Specialty Metals Report

The impending massive worldwide switch to electric vehicles will have a major impact on the battery minerals sector of the mining industry.

by Ellsworth Dickson

THE US GEOLOGICAL SURVEY has compiled a list of 23 mineral commodities and commodity groups viewed as critical to a broad range of existing and emerging technologies, renewable energy, and national security. They include antimony, barite, beryllium, cobalt, fluorine, gallium, germanium, graphite, hafnium, indium, lithium, manganese, niobium, platinum-group elements, rare-earth elements, rhenium, selenium, tantalum, tellurium, tin, titanium, vanadium, and zirconium.

Resource World has covered some of these elements in past issues. This article will highlight presentations held at the recent Argus Specialty Metals Conference in Henderson, Nevada.

Recognizing the need to have secure supplies of metals and minerals, the Critical Materials Institute (CMI), which is supported by the US Department of Energy, has numerous projects underway with a five-year budget of US $120 million. Led by the Ames Laboratory, the projects involve four national labs, seven university partners, 11 industrial partners and approximately 350 researchers.

Alexander King, Director of CMI, explained to the Argus attendees that CMI will develop at least one technology adopted by US companies in each of these three areas: diversifying production, developing substitutes and reducing waste. To date, some of CMI’s new technologies adopted by US industries pertain to membrane solvent extraction, recycling rare earth magnets, Ce-modified aluminum alloys, 3D printed magnets and recovering mercury from used fluorescent lamps.

CMI has 50 patent applications with five patents awarded. Some of CMI’s new efforts are targeting advances using cobalt,

manganese, gallium, indium, tellurium, platinum group metals, vanadium and graphite with a view to develop co-product and by-product strategies.

With lithium, cobalt and nickel used in electric vehicles (EV) batteries, it is no wonder that mineral explorers are sourcing out good projects around the world. Currently, ~100,000 tonnes of cobalt is produced in the world annually. The market for cobalt is projected to grow over 11% over the next 10 years primarily due to growing demand for EVs. Countries like Germany, France, the United Kingdom, and China have vowed to ban Internal Combustion Engines (ICEs) over the next 10 to 20 years.

Lithium exploration projects are well underway in Argentina, Chile and, more recently, in Bolivia. See Resource World feature on South America’s Lithium Triangle April/May 2018. The Clayton Valley, Nevada is also one of the world’s prime exploration regions where there are approximately 136 lithium exploration companies!

While the Democratic Republic of Congo is still the world’s main supplier of cobalt, dozens of explorers are fanning out around the world seeking good projects, particularly in the historic Cobalt, Ontario region. See Resource World feature on Cobalt, Ontario April/May 2018.

As far as end users are concerned, many auto makers are jumping into the EV sector big time, including GM, Ford, Volkswagen, Volvo, Renault-Nissan, Toyota, Honda, Hyundai and BMW to name a few, plus Chinese EV makers such as BYD.

While most of the world’s car buyers have been slow to purchase EVs of some kind – mainly due to high prices and range anxiety – that is changing with the

Chevy Bolt being the first long-range, sub-$40,000 EV.

Nickel is also getting more attention these days. Nickel demand for EVs is small compared to steelmaking but is getting a positive sentiment despite a decline from a February high above US $14,000 a tonne. Nickel is still up 9% in 2018 after its 25% jump in 2017.

Class 1 nickel, the purest form of nickel, is a key metal also used in the production of electric vehicle batteries. This supply deficit will only grow since battery makers have already started to explore ways to reduce their reliance on cobalt given its limited supply and higher prices in the offing. Class 1 nickel is viewed as a viable alternative due to its superior energy density.

A number of exploration and mining companies as well as mining analysts have prepared forecasts for EV battery minerals demand; however, they are talking about what will happen in the future – not an easy thing to do considering all the variables. On the supply side, with dozens of active lithium and cobalt exploration companies out there, plus producers that may be able to ramp up production, just how much supply will be available in the next few years?

Another possible factor waiting in the wings is that when the price of a commodity rises too high, efforts get underway to find substitutes, a topic the Critical Materials Institute is looking into, as noted above. Meanwhile, LME cobalt prices recently retreated from a nine-year peak to finish below US $80,000 a tonne for the first time since mid-January but are still up 64% compared to March 2017. Lithium carbonate prices have also peaked but remain above US $20,000 a tonne, up from US $6,450 per tonne in January 2015.

With all this talk about EVs, how many people give any thought as to what will happen to the millions of spent EV batteries down the line? Larry Reaugh, President and CEO of American Manganese, thinks about this and told the Argus audience that his company has a metallurgical process that can recover 100% of the lithium and cobalt in a lithium ion battery. See more details below.

