Base and Battery metals Snapshot: Eight companies to watch

As the world continues to electrify and concerns escalate around the supply of raw materials, including copper, zinc, lithium, and PGMs, required for the transition away from fossil fuels, base and battery metal explorers and developers are attracting increasing interest from investors. Below are eight companies operating in the space.

AMERIWEST LITHIUM

Ameriwest Lithium (CSE: AWLI: US-OTC: AWLIF) is an exploration and development company with a portfolio of lithium projects in the southwest of America. These include Railroad Valley, Clayton Valley, and Edwards Creek Valley in Nevada, and Thompson Valley in Arizona.

In March, the Vancouver-headquartered company announced the acquisition of a further 108 line-km of high-quality seismic data with the view to drilling at Railroad Valley this year. The greenfields project is located approximately 77 km northeast of Ely.

The acquisition brings the total line-km of data acquired to date to approximately 135 km, it said, and was acquired to cover the recently expanded 61.9-sq.-km property, on which Ameriwest is searching for lithium.

That same month, the company released results from a second-phase magnetotelluric (MT) geophysical survey completed on Railroad Valley. Incorporated with the findings from the company’s initial MT survey, the results demonstrated the potential for the property to host a large lithium deposit, Ameriwest says.

While Railroad Valley is geologically similar to the nearby Clayton Valley project, the company says it represents a new and virtually unexplored target.

It also announced the staking of an additional 414 claims at its Edwards Creek Valley property, increasing the number of claims to 1,243 and expanding the size of the project to about 903 sq. kilometres.

The company believes Edwards Creek Valley, about 193 km east of Reno, has the potential to host a large lithium brine deposit based on geophysical studies completed on the project to date.

“We are extremely excited to have discovered a large gravity low during our recent gravity geophysical program at the ECV [Edwards Creek Valley], and we have now expanded our claims to encompass the entire gravity low. We believe this low may have potential to host brine deposits similar in characteristics to those located in Clayton Valley, Nevada, subject to exploration success,” David Watkinson, Ameriwest’s chief executive, commented in a Mar. 2 press release.

Ameriwest Lithium has a market cap of $45.5 million.

ARIZONA METALS

Arizona Metals (TSXV: AMC; US-OTC: AZMCF) holds a 100% interest in the Kay polymetallic mine and Sugarloaf Peak gold projects in Arizona.

The Toronto-based junior is focused on advancing its flagship Kay copper-gold-zinc-silver mine in Yavapai County, immediately adjacent to the town of Black Canyon City and approximately 69 km north of Phoenix. The mine lies in an established mining district with 60 past-producing operations within a 150-km radius.

In April, Arizona Metals released assays from two drill holes from its second-phase drill program on the project.

Hole KM-21-60 intersected 93.3 metres grading 1.36% copper, 3.25% zinc, 5.65 grams gold per tonne, and 32.6 grams silver per tonne (8.3 grams gold-equivalent per tonne) starting from 557 metres downhole, including 17.5 metres of 5.22% copper, 4.71% zinc, 25.37 grams gold, and 100.6 grams silver (29.6 grams gold-equivalent).

The company said the hole was drilled in the central portion of the deposit and demonstrated excellent continuity of mineralization between holes KM-21-26, KM-21-28, KM-21-25A, KM-21-57A, and KM-21-40, and returned the highest-grade gold value yet on the project at 1.2 metres of 273 grams gold from 634.3 metres.

Hole KM-21-57B cut 125.3 metres grading 2.4% copper, 1.29% zinc, 0.9 gram gold, and 18.7 grams silver (3.2% copper-equivalent) from 736.7 metres, including 1.8 metres of 9.42% copper, 0.32% zinc, 2.37 grams gold, and 8.5 grams silver (9.9% copper-equivalent).

That hole demonstrated continuity and extension of mineralization between holes KM-21-26, KM-21-28, KM-21-25A, KM-21-40, and KM-21-58B, and intersected the highest copper value to date, returning 1.5 metres of 20.7% copper from 802.2 metres, it said.

Assays from an additional 20 holes are pending.

