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The Fast Track to Lithium Production

Jeff Nielson Jeff Nielson, Stockhouse
2 Comments| December 5, 2017


Click to enlargeBy now, most metals investors are thoroughly familiar with “the lithium story”. The rise of the electric vehicle market has meant a spike in demand for the lithium-ion batteries that power such vehicles. In turn, this is creating an enormous surge in demand for many metals and minerals – including lithium.

Because of this surge in demand for lithium, there has been a commensurate increase in the number of junior mining companies that are exploring for prospective new sources of this metal. The majority of these junior lithium companies are exploring for lithium via “lithium brine projects”.

In arid climates, mineralization (including lithium) will collect in the water that accumulates in closed basins. The high level of evaporation that occurs in such climates concentrates this mineralization over time. The end result of this evaporation process is often a deposit of lithium that can be “mined” from the brines that evolve in these basins.

However, while such brine deposits may be the most plentiful sources for lithium, this doesn’t necessarily mean that these prospects are the best way to explore for (and produce) lithium. The other way to produce lithium is through conventional hard-rock mining.

Equitorial Exploration Corp. (TSX: V.EXX, OTCQB: EQTXF, FSE: EE1, Forum) is exploring for lithium through both hard-rock and lithium brine projects. The Company is currently active in four jurisdictions: the Northwest Territories (Canada), Manitoba (Canada), Utah (United States), and Nevada (United States). In a recent conference call with Stockhouse Editorial, the management team of EXX explained why their primary focus is currently on the Company’s two hard-rock properties.

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Hard-rock lithium mining is very much like other conventional metals mining, with one important exception. Mineralization tends to occur in significantly different geological formations. With conventional metals deposits, the concentration of metals tends to occur in horizontal formations.

Mining companies explore for such mineralization by drilling (more or less) vertically, in order to estimate the “true width” of the mineralization. Lithium mineralization tends to occur in an almost opposite manner.

Volcanic forces produce cracks in the underlying bedrock. Lithium mineralization, in the form of magma, flows up vertically into these fissures and then cools into mineralized formations known as “dykes”. As the term implies, such dykes represent primarily vertical layers of mineralization.

Dykes of lithium mineralization will often extend for hundreds of meters of length vertically, with the horizontal width ranging from tens of meters to a mere fraction of a meter. The other dominant characteristic of such hard-rock lithium formations is that they tend to occur in “swarms”.

Geologists exploring for lithium dykes will rarely find just one or two dykes in isolation. Instead, where such lithium mineralization occurs, it will typically be in the form of a multitude of such dykes.

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Picture of the “Prison Wall” dyke swarm at Little Nahani Pegmatite Group project

Equitorial is presently advancing two hard-rock lithium projects: the LNPG Project (Little Nahanni Pegmatite Group) in the Northwest Territories, and its Cat Lake Project in northern Manitoba. Both projects feature mineralization in the form of dyke swarms. While management is enthusiastic about the potential of both properties, the LNPG Project offers several advantages that will allow EXX to fast track its development.

LNPG is a large land package: 5,393 hectares comprised of 9 claims. When Equitorial acquired this property, which had already seen past exploration work, management also obtained old drill core samples. The Company is able to re-assay these core samples, versus having to conduct its own (much more expensive) preliminary drilling. That’s fast-track advantage #1.

Equitorial_LNPGmap.png
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Even though LNPG is located in an unpopulated region of the NWT along the Yukon border, EXX already benefits from existing infrastructure. It’s 5 kilometers from an existing access road which services the Howard’s Pass lead/zinc project.

Just 30 kilometers away is the Cantung Tungsten mine. While this mine is not currently in production, its fully permitted mill is on care-and-maintenance. The conventional floatation circuit of the mill can be easily configured to process LNPG ore. That’s fast-track advantage #2.

To be more precise, LNPG represents “LCT-type” lithium mineralization: lithium-cesium-tantalum. Indeed, when the property was previously explored, the operational focus was on the robust levels of tantalum that are present in the mineralization.

Equitorial_LNPGgeology-(1).png
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On November 28, 2017; Equitorial reported results from the resampling of diamond drill core, from exploration work carried out on the property in 2007. Five of these holes have been re-assayed, covering 1,120 meters of drilling.

Even though historical data is available for this previous drilling, there was a very important reason why management wanted to engage in the resampling of these drill cores. With the previous focus being entirely on tantalum, lithium mineralization above 1% (the upper detection limit) was not even recorded in the original assays.

