Lithium - 2020 a year to forget but 2021 panning out to be a year to remember

2020 was a real struggle for lithium miners and chemical producers despite a strong start to the year in the first quarter. Lower prices in the second quarter (Q220) and Q320 made it difficult for some producers to survive the year and one didn’t! Altura Mining Limited didn’t manage to see the year out, as lower spodumene concentrate prices meant the company couldn’t meet its debt repayments and it went into receivership in late October 2020, despite raising A$11.2mln in equity just six months earlier. At the time it went under Altura had over A$190mln of debt on its balance sheet, which it had used to contribute to constructing the Pilgangoora Lithium operation, which has a nameplate capacity of 193 dry metric tons per hour (DMT/hr). But one company’s loss is another company’s gain and Altura’s longstanding Western Australian spodumene producing rival, Pilbara Minerals Ltd (ASX:PLS), acquired Altura’s Pilgangoora Lithium Project, for just US$175mln, which could prove to be a great deal for Pilbara in the mid-term as Altura invested over A$290mln (US$221mln) to build the lithium mine just a few years earlier. Through the Altura acquisition, Pilbara now has a controlling position in Western Australia. Both mines operate on different parts of the same orebody and the combination of the two projects gives Pilbara a total resource base of c. 276.5 million tonnes at a grade of around 1.2% Li2O, making it the second-largest spodumene deposit globally. But despite a difficult year SC6.0 spodumene concentrate prices ended 2020 in the range of US$400-430/tonne, with improved spodumene concentrate demand following a material uplift in lithium chemicals pricing within China towards the end of December 2020 and into early 2021. China domestic battery-grade lithium (Li) carbonate pricing is up 120% in April 2021 from its lows in July-October 2020 (Figure 1) and battery-grade lithium hydroxide up 100% since its January 2021 lows. Figure 1: Lithium Pricing Source: https://www.fastmarkets.com/commodities/industrial-minerals/lithium-price-spotlight Stronger energy vehicle sales are being forecast in both the EU and China during 2021, driving demand for both lithium carbonate and hydroxide, which should increase prices for lithium chemicals and spodumene concentrates over the course of the year. Several juniors are well-positioned to take advantage of a rally in the lithium market, including: Vision Lithium  Vision Lithium (CVE:VLI- OTC: ABEPF) is in the process of advancing its flagship Sirmac Lithium Project, located 180 kilometres (km) northwest of Chibougamau, in the province of Québec, and has recently acquired the Godslith Lithium Project, located 1km Northwest of Gods River, Manitoba (Figure 2). Figure 2: Vision Lithium’s Projects Source: Vision Lithium In mid-February this year, Vision extended the size of its Sirmac Lithium Project by staking an additional 131 claims (155 claims in total). The project now covers an area of 77km2 and is located about 200km south of the Whabouchi Lithium Mine in similar geology. Vision plans to continue exploration at Sirmac with a regional exploration programme and a c. 5,000-metre drilling programme, toward the middle of this year, to both identify new lithium-bearing dykes and to further define the known lithium-bearing dykes. Vision acquired the Godslith Lithium Project in mid-March of this year. The project has a historic (non-compliant) mineral resource estimate of 8.5 mt at a grade of 1.2% Li2O but hasn’t been drilled below a depth of 245 metres. Vision is planning an initial programme of prospecting and geological mapping followed by soil geochemical surveys designed to assess the area for additional pegmatite dykes. A follow-up diamond drilling programme of c. 15,000 metres to 20,0000 metres is also expected before the end of the year to test the lithium-bearing pegmatite below the historic drilling and along strike. Sigma Lithium Resources Corporation  Sigma Lithium Resources Corporation (TSX-V: SGMA) recently raised C$42mln to advance its Grota do Cirilo Lithium Project located in Minas Gerais, Brazil. Phase 1 of the project will see open-pit production (Figure 3) of 220,000 tonnes per annum (TPA) of battery grade spodumene concentrate at a low cost from 2022 with a Phase 2 expansion increasing production levels to 440,000 TPA in 2023. Figure 3: Proposed Site Layout Source: Sigma Lithium During 2021 the company expects to complete a whole host of important milestones, including publication of a preliminary economic assessment on the Phase 2 expansion, expected in the near term; increasing the mineral reserve estimate, expected in late-Q221; publication of the feasibility study for the Phase 2 expansion, expected early in Q321; and the commencement of the construction of the Phase 1 plant, which is likely to be later in Q321. Hawkstone Mining Ltd Hawkstone Mining Ltd (ASX:HWK) is advancing the Big Sandy Sedimentary Lithium Project located in Arizona, United States. Big Sandy currently has a total JORC-2012 compliant mineral resource estimate of 32.5mln tonnes at a grade of 1,850 parts per million (ppm) Li for around 320,800 tonnes lithium carbonate equivalent (LCE). Hawkstone has recently produced a lithium carbonate product of a 99.8% purity from the mineralisation at Big Sandy, meeting the specifications of major international battery manufacturers and exceeding Benchmark Mineral Intelligence’s battery-grade Li2CO3 at >99.5%. Hawkstone is following up this work with a full-scale bench-scale testing programme, estimated to take 3-4 months, which