The company now plans to drill up to 20 holes totaling 11,000 metres at the Central Target, approximately 200 metres west of the Kay mine deposit.

Arizona Metals’ other project, the Sugarloaf Peak gold deposit in La Paz County, approximately 10 km southwest of the town of Quartzsite, contains a historic resource of 1.5 million oz. of gold at a grade of 0.5 gram gold per tonne.

Arizona Metals has a market cap of $590.3 million.

E3 LITHIUM

E3 Lithium (TSXV: ETMC; US-OTC; EEMF), which is changing its name from E3 Metals, is an Alberta-focused emerging lithium and direct lithium extraction (DLE) technology developer.

In April, the Calgary-based company announced that it had engaged an engineering firm to start design work for its field pilot plant, which utilizes its proprietary sorbent. It said the goal of the field pilot is to demonstrate the near-commercial-scale and modular design of the company’s ion-exchange DLE process under real world operating conditions.

E3 said that the combination of its sorbent technology with a scaled-up ion-exchange system operating in real world conditions is an important step towards de-risking and demonstrating the DLE process and technology at a commercial scale.  

The company said the field pilot will be tied into an existing well that produces brine directly from the Leduc aquifer at its Clearwater lithium project in southern Alberta and will be a major milestone in unlocking the value of the project.

E3 anticipates the design and final cost estimate to be completed within the next six months, with construction to follow soon after.

The initial plan for the field pilot will be to operate in the Leduc aquifer over a six-month period to collect and analyze data to further validate the technology and operating parameters.

An updated preliminary economic assessment (PEA) for Clearwater released in September 2021 envisaged a 20-year project producing 20,000 tonnes of lithium hydroxide per year. The early-stage study estimated an after-tax net present value of US$819.9 million, and after-tax internal rate of return of 27%. The study used an 8% discount rate and a lithium hydroxide monohydrate price of US$14,079 per tonne.

The PEA pegged initial capital costs at US$602 million and average annual operating costs at US$73.2 million over the life of the project. Initial capital would be paid back in 3.4 years.

E3 Metals has a market cap of $117.8 million.

ION ENERGY

Toronto-based ION Energy (TSXV: ION; US-OTC: IONGF) is focused on exploring and developing lithium salars (salt flats) in Mongolia, including its 100%-owned Baavhai Uul and Urgakh Naran lithium brine projects.

In May, the company announced a significant discovery at the highly prospective, 290-sq.-km Urgakh Naran property in the South Gobi Desert. The property covers an area 6 km wide and more than 20 km long in the central part of the Urgakj Naran basin, approximately 30 km from the Mongolia-China border.

A lithium brine sample, collected from a surface evaporation pond, assayed 918 mg per litre lithium — the highest-grade lithium brine known to have been collected in Mongolia, according to ION.

“These exceptional early results are extremely exciting for all stakeholders, they reinforce the company view that high-quality lithium brines could be discovered at the Urgakh Naran lithium project,” Ali Haji, ION’s chief executive, said in a May 9 press release announcing the discovery.

The company has now completed 72 auger drill holes for a total of 820.5 metres and collected 427 geochemical samples including brine samples on the property. It has also completed seven of the eight planned transient electromagnetic (TEM) geophysical lines for a total of 88 line-km.

ION now plans to complete an additional 38 auger holes and 8 line-km of TEM. Following completion of the current geophysical and shallow auger hole program, it plans to sink a series of targeted holes to test brine potential at depth.

It also plans to advance its flagship 811-sq.-km Baavhai Uul project, which represents the largest and first lithium brine exploration licence awarded in Mongolia, the company says.

In December, ION completed an initial drill program on the property comprising 222 auger drill holes totalling 1,304.5 metres.

The drilling led to a new discovery at the White Wolf prospect. Highlights included drill hole AU-20, which returned an average 650 parts per million (ppm) lithium from between 4-6 metres in depth, with the last sample in the hole returning 860 ppm lithium.

Ion Energy has a market cap of $19.3 million.