Vanadium is getting attention and not just because 0.5% vanadium doubles the strength of steel. It is now viewed as playing an important role in energy storage – see VanadiumCorp. below.

SPECIALTY METALS COMPANY SUMMARIES

American Manganese Inc. [AMY-TSXV; AMYZF-OTC; 2AM-FSE] is a diversified specialty and critical metal company focused on capitalizing on its patented intellectual property through low-cost production or recovery of electrolytic manganese products throughout the world, and recycling of spent electric vehicle lithium-ion rechargeable batteries. The company aims to capitalize on its patented technology and proprietary know-how to become the industry leader in recycling spent electric vehicle lithium-ion batteries and recovering 100% of the cathode metals such as: lithium-cobalt, lithium-cobalt-nickel-manganese, lithium-cobalt-aluminum and lithium-manganese.

Avalon Advanced Materials Inc. [AVL-TSX; AVLNF-OTCQX; OU5-FSE] has reported assay results from its successful 2018 winter drilling program at its Separation Rapids lithium project near Kenora, Ontario. Results were highlighted by a 37.75-metre intersection of lepidolite-rich mineralization in hole SR18-80 that averaged 1.58% Li2O. Six holes totaling 1,548 metres were completed with all holes intersecting significant lithium mineralization, both petalite and lepidolite-petalite bearing. An updated resource estimate is being prepared which is expected shortly. Metallurgical process optimization and environmental work continues with results of this work, along with a revised resource estimate that will be used to complete an updated technical report this spring. Cascadero Copper Corp. [CCD-TSXV]

and partner Regberg jointly own the Amarillo and Amarillo North properties in northern Argentina that encompasses a sediment-hosted cesium-silver deposit. Cascadero has a 100% interest in the Taron cesium prospect, also in northern Argentina, where a sample graded 0.467% cesium. Metallurgical studies have been carried out.

Cellcube Energy Storage Systems Inc. [CUBE-CSE], formerly Stina Resources Ltd., is planning an extensive spring/summer work program at its Bisoni McKay/Bisoni-Rio vanadium project near Eureka, Nevada. The project, one of the largest pure play vanadium projects in North America, covers 4,115 acres contiguous to Prophecy’s Gibellini deposit. There is a NI 43-101 indicated resource of 11.9 million tons averaging 0.39% V2O5 and inferred resources of 7 million tons averaging 0.42% V2O5.

Stina has established a new wholly-owned Austrian subsidiary, Enerox GmbH, that has acquired the Gildemeister assets and business. Enerox is one of the world’s first and largest researchers, developers, manufacturers and distributors of vanadium flow batteries.

Commerce Resources Corp. [CCE-TSXV; CMRZF-OTC; D7H-FSE] has reported results of prospecting and sampling throughout the Miranna Area on its Niobium Claim Group, northern Québec. This work was conducted during the 2017 field program. The Miranna Area is characterized by a strongly mineralized (Nb-Ta-Phosphate), glacially dispersed, boulder train with a source interpreted to be potentially on the property. Prospecting continues to identify numerous, well-mineralized boulders, with the 2017 program returning a peak niobium sample of 16.1% Nb2O5, 7,540 ppm Ta2O5, and 13.4% P2O5.

The tantalum and niobium sample from the company’s Upper Fir deposit near Blue River, eastern British Columbia has been successfully processed utilizing the patented Krupin Process. Commerce is now working towards the signing of a definitive agreement to acquire the global rights to the Krupin Process.

The Upper Fir deposit has an indicated resource of 48.4 million tonnes at 197 ppm Ta2O5 and 1,610 ppm Nb2O5, and inferred resource of 5.4 million tonnes at 191 ppm Ta2O5 and 1,760 ppm Nb2O5.

Cornerstone Metals Inc. [CCC-TSXV; APPPF-OTC] reported the results of the final seven holes of the 20-hole confirmation diamond drilling program on its Carlin vanadium project, Nevada, one of the largest, richest primary vanadium deposits in North America. The drilling confirmed and improved the confidence of the geological model of the deposit and confirmed and improved continuity of grade and thickness of the high-grade near surface vanadium unit.

Cornerstone is planning a Phase 2 drill program comprised of a 50-70 hole reverse circulation drill program with the objective to expand dimensions of the deposit before completing a resource estimate. Permitting for the Phase 2 program is in place.

