the same way.

And if they do happen to share Elon’s attitude towards nickel, one company that could be the beneficiary of all this is Canada Nickel Company Inc. (TSXV: CNC | OTCQX: CNIKF) which is advancing the Crawford nickel-cobalt sulphide discovery with large scale potential located in the established Timmins mining camp. Not only has the company recently announced an updated mineral resource estimate more than doubling the project’s Measured & Indicated (M&I) mineral resources but it is pursuing the development of processes to allow the production of net zero carbon nickel, cobalt, and iron products. I’ve got to think politicians around the world would be trying to make a company like this the poster child of the ‘green revolution’. And with the Ontario government’s commitment to exploring how to support R&D and access to and/or development of intellectual property related to critical minerals processing, perhaps Canada Nickel can tap into some government funding for its net zero initiatives.

Source: Canada Nickel Company Corporate Presentation

Based on PEA results, the company also boasts that once the mine reaches Phase III (approximately year 8), its peak production will among the top 5 nickel sulphide operations globally, with #1 being Norilsk in Russia and #2 Jinchuan in China. Additionally, Crawford is expected to be one of the largest base metal mines in Canada, surpassing Teck’s Highland Valley mine, Glencore’s Raglan operation in Quebec and Vale’s Voisey’s Bay operation. Once again, numbers like this should put Canada Nickel on the radar of any politician trying to ride the coattails of the critical minerals trend.

In April, the Company raised C$51.5 million, of which 37% was via flow-through shares. However, the deal closed 2 days before the effective date of the Federal Budget announcement of the Critical Mineral Exploration Tax Credit. Given the expenses haven’t been undertaken yet, I don’t know if Canada Nickel shareholders are in for an unexpected bonus of renounced flow-through expenses but I suspect it would sure be a welcome surprise. Regardless, this new, expanded tax credit is still a tool available to Canada Nickel and all Canadian critical mineral explorers for raising capital on or before March 31, 2027.

To repeat what I said at the end of Part 1, as long as governments don’t get in the way of their good intentions, we could be on the verge of a golden era for critical mineral explorers, miners and processors in Canada. To that end, we will continue to look at companies that find themselves positioned to take advantage of this renewed focus on the security of supply to exploit Canada’s abundance of valuable critical minerals in a responsible, ESG-friendly manner.