John Kaiser of Kaiser Research believes Canada is about to have a "lithium awakening."
According to Kaiser, the market is moving past the 10-year bear market for the resources sector, which has had a particularly negative effect on juniors, and is now transitioning into what could be a potential decade-long bull market with lithium leading the charge.
Kaiser has been keeping a close eye on Canada's James Bay region, which he sees as a burgeoning area bet due to projects like Patriot Battery Metal’s Corvette, but James Bay lithium isn’t the only area gaining attention in Canada.
The US Inflation Reduction Act has elevated Canada's standing as a battery material manufacturer due to its proximity and trading ties with the US. Canada has announced investments totaling over $15 billion for critical mineral mining and processing, EV production, battery component manufacturing and the nation’s first gigafactory over the past 10 months, establishing the country as a major player in the EV battery supply chain.
There are several projects being developed across the country, including the North American Lithium (NAL) mine in Quebec, Canada, a joint venture between Australian lithium mining companies Sayona Mining and Piedmont Lithium.
The NAL recently produced its first batch of saleable lithium concentrate, becoming the most recent mining company in North America to begin production of lithium products. The first spodumene shipment from the mine is expected in July 2023, with four more scheduled for the first half of 2024.
Alberta is another Canadian province with a significant lithium resources that is poised to compete in the global lithium market, which is projected to triple in size by 2025.
Unlocking Huge Lithium Potential in Alberta
Alberta is another energy-friendly province that offers significant potential. Lithium developer and extraction technology pioneer E3 Lithium (TSXV:ETL) (OTXQC:EEMMF) just upgraded its Alberta-based Lithium Carbonate Equivalent (LCE) resource to 16.0 million tonnes (Mt) Measured and Indicated (M&I), including 6.6 Mt of LCE Measured and 9.4 Mt of LCE Indicated.
Natural Resources Canada states that the nation currently has an estimated 3.2 Mt of M&I lithium resources located in hard rock deposits, making E3 Lithium’s 16 Mt M&I resource the largest in Canada.
To accomplish the mineral upgrade, E3 used information from its 2022 drill program, ongoing reviews and analyses of core samples, and the development of a thorough geological model of the Bashaw District. This model offers a more complete representation of the reservoir's properties, leading to a more precise resource estimation.
According to the company’s Preliminary Economic Assessment (PEA), its Clearwater Lithium Project has an NPV 8% of US$1.1 billion with a 32% IRR before taxes and US$820 million with a 27% IRR after taxes.
E3 Lithium has also been focused on the in field pilot of ion exchange technology in the Clearwater Project Area, which is on track to begin construction and operation in Q3 2023. The next steps at the pilot plant include securing approval from the Alberta Energy Regulator, finalizing detailed design and engineering plans, publishing KPIs regarding expected performance, and initiating on-site equipment commissioning.
Through proactive exploration of commercially available and low-risk process and design options, E3 Lithium is optimistic about reducing the project development timeline and meeting its goal of launching a commercial plant by 2026.
The company is also well-funded to achieve its goals after receiving C$3.545 million from the Government of Canada's Critical Minerals Research, Development, and Demonstration (CMRDD) program and $4.9 million from the exercise of warrants from financings that closed in December 2020 and February 2021.
For more information about E3 Lithium Ltd (TSXV:ETL) (OTCQX:EEMMF), please visit this link or their website at e3lithium.ca.
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