Critical Elements Corp. [CRE-TSXV; CRECF-OTCQX; F12-FSE] has completed a Feasibility Study on its Rose hard rock lithium (spodumene) and tantalum project approximately 300 km northwest of Chibougamau, Québec. The NPV (8%) is $726 million with an IRR of 34.9% and a payback of 2.8 years. Gross margin is 63% and the average annual EBITDA is $183 million. Mine life is 17 years with a CAPEX of $341 million.

Nominal production rate is estimated at 4,600 tpd, with 350 operating days per year. The open pit mine will produce a total of 26.8 million tonnes of ore grading averaging 0.85% Li2O and 133 ppm Ta2O5, including dilution. The mill will process 1.61 million tonnes of ore per year to produce an annual average of 236,532 tonnes of technical and chemical grade spodumene concentrate and 429 tonnes of tantalite concentrate.

The 100%-owned eCobalt Solutions Inc. [ECS-TSX; ECSIF-OTCQX] Idaho Cobalt Project, located in east-central Idaho about 26 miles west of Salmon in the Idaho Cobalt Belt, is the only near-term, environmentally permitted primary cobalt project in the United States. Over $120 million has been spent on the project to date and there is extensive infrastructure already in place. Initial production is expected in 2019, ramping up to full commercial production in 2020. The project also demonstrates favourable long-term resource growth opportunities. A feasibility study has been completed as well as pilot plant testing.

Extensive earthworks at the mine and mill have been completed including the dry stacked tailings waste storage facility, mill pad, concentrator pad, ore haul road, concentrate haul road, water management ponds and partial construction of the portal bench.

The Cobalt Production Facility site has been secured in an industrial park in Blackfoot, Idaho. The company said, “We are committed to providing clean cobalt products essential for the rapidly growing rechargeable battery and renewable energy sectors, made safely, responsibly, and transparently in the United States.”

Happy Creek Minerals Ltd. [HPY-TSXV] has an updated NI 43-101 resource estimate completed for the Ridley Creek and BN zones, as well as a first time resource estimate for the BK Zone on its 100% owned Fox tungsten property 75 km northeast of 100 Mile House in the south-central Cariboo region of British Columbia.

The Fox property contains a recently discovered, large scale, 10 km by 3 km tungsten skarn mineral system containing seven mineralized zones and numerous showings at surface. The current resource is for the Ridley Creek, BN and BK Zones, which are portions of a 3 km long skarn horizon that outcrops at surface and dips gently westward.

Total indicated resources for the Ridley Creek Zone are 582,400 tonnes grading 0.826% WO3 with inferred resource at 565,000 tonnes grading 1.231% WO3 for the Ridley Creek, BN and BK Zones combined.

David Blann, P.Eng., President and CEO, said, “We have not yet included the potential for by-products zinc, indium, bismuth, gold and silver values which would require more detailed metallurgical testing for a more advanced economic study. The three zones with resources remain open to expansion.

Jeannis Industries (private) has its beryllium deposit in Utah up for sale along with its proprietary beryllium extraction technology. A 1991 Feasibility Study stated that the Horn deposit has proven and probable reserves of 507,000 tons of 0.61% beryllium oxide (BeO) and 125,000 tons inferred grading 0.56% BeO.

Largo Resources Ltd. [LGO-TSX; LGORF-OTCQB] has announced plans to expand production capacity at the Maracás Menchen Mine in Bahia State, Brazil from the nameplate rate of ~800 tonnes per month of vanadium pentoxide (V2O5) to 1,000 tonnes per month, an increase of 25% over nameplate capacity.

The enhanced production rate of vanadium flake, high purity vanadium flake and high purity vanadium powder is expected to result in an additional 200 tonnes of V2O5 being produced monthly from and after June 2019. CAPEX is estimated to be about US$ 15.5 million. Construction is expected to start in June with an expected completion in about a year, including the permitting and commissioning.

Largo is the only pure-play producer of vanadium and also has interests in other projects, including: a 100% interest in the Currais Novos tungsten tailings project and a 100% interest in the Campo Alegre de Lourdes iron-vanadium project, both in Brazil; and a 100% interest in the Northern Dancer tungsten-molybdenum property in the Yukon. All three super alloys have been declared critical by the US government.

Namibia Rare Earths Inc. is changing its name to Namibia Critical Metals Inc. [NMI-TSXV] to reflect changing its focus from the Lofdal REEs project (now on the back burner) to explore its specialty met-als projects in Namibia. In February 2018, the company acquired seven projects from Gecko Namibia (Pty) Ltd. that host the following commodities: cobalt, copper, lithium, graphite, tantalum, niobium, vanadium and gold.

