Miner offers a rare shot at uranium and lithium

Location map of the Plateau Energy Metals Peruvian Project. Source: Plateau Energy Metals Inc.

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By Peter Kennedy

Location map of the Plateau Energy Metals Peruvian Project. Source: Plateau Energy Metals Inc.

Plateau Energy Metals Inc. [PLU-TSXV; PLUUF-OTCQB; QG1-FSE] says the company is positioning itself to be a big player in both the lithium and uranium sectors.

It hopes to achieve that goal by continuing to develop a growing lithium and uranium resource at its Falchani Project in Peru. The project is located within a huge and largely unexplored tenement package covering 910 km2 on the Macusani Plateau in southern Peru.

“You get two shots at gold from one investment label,” said Plateau Chairman Ian Stalker, during an interview that is posted on the company’s website.

Stalker said Plateau discovered uranium on the Macusani property in 2005 and lithium later on in 2014 and 2015, prompting a decision to change the company’s name from Plateau Uranium to Plateau Energy.

The Falchani property contains a NI 43-101 uranium resource of 51.9 million pounds in the measured and indicated category. On top of that is 72.1 million pounds of inferred material.

According to a Preliminary Economic Assessment (PEA), that material could support a mining operation with the potential to produce an average of 6.1 million pounds of uranium oxide annually for 10 years at an average production cost of $17.28 a pound. Start-up capital expenditures were estimated in the PEA at just below $300 million.

This estimate was based on a uranium price of US$50 a pound. So it should be noted that spot uranium has been trading recently in the US$27 per pound range.

However, Plateau says its breakthrough discovery came in October, 2017 when test work on bulk sample material showed that the project has the potential to produce uranium as well as a lithium by-product.

At the time of the announcement in October, 2017, the company said uranium and lithium co-production at Macusani represents significant potential value with commodity consensus prices for the mid to long term (beyond 2020) forecasted to range between US$53 and US$75 a pound for uranium oxide and US$8,000 to US$10,000 for lithium carbonate, according to CIBC Global Mining Group analyst consensus research.

The potential for lithium production is a boost because uranium has been locked in a bear market since the Fukushima nuclear disaster in 2011.

By contrast, investor interest in the lithium sector is tied to the fact that lithium is a key ingredient used in the production of lithium-ion batteries used in electric vehicles.

Analysts agree that the booming electric vehicle market will dramatically boost the demand for battery quality lithium. However, some analysts have expressed the fear that prices could be dampened by a flood of new production.

The two main lithium products for the production of lithium-ion batteries are lithium carbonate and lithium hydroxide. Lithium carbonate is mostly produced from concentrated lithium chloride brines in Chile and Argentina.

The Falchani lithium resource has been described as unusual as it is hosted in a volcanic tuff, making potential lithium extraction much quicker than brine.  Grade is also much higher than average brine grades.

On July 24, 2018, the company announced a maiden lithium resource estimate for the Falchani Project. The indicated resource within the lithium-rich tuff sequence stands at 34.82 million tonnes at 0.73% Li2O. On top of that is an inferred resource of 77.80 million tonnes at 0.73% Li2O.

Within the wider lithium-rich package, including upper and lower breccia units, is an indicated resource of 58 million tonnes at 0.67% Li2O, and an inferred resource of 70 million tonnes at 0.59% Li2O.

The maiden resource estimate is based on drilling that covers an area of 1,250 metres north south and up to 500 metres east west, representing 20% of the potential deposit area, the company said.

Company officials say they hope that this resource will continue to grow with further planned drilling.

“To report our maiden lithium mineral resource estimate in less than nine months after our discovery hole at Falchani is a wonderful achievement and everyone associated with Plateau can feel tremendously proud of this accomplishment,” Stalker said.

On Wednesday, Plateau Energy shares were trading at $1.13 in a 52-week range of 26 cents and $1.69.

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