Lithium Explorer to Start Geophysical Survey at Argentina Project
Source: Streetwise Reports
May 16, 2023 (Investorideas.com Newswire) Spey Resources is starting a magnetotelluric survey of its Lithium Triangle flagship to identify drill targets and start a resource estimate.
Spey Resources Corp. (SPEY:CSE; SPEYF:OTC; 2JS:FRA) is about to start a magnetotelluric survey of its flagship Candela II project at Incahuasi Salar in South America's Lithium Triangle as the rush continues to find more of the metal powering the batteries of the green revolution.
The company also announced that it has hired WSP Australia to produce a resource estimate for the property, which counts Jiangxi Ganfeng Lithium Co. Ltd. (002460:CH), Allkem Ltd. (OROCF;OTCMKTS), and Livent Corp. (LTHM:NYSE) among its neighbors.
The Lithium Triangle is also home to some other major lithium miners, including Albemarle Corp. (ALB:NYSE) and SQM (SQM:NYSE), which both have market caps over US$20 billion.
Because of this, Brien Lundin, editor of the Gold Newsletter, has called Spey "a smart money play."
"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 (Ekosolve) that could give it a huge competitive advantage," Lundin wrote.
The lithium market is expected to grow globally from US$3.83 in 2021 to US$6.62 billion in 2028, a compound annual growth rate (CAGR) of 8.1%, according to a report by Fortune Business Insights.
"The growing adoption of hybrid and electric vehicles (EVs), high-drain portable electronics, and energy storage systems has had a huge impact on the growth of the overall market," the report said. "Governments in several countries across the world are implementing strict emission standards to reduce and control carbon emissions."
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.
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.
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.
The Catalyst: A Resource Estimate and Drilling Targets
Magnetotellurics use natural time variations of the Earth's magnetic and electric fields to measure and map the sub-surface of the project.
Southern Rock Geophysics will start the magnetotelluric survey for Spey on or about May 18, and it will take about five days, Spey said. Results are expected in about four to six weeks.
Once the data is received, it will be used to define the next exploration well and production well locations, as well as contribute to the resource estimate data, the company said.
Meanwhile, EC Asociados has commenced an environmental baseline study in preparation for further drilling. A social survey was also recently completed of the Tolar Grande community, which is about 45 kilometers away from Candela II. Both of these studies will add to an existing environmental plan Spey filed with the Salta Mining Court on last December.
WSP Australia was chosen after reaching out to several firms. The company was chosen because of its expertise, experience, and skill, Spey said. The work WSP did at Ioneer Ltd.’s Rhyolite Ridge project in Nevada impressed senior Spey management.
Spey 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.
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.
A Lithium Play You'll Want 'On Your Short List'
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 company sees a path to production at the project in the next 18 to 24 months.
"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. [OWNERSHIP_CHART-9685]
In addition to being used in EVs and other batteries, lithium is also used to strengthen alloys, as a high-temperature lubricant, in commercial glass to reduce heat expansion, and as a drug to treat bipolar disorder.
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$0.40 to CA$0.035, with a current market cap of CA$5.34 million. Approximately 111 million shares are outstanding, with about 109 million free 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.
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