MKANGO RESOURCES

Canadian exploration and development company Mkango Resources (TSXV: MKA; US-OTC: MKNGF) is focused on advancing its 100%-owned Songwe Hill rare earths project in southeastern Malawi, approximately 70 km from the country’s former capital Zomba and 90 km from the commercial centre of Blantyre.

In March, Mkango announced that it had produced neodymium and praseodymium-enriched rare earth carbonate on a pilot basis from the project, where it is working towards finalizing a feasibility study.

William Dawes, the company’s chief executive, said in a Mar. 7 press release that completion of piloting was another major milestone for the development of Songwe and the related Pulawy separation plant in Poland. Dawes said the milestone “puts Mkango in a rare class of having an independent rare earths project at this advanced stage of development.”

He noted that through the company’s investments across the supply chain, Mkango “is uniquely positioned to be a future producer of rare earth oxides, recycled alloys and magnets, the latter through its 42% strategic interest in short loop rare earth magnet recycler, HyProMag.”

Songwe Hill is expected to have an 18-year mine life with an initial capex of US$216 million, according to a pre-feasibility study conducted in 2015. At a 10% discount rate, the project would generate a post-tax net present value of US$345 million and an internal rate of return (IRR) of 37%.

The feasibility study, due out mid-year, will include processing of ore on site to produce rare earth carbonate, while the rare earth carbonate will be processed at Mkango’s proposed separation plant in Poland to produce separated neodymium and praseodymium oxides.

The project contains 21 million measured and indicated tonnes grading 1.41% total rare earth (TREO) oxides in 297,400 tonnes of TREO and inferred resources of 27.54 million tonnes grading 1.33% TREO in 366,200 tonnes of TREO.

Mkango Resources has a market cap of $75.3 million.

NICKEL CREEK PLATINUM

Nickel Creek Platinum (TSX: NCP; US-OTC: NCPCF) is focused on advancing its 100%-owned Nickel Shaw PGM-copper-nickel advanced exploration project in the Yukon, approximately 317 km northwest of Whitehorse.

In April, the company announced that its 2022 exploration program is intended to provide data for the completion of a prefeasibility study on the project. It said the work will include PFS drilling on the Wellgreen deposit to support conversion of inferred resources to indicated resources and collect additional geotechnical and hydrogeological data.

The program would also collect additional information to characterize proposed waste dump and tailings sites. Further drilling is also planned at the Arch exploration target to define the extent of mineralization.

A 2018 mineral resource estimate for Nickel Shaw outlined 323.4 million measured and indicated tonnes grading 0.26% nickel, 0.16% copper, 0.015% cobalt, 0.255 gram palladium per tonne, 0.253 gram platinum, and 0.046 gram gold for 1.9 billion lb. contained nickel, 1.1 billion lb. copper, 107 million lb. cobalt, 2.6 million oz. platinum, 2.6 million oz. palladium, and 480,000 oz. gold.

Inferred resources add 108.1 million tonnes grading 0.29% nickel, 0.15% copper, 0.016% cobalt, 0.256 gram platinum, 0.279 gram palladium, and 0.04 gram gold for 691 million lb. nickel, 357 million lb. copper, 38 million lb. cobalt, 890,000 oz. platinum, 907,000 oz. palladium, and 139,000 oz. gold.

In November, Nickel Creek released results from its 2021 drilling and geophysics program on the property. The drilling consisted of 12 holes (1,247 metres), of which nine holes (974 metres) were drilled from two separate drill platforms approximately 100 metres apart on Arch, and intercepted massive sulphide intervals.

Highlights from the drilling included hole ASD21-008, which intersected 2.09 metres grading 3.68% nickel, 1.14% copper, 0.07% cobalt, 0.7 gram platinum per tonne, 1.3 gram palladium, and 0.02 gram gold starting from 86.17 metres downhole.

The geophysics showed untested conductive plates down-dip and down-plunge of current drilling, the company said.

Nickel Creek Platinum has a market cap of $36.9 million.

NORTHERN GRAPHITE

Northern Graphite (TSXV: NGC; US-OTC: NGPHF) owns a portfolio of assets in Canada and Namibia.