will assist in the design of a continuous-operation pilot plant, which is targeted for construction in Q421. A follow-up resource expansion drilling programme is expected to commence shortly, pending permit approvals. This programme will look to expand the defined extent of mineralisation to both the north and south of the existing resource estimate (Figure 4), where the exploration target is between 271mln tonnes and 483mln tonnes at a grade between 1,000 ppm and 2,000 ppm Li. The pilot plant studies and expansion drilling will culminate in the production of a pre-feasibility study in 2022. Figure 4: Planned drill holes at Big Sandy Source: Hawkstone Mining IronRidge Resources  IronRidge Resources (LON:IRR) has recently reported exciting drilling results from the first 8,986 metres of the 16,500-metre ongoing resource expansion and exploration drilling programme at its Ewoyaa Lithium Project, located in Ghana. Ewoyaa currently has a JORC 2012 compliant mineral resource estimate of 14.5mln tonnes at a grade of 1.3% Li2O. These results come from three new targets (Figure 5) that have not been previously drill tested with results including: 18 metres (m) at a grade of 2.24% Li2O from 39 m, including 14 m at a grade of 2.68% Li2O from 42 m and 7 m at 2.34% Li2O from 62 m (GRC0269A) 34 m at a grade of 1.54% Li2O from 32 m, including 13 m at a grade of 1.8% Li2O from 51 m and 1 m at a grade of 4% Li2O from 62 m (GRC0219) 36 m at a grade of 1.44% Li2O from 83 m, including 10 m at a grade of 1.8% Li2O from 87 m (GRC0221) 31 m at a grade of 1.59% Li2O from 31 m (GRC0223) 13 m at a grade of 1.86% Li2O from 34 m (GRC0199) 18 m at a grade of 1.75% Li2O from 42m (GRC0235) 12 m at a grade of 1.63% Li2O from 79 m (GRC0206) We would expect this programme to be completed in Q221 with assay results to follow thereafter. Figure 5: New areas of mineralisation defined at Ewoyaa Source: IronRidge Resources Infinite Ore Corp.  Infinite Ore Corp.’s (TSXV:ILI)(OTCQB:ARXRF) Jackpot Lithium Project is located in the Georgia Lake Area about 140 km north-northeast (NNE) of Thunder Bay, Ontario. The project has a historical resource (non-compliant) on the Dyke No. 2 pegmatite zone of 2mln tonnes at a grade of 1.09% Li2O and another historic resource of 0.75mln tonnes at a grade of 1.38% Li2O at the Newkirk-Vegan showing. Figure 6: Location of the Jackpot Lithium Project Source: Infinite Ore Corp. The location of the Jackpot Lithium Project is important as it is proximal to the Georgia Lake Lithium Deposit. Rock Tech Lithium Inc. is developing the George Lake Deposit and is planning to construct a lithium sulphate production facility in Thunder Bay, Ontario, which is likely to require additional feed. Infinite Ore Corp. recently commenced a high-resolution heliborne magnetic survey over the Jackpot Project to identify high priority lithium targets for future drilling and the results are expected imminently. This will be followed up, mid-year with a programme of surface sampling to refine targets ahead of a drill programme. Cornish Lithium  Cornish Lithium (PRIVATE:CORN) has a busy year ahead of it at both its United Downs geothermal lithium brine project and its Trelavour hard rock lithium project, both located in Cornwall, ahead of a potential stock market flotation in 2022. At the United Downs geothermal lithium project, a test-scale plant is expected to be operational in the second half of this year in time for the G7 meeting to be held in Cornwall while a pilot-scale plant is targeted to be operational by March 2022. The company is also expecting to complete a 2 km long drill hole this year, which will double the previously deepest hole at the project, to get additional data on both the lithium concentrations and the geothermal properties of the brines at depth. At the Trelavour hard rock lithium project, near St Austell, Cornish Lithium is around halfway through a drilling programme consisting of 1,500 m of diamond drilling and a 2,500 m of reverse circulation drilling. The programme is expected to be completed by May this year with a maiden resource estimate targeted for Q321. In parallel with this work, the company is also advancing its processing flow sheet and metallurgical studies for the project with pilot plant construction at this project due to commence before the end of the year. Figure 7: Trelavour hard rock lithium project Source: Cornish Lithium One World Lithium One World Lithium (CSE:OWLI) is advancing a lithium brine project, the Salar del Diablo project, located in the State of Baja California, Mexico. The company has commenced its DDH-3 hole, which is located around 50 km to the south of the previous drill holes (Figure 8). If the results are positive from DDH-3, One World Lithium plans to drill DDH-4 in the same area. Figure 8: Drill Holes at the Salar del Diablo Project Source: One World Lithium DDH-3 is believed to be in a 20,000 hectares area of hydrothermal activity, which can be a source of lithium in areas such as the Lithium Triangle in Chile and Argentina. DDH-3 is planned to sample brines or sediments where hydrothermal activity may have occurred, which is likely between 300 and 400 metres. One World Lithium also owns the right to purchase 100% of a lithium separation technology, which is currently being subject to a proof-of-concept study with results expected in the next two months. If positive the company will move ahead with design work for a pilot plant before the end of the year. This lithium separation technology has the potential to separate lithium carbonate directly from a lithium bearing-brine without the need for evaporation ponds.