Source: Streetwise Reports
September 6, 2023 (Investorideas.com Newswire) Geologists and hydrologist consultants from WSP Australia are working closely with Spey Resources Corp. to finalize a resource estimate for the company's flagship Candela II project in Salta Province in South America's Lithium Triangle. Read to see why one newsletter writer called Spey a "smart money play."
Geologists and hydrologist consultants are working closely with Spey Resources Corp. (SPEY:CSE; SPEYF:OTC; 2JS:FRA) to finalize a resource estimate for the company's flagship Candela II project in South America's Lithium Triangle.
Spey recently engaged WSP Australia to produce the estimate from five drill holes completed in 2021 and an initial National Instrument 43-101 report published last year.
Significant low-resistivity areas identified below the depth of the initial drill program in magnetotelluric (MT) survey results have been interpreted as potential aquifers.
"A rigorous analysis of the porosity of core samples and proximity to aquifers in the area has been undertaken, and WSP ... believe(s) it will be able to publish the report in the next few weeks," the company said in a release.
Low electrical resistivity can be caused by the presence of highly salty water that contains electrical conductors such as lithium and potassium, an element in high demand to help fuel the green energy transition.
"Based on the recent results from assays (of 174 parts per million or ppm) lithium, exploration drilling, and geophysical surveys, the aquifers underlying the Candela II concession are saturated with a concentrated lithium brine," wrote the NI 43-101 report's author, geologist Michael J. Rosko.
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$15 billion. The Incahausi Salar is home to Jiangxi Ganfeng Lithium Co. Ltd. (GNENF:OTCMKTS; 002460:CH), Allkem Ltd. (OROCF;OTCMKTS), Power Minerals Ltd. (PNN:ASX; PEIMF:OTCPK), and Patagonia Lithium Ltd. (PL3:ASX)
Because of this, Golden Opportunities 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 (an inferred) resource - and access to an extraction process (Ekosolve) that could give it a huge competitive advantage," it wrote.
The Catalyst: EV Batteries
Lithium is a soft, silvery metal with highly reactive and flammable properties. It's a major component of EV batteries, where it is used as a cathode and electrolyte. It's also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.
The global lithium market is expected to grow globally from US$37.8 billion in 2022 to US$89.9 billion in 2030, 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.
Analysts from Eight Capital also predicted that lithium market deficits will widen this decade, and the shortfalls will be driven by demand in North America.
The United States' EV penetration of 6% lags China's 26% and Europe's 20%, analysts Anoop Prihar and Alex Riazanov of Eight Capital wrote in a recent research note. But President Joe Biden's administration has committed to a target of 50% of new vehicle sales being EVs by 2030.
"We estimate North American lithium nameplate production capacity will be 262,900 LCE (million tonnes lithium carbonate) in 2026 based on projects that currently have completed a Definitive Feasibility Study (DFS)," Prihar and Riazanov wrote. "Although this is a significant increase from the current North American production capacity of 6,000 tonnes LCE, it's still more than 128,000 tonnes short of what we anticipate will be required by the battery plants. As such, we anticipate the fundamentals underlying lithium demand to remain robust."
Joint Venture for Development
Spey is also drafting a joint venture shareholder agreement with AIS Resources SA for the development of the Candela II concession, with Spey holding an 80% interest and AIS holding a 20% interest.
The next milestone will be a production well and two exploration wells to conduct a brine release test and specific yield test, the company noted.
SouthernRock Geophysics completed the Magnetotelluric geophysics surveys on three lines at the site in Argentina.
"The results show a low resistivity zone that extends to the eastern border of Candela II and extends from Line L7312200 to Line L7309700, a distance of approximately 2.5 (kilometers)," the company said. "The survey penetrated to 4,000 meters depth. The conductive lithology units show a unit approximately 300 meters in thickness about 50 meters below the surface, which is the aquifer intercepted when drilling in 2021."
MT surveys measure and map the sub-surface of a project using natural time variations of the Earth's magnetic and electric fields. The data 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.
Five holes were drilled at the Incahuasi Salar project in 2021. Lithium brine values of 153 parts per million (ppm) and 174 ppm were assayed from two holes, DDH4 and DDH5.
The company sees a path to production at the project in the next 18 to 24 months.
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$0.03, with a current market cap of CA$3.89 million. Approximately 116 million shares are outstanding, with about 114 million free-floating.
The company is covered by newsletter writer Clive Maund and Brien Lundin of Gold Newsletter.
About 4.7% of the company is owned by insiders, including Director Lawrence Hay, who owns 2.11 million shares, and Chief Executive Officer and lithium brine geologist Phillip Thomas, who owns more than 2 million shares. The rest is retail.
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