The Ottawa-based junior’s focus is on its flagship 100%-owned Bissett Creek graphite project in Ontario, approximately 100 km east of North Bay and 140 km west of Ottawa. The company plans to make the project carbon neutral.

In March, Northern Graphite announced an update to an ISO-compliant life cycle assessment by raw materials experts Minviro Ltd. on the production of graphite concentrate from the project. The update includes the benefits of using an electric mining fleet at the property.

Using electricity from the Ontario grid to power the mining fleet (rather than diesel) and the processing plant (instead of natural gas) could, Minviro estimated, reduce the global warming potential of Bissett Creek by approximately 80%, from 2.2 kg of carbon dioxide-equivalent per kg of graphite processed to 0.45 kg CO2 equivalent per kg.

Minviro estimated that lithium-ion battery anode material, also called coated spherical purified graphite (CSPG), manufactured from Bissett Creek mine concentrates under the optimized scenario, would have a carbon footprint of 6.3 kg of CO2 equivalent per kg of product.

In comparison, the carbon footprint of Chinese CSPG produced from natural graphite is estimated at 16.8 kg of CO2 equivalent, and 17 kg of CO2 equivalent if produced from synthetic graphite. (Northern Graphite noted that the Chinese estimates did not include the carbon footprint of transporting CSPG to North America.)

A feasibility study for Bissett Creek outlined the establishment of a mine and mill that would produce 20,000 to 25,000 tonnes of concentrate annually.

The deposit contains measured and indicated resources of 69.9 million tonnes grading 1.74% graphitic carbon or 1.2 million in situ tonnes of graphite. Inferred resources add 24 million tonnes grading 1.65% graphitic carbon for 396,000 tonnes of graphite.

In April, the company also announced that it had acquired the Lac des Iles mine in Quebec, approximately 180 km northwest of Montreal, the only operating graphite mine in North America, and the Okanjande graphite mine in Namibia, which is currently on care and maintenance.

Northern Graphite has a market cap of $76.4 million.

WORLD COPPER

World Copper (TSXV: WCU; US-OTC; WCUFF) is an exploration and development company with two copper assets, one in Chile, and one in Arizona.

The Vancouver-headquartered junior is focused on advancing its Escalones copper project in Chile, approximately 97 km southeast of Santiago and 9 km west of the border between Chile and Argentina.

The 70-sq.-km property sits within the renowned Chilean porphyry copper belt that runs north-south in the central Andes Mountains. It is about 35 km from Codelco’s El Teniente mine, one of the world’s largest underground copper mines.

In March, World Copper received approval for the next phase of drilling on the project and is permitted to drill up to 11 diamond drill holes totaling up to 5,000 metres.

The company released a preliminary economic assessment (PEA) for Escalones in February that outlined a 50,000 tonne-per-day open pit mine and heap-leach operation that will treat a total of 365.8 million tonnes of mineralized material over a 20-year mine life.

Copper would be recovered from the pregnant leach solution using solvent extraction and electrowinning technologies, with an estimated copper recovery of 72.5%.

The early stage study estimated average annual copper production during the first five years of operation will be 124.7 million lb. at an all-in sustaining cost (AISC) of US$1.42 per lb. of copper. At a copper price of US$3.20 per lb and using an 8% discount rate, the resulting after-tax net present value is estimated at US$1.5 billion, with an internal rate of return of 46.2%.

Initial capital costs stand at US$428.4 million, with US$192.5 million budgeted for sustaining capital over the life of the mine. The initial capital outlay would be paid back in 2.2 years.

The PEA was based on inferred resources of 426.2 million tonnes grading 0.367% copper for 3.4 million contained lb. of acid soluble copper.

“Escalones has several attributes that make it attractive for development including robust economics, strong value metrics and the potential of rapid returns for a comparably low capital investment,” said Nolan Peterson, World Copper’s chief executive, in a press release.

“These factors combine leading to a profitability index in the top quartile of peer group companies with a capital intensity in the bottom quartile. Furthermore, the project’s lowest quartile position on the global cash cost curve indicates profitability in even the weakest copper market scenarios.”

World Copper has a market cap of $36.7 million.