Namibia Critical Metals is particularly interested in advancing its Kuene-cobalt-copper property where cobalt anomalies have been confirmed. Mapping and prospecting programs are on-going and an airborne EM survey is planned. A 7,500-metre drill program is planned for this fall.

NioCorp Developments Ltd. [NB-TSX; NIOBF-OTCQX; BR3-FSE] is plan-ning a mine and an advanced materials manufacturing facility at its Elk Creek niobium, scandium and titanium project in Nebraska. The Definitive Revised Feasibility Study shows pre-tax NPV of $2.3 billion and pre-tax IRR of 24.3%; an after-tax NPV of $1.7 billion with an after-tax IRR of 21.7%. There would be a 32-year mine life with 3.4-year pre-tax payback period from start of production. There would be gross revenue of $17.6 billion over mine’s operating life with operating margin of $12.2 billion. Average EBITDA is $389.6 million over operating life with an average EBITDA margin over operating life of 69.5%.

Prophecy Development Corp. [PCY-TSX; PRPCF-OTCQX; 1P2N-FSE] is advancing the Gibellini primary vanadium mining project in the Battle Mountain region of northeast Nevada to production. The company is preparing for its exploration and verification drilling program in Q2 2018. A total of 4,880 metres of reverse circulation drilling in 64 holes is planned.

An independent NI 43-101 report by Amec Foster Wheeler E&C Services estimated combined measured and indicated resources of 22.01 million tons averaging 0.294% V2O5, containing 129.28 million pounds V2O5. Inferred resources are 9.82 million tons at a weighted average grade of 0.19% V2O5 containing 37.27 million
pounds V2O5.

Saville Resources Inc. [SRE-TSXV] released results of recent prospecting and sampling completed throughout the Miranna area, which forms part of its niobium claim group in northern Québec. Work was conducted by Commerce Resources for its 2017 field program. The Miranna area is characterized by a strongly mineralized (niobium-tantalum-phosphate), glacially dispersed, boulder train with a source interpreted to be potentially on the company’s property. Prospecting work in the area continues to identify numerous, well-mineralized boulders, with the 2017 program returning a peak niobium sample of 4.30% niobium oxide, 240 parts per million tantalum oxide and 13.4% phosphate, and a peak tantalum sample of 1.16% Nb2O5, 700 ppm Ta2O5 and 0.65% P2O5.

Sherrit International Corp. [S-TSX] is one of the world’s largest producers of nickel and cobalt from lateritic sources with operations in Canada, Cuba and Madagascar. Sherritt’s cobalt is mainly pro-duced in the form of a briquette, a product type that battery makers find more ame-nable for their manufacturing processes than alternatives. Since most of the world’s cobalt supply comes from the DRC, Sherritt can offer battery makers an alternative source of secure supply given that its pro-duction is from Cuba and Madagascar. As a low-cost, high purity producer of Class 1 nickel, Sherritt is poised to take advantage of growing demand from battery makers, which is also expected to help alleviate a supply deficit over the next several years.

VanadiumCorp Resource Inc.’s [VRB-TSXV; APAFF-OTCQX; NWN-FSE] flagship Lac Dore VTM project spans over 45 km2 and is located close to the mining centre of Chibougamau, Québec. NI 43-101 vana-dium resources are 621 million lbs V2O5 from VTM concentrate grading 1.08% V2O5. Mineralization is open at depth and along strike. Located adjacent to the mining centre of Matagami, Québec, 350 km west of Lac Dore, the company’s Iron-T Project has a NI 43-101 VTM resource in the Genesis Zone of 14,376,000 tonnes inferred at 0.42% V2O5. VTM mineralization is at surface, open at depth and along strike.

VanadiumCorp has partnered with Electrochem which has invented a new chemical process that has the potential to revolutionize energy storage, steel making, vanadium applications, iron production, titanium industries and more. The patent-pending process technology recovers maximum value of all contained metals from single source feedstocks and wastes while integrating it with Electrochem’s patented electrowinning technology aimed to replace conventional iron and steel-making that uses half the energy and a negligible carbon footprint.

Vanadium One Energy Corp. [VONE-TSXV; 9VR1-FSE] has shipped 738 samples for assaying from its Phase 2A drilling program on its Mont Sorcier iron-vana-dium-titanium project near Chibougamau, Québec, as it works toward confirming the non-NI 43-101 compliant historical resources in the North Zone (154 million tonnes) and the South Zone (91 million tonnes), about 1 km apart. The company also has a manganese exploration project near Clinton, British Columbia.