Hertz Lithium offers investors breakthrough lithium extraction technology with potential royalty deal and a mineral property with lithium grades up to 5%

By Peter Kennedy

Hertz Lithium Inc. [HZ-CSE] is a company that aims to capitalize on an expected surge in demand for lithium that is tied to the movement to clean technologies and their reliance on battery metals.

The Vancouver-based company hopes to achieve that goal in two ways. The first is by developing its Lucky Mica property, which is situated in the Arizona pegmatite belt, an emerging high-grade hard rock lithium district with known lithium deposits.

The second is via a patent-pending breakthrough technology that offers a way to extract lithium from spodumene while it is still in its “a” form, recovering up to 90% of the lithium. The technology is being developed by a team at Penn State University Research Foundation (PSRF).  Hertz secured an option to license the exclusive worldwide rights to utilize this technology. In a press release on May 10, 2022, Hertz said it had exercised the option and has subsequently entered negotiations related to the license agreement.

“As many new hard rock lithium deposits are being discovered to meet growing global demand, we aim to work with Penn State University’s patent pending process to develop improved lithium extraction technologies for hard rock resources around the world,’’ said Hertz CEO and director Kal Malhi.

It is anticipated the license agreement will require that the company pay the PSRF mutually agreed to royalty and milestone payments based on revenue, if any, generated by the company from the technology. In addition, the company and the PSRF are in talks to commence further development and scale-up the technology.

Hertz’s strategy is based on lithium’s key role in the manufacturing of electric vehicle batteries, and expectations that rising EV demand could put global supplies of lithium under strain. Demand for lithium is expected be driven in part by government subsidies aimed at boosting the production of electric vehicles in the United States, Canada, and elsewhere.

Since the company completed a $1.6 million IPO in early April the shares have nearly tripled in value.

On May 19, 2023, Hertz Lithium shares closed at CAD $0.29 and currently trade in a 52-week range of $0.11 and $0.32, leaving the company with a market cap of $8.8 million, based on 30.48 million shares outstanding.

Due to its abundance and widespread distribution around the world, Spodumene is the primary source of high-purity lithium. However, current technologies do not allow leaching lithium directly from spodumene’s native form.

The current extraction methods are focused on modifying the crystal structure of concentrated spodumene using conventional heating (roasting) at a temperature of 1050 degrees Celsius to transform the natural crystalline form of spodumene to a form which can be leached at a high temperature.

Such high-temperature roasting processes are very energy intensive and have been the bottleneck in relation to the economic extraction from ores. As a result, there has been a need for more energy-efficient and environmentally friendly methods for a high-yield extraction of lithium. The technology developed at Penn State is designed to satisfy these needs by offering a way to extract lithium from spodumene while it is still in its “a” from.

This process utilizes low temperature (320 degrees Celcius) NaOH roasting of spodumene which facilitates high recovery of Li through water leaching. The impurities in the water leachate (mainly Si) of this process can be readily removed. The water leaching conditions also facilitates low-cost Li battery precursors. The microwave-assisted NaOH roasting will even further reduce the energy consumption of the process. Due to the advantages of microwave heating over conventional heating, the former will even enhance the efficiency of the conversion of Li in a-spodumene to water-soluble phases.

The technology includes an international patent application that has already entered the national phases in Canada, the U.S. and Australia. Depending on the success of the development phase, the company may commercialize and market the technology to be used by other companies.

It could also be used to create lithium carbonate at its Lucky Mica property, which is located in Maricopa County, Arizona, about 10 kilometres southwest of the city of Wickenburg (population 6,300).

An extensive pegmatite swarm has been discovered on Patriot Lithium’s [PAT-ASX] Wickenburg Project, which surrounds the Lucky Mica property. Wickenburg has so far been untested by drilling.

Lucky Mica is road accessible and at an early stage of exploration. It consists of 114 lode mining claims covering 939 hectares, and lies within a prospective geological and structural setting for lithium and rare metal pegmatite mineralization.

The mineralization of economic interest at Lucky Mica is found in spodumene-bearing pegmatite dike complexes, which can vary from a few metres to 100 metres in length with the same variation in widths.

From early work completed on the property, data shows that spodumene-bearing pegmatites have grades comparable to the average grade of other pegmatite projects where studies have been completed indicating positive economics, including North American Lithium (NAL), Nemaska Lithium, with one grab sample (from spodumene rich pegmatite) returning a grade of 7.5% Li20.

The Lucky Mica Dike is considered the most significant known occurrence with reported lithium grades of 3.0% to 5.0% in spodumene minerals.

However, the company has said further field work and drilling will help better define the mineralogical zoning of the Lucky Mica dike and the regional chemical zonation of the different pegmatite bodies observed on the project.

A NI 43-101-compliant analysis has defined a potential resource for the Lucky Mica dike alone (not the entire project) of between 330,000 and 551,000 tonnes at grades of between 0.3% and 2.5% Li20. The project, as identified by SGS Canada, comprises seven (7) other outcropping dikes, which according to a technical report could add significant volume to the spodumene bearing pegmatites and increase the tonnage range to 330,000 to 3.0 million tonnes.

Hertz’s exploration plan is to identify all the pegmatite bodies located on the property and to explore multiple zones of lithium mineralization to assemble an economic resource tonnage and grade.

In keeping with that plan, Hertz has begun field explorations and project development at the property. The 2023 work program is to consist of concurrent field exploration targeted with systematically mapping and geochemical sampling the extent of additional known pegmatite outcrops at the property.

The work is to be complimented by and acquisition of valuable remote sensing, hyperspectral and radiometric data as well as reinterpretation of existing magnetics data to support structural interpretations as to the controls on pegmatite emplacement. Follow up work is to include trenching and channel sampling over defined targets to better understand any potential resource volume and grade of the known pegmatite bodies.

Drilling is contemplated in the fall of 2023 and will be contingent upon success through the preceding stages of evaluation.