Anyone remotely familiar with the lithium juniors space has heard of Pure Energy Minerals, (TSXV:PE) (FRANKFURT:AHG1:GR) (OTCQB:HMGLF) and no doubt the sizzling hot, new kid on the block, Lithium “seXy” Energy Corp, featuring legendary natural resource investors Frank Guistra & Paul Matysek and of course there’s Dajin Resources, currently the cheapest way (lowest market cap) to gain exposure to lithium love in both Nevada and Argentina. Western Lithium Corp. is another noteworthy junior, also with prospective assets in Nevada & Argentina.
The number of publicly listed companies owning or controlling property in Nevada amenable to lithium exploration continues to grow. In addition to the 4 mentioned, there’s Nevada Sunrise Gold, Ashburton Ventures, Lithium Corporation & Ultra Lithium, 8 in total. Lithium X Energy, Nevada Sunrise & Ashburton are new entrants this year. Six are pure-play lithium juniors, each with a combination of strengths and weakness. Experience of management & financial backers, quality & size of lithium resource(s), location (county/basin), stage of exploration / process development and operating technology / process are of paramount importance. Why is the lithium sector such a big deal? I asked Simon Moores of Benchmark Mineral Intelligence why lithium pricing is moving up even as other minerals & metals have moved markedly lower, quote,
“Lithium was different to all other minerals & metals this year, while every other commodity price fell, the lithium price was rising. This is because it serves one of the first industries driven by hi-tech markets, not an industrial ones.”
Pure Energy Minerals has a lot going for it, making it one of the more appealing investment opportunities in the lithium sector. First off, readers can check off the management box. The Company is stacked with 10 highly experienced and successful individuals from the ranks of Management, Board and Technical Advisory. Seven have decade(s) of expertise in lithium and/or advanced degrees in Geology, Hydrology and Geochemistry. Several have substantial industry contacts, adroitly drawing in strong financial backers. The Company’s flagship Clayton Valley South project is contiguous to the only lithium producing enterprise in North America – Albemarle’s Silver Peak Brine project. At 9,000 + acres, the property is the largest in the Esmeralda County area. Pure Energy boasts an 816,000 Mt Lithium Carbonate Equivalent, NI 43-101 compliant Inferred resource and a cornerstone supply agreement with Tesla Motors Inc (NASDAQ:TSLA), making it one of just two juniors at an advanced exploration / early process development stage, the other is Western Lithium.
If readers remember little else, please recognize that Korean Multi-national POSCO and Israel based process technology company Bateman Advanced Technologies have demonstrated strong votes of confidence in Pure Energy’s Clayton Valley South project. The Company also enjoys proactive partnerships with world-renowned SRI International and the University of British Columbia. It’s the technology collaborations with POSCO & Tenova Bateman that I highlight and elaborate on, a tremendously important differentiating factor. For the past 50+ years brine harvesting of lithium via massive evaporation pools has been the norm in Nevada and in the Lithium Triangle of Chile, Argentina & Bolivia. Dating back much further is hard rock mining of pegmatites containing the lithium bearing silicate spudomene. Hard rock extraction has proven to be increasingly energy intensive, costly and less environmentally friendly compared to newer approaches.
The fact that Pure Energy is able to engage in meaningful interactions with POSCO & Tenova Bateman is testament to the quality of its Clayton Valley South project and stage of exploration / process development. In coming years, the technologies emerging lithium producers chose to incorporate into flow sheets will make or break them. Next decade, brine harvesting and conventional hard rock mining will begin to fall by the wayside as superior technologies come to fruition. I liken this situation to events in the uranium sector where In-Situ Recovery techniques have made substantial inroads at the expense of conventional hard rock mining. POSCO & Tenova Bateman are leaders in paradigm shifting technologies. Both companies are cutting their teeth on Clayton Valley lithium brines and brines from a few other projects including Western Lithium’s Cauchari-Olaroz in Argentina. ASX listed Orocobre Ltd. recently announced it has entered into an MOU with Tenova Bateman for that company’s Argentinian lithium project.
Tenova Bateman’s LiSX technology [Awesome video here]
Get ready, an attempt will soon be made to illuminate these two groundbreaking (actually neither breaks ground) technologies. A detailed, technical assessment is beyond the scope of this article. Essential in understanding what each technology is tasked to deliver, is understanding the shortfalls of brine harvesting and hard rock mining. Each suffer from a number of challenges; large upfront capital outlays, long operating cycles, (brine), inferior recoveries, unattractive environmental footprints, energy intensity, operational inflexibility and weather related risks. The new age of technology promises to cut operating cycles to hours, be greener and less energy intensive. Commercial scale recoveries are expected to be 99.9%, leading to lower, more predictable operating costs and far less waste (virtually no tailings).
Tenova Bateman’s LiSX technology achieved spectacular results at bench scale with 100% Li extraction at robust purity,lithium chloride solution (>99.9%). The company continues to conduct Pre-Feasibility level design work on Pure Energy’s Clayton Valley. Tenova’s LiSX solvent extraction technology is effective on a much wider range of lithium containing material. Quote, from a Tenova Bateman marketing brochure,
“Tenova Bateman Technologies offers advanced solvent extraction solutions and proprietary technologies for the mineral and bio-process industries, complimented by in-house laboratory and pilot plant facilities….” “Aqueous feed solution is mixed with customized solvent in which lithium ions are preferentially absorbed, loading the organic solvent with lithium. The loaded solvent is separated from the aqueous brine and stripped of lithium by adding an appropriate acid, producing a lithium salt and barren solvent to be recycled / reused.”