In the Company’s new assaying of these core samples, some very encouraging results were reported:

  • 1.47% Li2O, 39 g/t Ta2O5, and 0.03% SnO2 over 9.66 meters
  • 1.03% Li2O, 31 g/t Ta2O5, and 0.02% SnO2 over 17.96 meters
  • 1.04% Li2O, 319 g/ Ta2O5, and 0.07% SnO2 over 1.76 meters

Given the geography, the Company has been able to visually track these lithium dykes, with lithium mineralization fully exposed in some areas (as indicated with the previous image of the Prison Wall dyke). Management estimates the vertical length of these dykes to run to as long as 500 meters. The combined horizontal strike length of these swarms is a robust 13 kilometers.

EXX’s CEO, Jack Bal explains the significance of LNPG representing an LCT-type geological formation:

Some of the most profitable and stable lithium mines are LNPG. Talison Lithium’s Greenbushes project has been producing lithium for over 25 years at 315,000 tonnes lithium per annum. Pilbara Minerals’ Pilgangoora project contains an indicated and inferred resource of 80.2 million tonnes at 1.26% lithium. Nemaska Lithium’s Phase 1 plant will have a capacity of 610,000 tonnes per annum. These companies have a combined market cap in the billions of dollars.

Equitorial_LNPGmapSwarms-(5).png
(click to enlarge)

The Company is also excited about the potential of Cat Lake, EXX’s other hard-rock project, three claim blocks totalling 99 hectares. Located 150 kilometers north of Winnipeg, Manitoba Provincial Highway #314 passes right through the claim block. As with LNPG, there has already been previous exploration in the area, along with actual mining operations (the Irgon Lithium Mine).

An historical resource estimate was compiled in the area in the 1950’s. However, because of the length of time that has elapsed, EXX isn’t quoting those numbers in its own reporting. What management did want to draw attention to was a 1948 (historical) drill result that reported a 48-foot (15-meter) intercept of spodumene-bearing quartz.

Equitorial_CatLake2.jpg
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Logistically, the old Irgon Mine shaft opens 150 meters from the south end of the Catail claim block. Given the past development at Cat Lake and abundance of infrastructure, the Company is eager to engage in further work here as well. However, management certainly doesn’t want to forget about its lithium brine prospects.

The Tule Valley property is comprised of 26 placer claims, totaling 4,800 acres. EXX is more enthused with respect to its Tule Valley property in Utah than its Nevada brine prospect.

There are several reasons for this assessment. In terms of the geography, Tule Valley bears some strong similarities to Nevada’s well-known Clayton Valley – viewed as one of the global “hot spots” for lithium exploration.

Tule Valley is in a known lithium-bearing district, with several companies advancing properties that are reporting robust levels of mineralization. Along with this, there is a very high water table, providing abundant access to water.

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Lithium brine mining requires massive volumes of water for evaporation operations. Given the hyper-arid climates that are typical for lithium brine projects, a sufficient source of water is frequently an issue.

For example, because of its abundant resources, many mining companies are exploring for lithium in the Clayton Valley, but only one company is actually producing lithium (Lithium X). Water in Nevada is very scarce, with most water resources already locked up by other rights-holders.

In terms of the near-term operational plans for EXX, management laid out its strategy to Stockhouse Editorial. With full-year access to the Cat Lake property, the Company is hoping to move a drill rig onto the property for initial drilling this winter.

Also on the agenda is to engage in preliminary geophysics at Tule Valley. Along with this, management intends to conduct some brine sampling. The Company is tentatively targeting this work for early in 2018.

Because of its northern climate, exploration at LNPG can only be efficiently conducted in the summer months. Management is targeting the summer of 2018 for its initial drilling at LNPG.

Looking slightly further ahead, the presence of the nearby Cantung Mill opens up the potential for a bulk sampling program at LNPG. Such pre-commercial mining operations not only provide a greater wealth of data for analytical purposes, the lithium (and tantalum) produced from these bulk samples comprises a revenue stream to partially offset exploration costs. That’s fast-track advantage #3.

Equitorial_highlights.png
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The world needs more lithium. As Equitorial Exploration seeks to unlock the commercial potential of its lithium projects, the Company wants to remind metals investors not to focus exclusively on lithium brine operations.

The economics of many hard-rock lithium mines are extremely robust. As investors seek to position themselves to capitalize on the lithium boom, they can’t forget about the conventional mining opportunities in this sector.

 
FULL DISCLOSURE: Equitorial Exploration Corp is a paid client of Stockhouse Publishing.


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Comments

jimbojim
The lithium brine resources no longer require massive amounts of fresh water if you are using the nanoflotation and nanofiltration technologies of MGXMINERALS.COM ! Evaporation is avoided and instead of waiting for up to 20 months for your product, you can put money in the bank after about a week !
3 stars
December 11, 2017
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brrwhip
May I add that brine and hard rock aren’t the only sources of lithium? Hectorite clay is also quite significant.
1.5 stars
December 12, 2017
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