Explorer Building Resource Estimate in Lithium Triangle
Source: Streetwise Reports
April 24, 2023 (Investorideas.com Newswire) Spey Resources Corp. is working toward a potential resource estimate for its flagship project in South America's Lithium Triangle, Candela II.
Spey Resources Corp. (SPEY:CSE; SPEYF:OTC; 2JS:FRA) is working toward a potential resource estimate for its flagship project in South America's Lithium Triangle, Candela II.
The company has secured a contractor to begin a magnetotelluric (MT) survey this month at its Incahuasi Salar property in Argentina, where five diamond drill holes were sunk in 2021. Hole No. 5 intersected an aquifer that was able to sustain pumping at the maximum pumping rate. Ganfeng Lithium Co. Ltd.'s production well is only 9.8 kilometers away.
The company filed a National Instrument 43-101 report last summer, which noted that the project was open for exploration.
"Based on the recent results from exploration drilling and geophysical surveys, the aquifer underlying the Candela II concession is saturated with a concentrated lithium brine," wrote the report's author, geologist Michael J. Rosko.
Spey has also designed a request for a proposal system for companies to bid on preparing the resource estimate study. It said it had received five responses so far and is close to receiving final bids. Before completing the inferred, indicated, and measured resource work, one or two exploration wells might be sunk, as well as an 8-to-12-inch pumping well. The company may also complete a Borehole Magnetic Resonance (BMR) geophysics study to measure porosity.
Spey has several projects in the triangle - the area where Argentina, Chile, and Bolivia meet. The lithium here is extracted from brines rather than hard rock. This new "white gold," an essential element in electric vehicle (EV) batteries, is helping to power the new green economy.
Spey's subsidiary New Tech Lithium has acquired a production license using the Ekosolve Direct Lithium Extraction process. Pilot plant work has revealed an extraordinary recovery of more than 93% of the lithium contained in the brines, which were approximately 174 parts per million (ppm) from Hole DDH 5.
The Lithium Triangle is also home to some major lithium miners, including Albemarle Corp. (ALB:NYSE) and SQM (SQM:NYSE), which both have market caps over US$20 billion.
That's why Brien Lundin, editor of the Gold Newsletter, called Spey "a smart money play" last fall.
"Spey is at home among these giants because it has a project in Candela II that's on its way to having a resource - and access to an extraction process that could give it a huge competitive advantage," Lundin wrote.
The company is using the newly developed solvent exchange system developed by the University of Melbourne in Australia, and researchers called Ekosolve™. Older projects use evaporation, while more recent projects use resins, reverse osmosis, or membranes to extract the lithium from the brine. All have issues with high magnesium found in the brines except Ekosolve - it uses solvent exchange technology, which is common in many copper, rare earths, and uranium extraction projects.
Recent production testing by the University of Melbourne and Ekosolve™ resulted in a 96% recovery rate and the extraction of 99.5% pure lithium carbonate in a matter of minutes using their multiple fast-pass technology.
The Catalyst: A Great Neighborhood
Candela II is in the vicinity of well-known lithium salars like Arizaro, Pocitos, Rincon, Pozuelos, Pular, Cauchari, and Olaroz, in Salta Province in Argentina. Spey has an 80% ownership interest in the project, and A.I.S. Resources Ltd. (AIS:TSX.V) has a 20% interest.
The NI 43-101-compliant drilling summary said Spey had extracted 3 x 200-liter samples and completed assays and testing using the Ekosolve™ process.
Lithium carbonate was produced from a sample with a purity of 99.5%, which had 173 ppm lithium. The off-taker, Richlink, who has signed a framework agreement for 10,000 tonnes per year, wants lithium chloride, which is the primary product produced by the Ekosolve process.
Ekosolve is unique in that it uses only 2,500 liters of water per tonne of lithium chloride produced. Spey Chief Executive Officer Phil Thomas will be meeting with the company in China in June for further talks about offtake contracts, production, and financing.
The company sees a path to production at Candella II in the next 18 to 24 months. The next steps are to complete the MT geophysics, drill to confirm the size of the resource and commission the resource calculation.
"With the lithium market providing strong tailwinds, Spey Resources is a lithium play you'll want to put on your short list of lithium names to leverage the trend," Lundin wrote.
Supply Will Fall Short
The deficit between lithium demand and production and highly probable and probable lithium projects will be over 3.5 Mt by 2040, according to Benchmark Mineral Intelligence. There are currently 216 gigafactory projects either built or being planned to meet this battery demand.
Lithium is a soft, silvery metal used for its heat-resistant properties. In addition to being used in EV and other batteries, it is used to strengthen alloys, as a high-temperature lubricant, in commercial glass to reduce heat expansion, and as a drug to treat bipolar disorder.
Ford and General Motors have set a goal of achieving 40-50% of their sales from EVs in the U.S. by 2030. Global electric vehicle sales reached 10% of all new cars sold in 2022, an increase from 8.3% in 2021. [OWNERSHIP_CHART-9685]
To qualify for tax credits under new U.S. laws, a significant percentage of batteries and minerals in batteries must come from the U.S. or Canada.
China has less than a quarter of the world's lithium resources but controlled about two-thirds of the world's lithium processing and refining capacity in 2021, Rystad Energy said.
Ownership and Share Structure
Spey trades on the Canadian Securities Exchange under the symbol SPEY and on the U.S. OTC market as SPEYF. Over the last year, it has traded in the range of CA$0.375 to CA$0.035, with a current market cap of CA$4.27 million. Approximately 107 million shares are outstanding, with about 105 million floating.
The company is covered by newsletter writer Clive Maund and Brien Lundin of Gold Newsletter. Click "See More Live Data" in the data box above to view more of what they are saying.
About 4.7% of the company is owned by insiders, including Director Lawrence Hay, who owns 2.11 million shares, and CEO Thomas, who owns more than 2 million shares. The rest is retail.
1) Steve Sobek wrote this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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