“In salar operation, waste streams are suitable for re-injection, eliminating environmental impacts. The LiSX process is fully effective on aqueous solutions containing lithium concentrations as low as 20 ppm, with recoveries in excess of 99%. The LiSX process is versatile and can be rapidly reconfigured to produce different lithium end-products at exceptionally high purity.”
I couldn’t have said it better myself. How can I explain this technology to my intelligent, but possibly less technically oriented readers? Enter stage right Mr. Andy Robinson, Ph.D. COO of Pure Energy. Andy, can you please explain, in layperson’s terms, the above quoted paragraphs? Thank you.
Brine (salty groundwater) is pumped from underground and filtered to remove magnesium and calcium. It’s then mixed with a proprietary solvent that selectively removes only the lithium. The lithium in the brine combines with the solvent, even at low concentrations (as low as 20 ppm). The solvent is then moved into settling tanks where it is collected. The lithium is removed from the solvent, and processed into high purity battery materials such as lithium hydroxide. Now that the solvent has no remaining lithium in it, it’s available to be recycled and used again. The process is continuous, takes less than a day, and the lithium-free brine would be re-injected back into the ground, providing a uniquely sustainable, low energy intensive, and truly green solution.”
POSCO’s Lithium Separation Technology
There’s less information in the public domain on POSCO’s proposed high efficiency lithium brine extraction technology. POSCO is obviously a giant global company that by all accounts wants to be a major vertically integrated player in lithium compounds and metal alloys. Despite a paucity of public news, it’s known that the technology delivered strong results at its fully self-financed demonstration plant in Argentina. POSCO’s demo plant has an operating capacity of 200 metric tonnes, “Mt,” per year of LCE. Continuous operating rates were achieved through a test period that ended in January 2015. During that period, in excess of 20 Mt of lithium compound was produced and exported to POSCO’s pilot plant in Korea, where it was further processed into battery grade lithium carbonate & lithium hydroxide. [Awesome video here]
POSCO asserts that its high efficiency lithium extraction technology has numerous advantages compared to traditional lithium brine evaporation technology. Specifically, it produces lithium considerably more quickly, minimizes the environmental footprint associated with massive solar evaporation ponds, and has a recovery rate of roughly 80%. That’s about twice the recovery rate of brine evaporation technology. Like Tenova Bateman’s LiSX technology, POSCO’s methodology has additional, similar advantages over brine evaporation and hard rock mining. Closely evaluating two lithium extracting technologies begs the question, how are they different and why continue moving forward with both? I posed that question to Mr. Robert Mintak, CEO & Director of Pure Energy Minerals, his response, quote,
“Solar evaporation ponds are inefficient and have a huge environmental footprint. Combining that with large capital costs and climate risk, they have no place in the clean energy supply chain. For a good part of the past five years I have focused a significant amount of time and effort researching brine processing technologies and building strategic relationships with companies whose technologies show the best likelihood for commercial success. POSCO and Bateman Advanced Technology are head and shoulders above anyone else. Pure Energy is fortunate to be able to work with both BAT and POSCO. Both technologies address the primary requirements we seek in Clayton Valley; 1. Greatly improved recovery efficiency, double that of evaporation ponds, 2. Smaller foot print, no ponds, 3. Weather independent, BAT with solvent extraction and POSCO through a chemical reagent process, both achieve these goals through proprietary processes. Which technology may prove to work best in Nevada? That is the work we are undertaking now, with the goal of producing our PEA in Q2 2016.”
Conclusion
Pure Energy Minerals, (TSXV:PE) (FRANKFURT:AHG1:GR) (OTCQB:HMGLF) is in the right place at the right time with an advanced stage exploration and process development (in close collaboration with Tenova Bateman & POSCO) project. Of the seven other publicly listed companies pursing lithium dreams, only Western Lithium has a defined project in Nevada that’s more advanced. It’s difficult to overestimate the significance of Pure Energy’s tight relationships with both Tenova Bateman and POSCO. Pure Energy has been working with both companies for 2-3 years. This represents a huge advantage. Peer lithium juniors are hustling to stake more claims and in many cases, first applying for the permits and approvals to begin exploration. This suggests that most peers still require additional equity capital to fund activities that Pure Energy is well beyond.
To be clear, Tenova & POSCO don’t fall into bed with every company with the word “Lithium” in its name. The fact that Pure Energy is one of the few in Nevada with not one but two paradigm shifting technologies to choose from is hugely important. Yet, as reflected in the Company’s market cap, this vital fact appears to be ignored. Pure Energy is arguably three years ahead of any Nevada junior and more advanced than most lithium juniors around the world. Time is money, a 3-yr head start is meaningful. Pure Energy has de-risked Clayton Valley and continues to do so in a prudent and efficient fashion. I expect that Pure Energy could break away from the pack next year as the market catches on to this compelling story.
Disclosure: Several of the companies mentioned herein have small market caps, including Pure Energy Minerals and Dajin Resources, small market cap stocks are highly speculative, not suitable for all investors. I, Peter Epstein, own shares of PE.V. and DJI.V. Mr. Epstein, CFA, MBA is not a licensed financial advisor. Readers should take that fact into careful consideration before buying or selling any stocks mentioned.
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