USA News Group
Commentary
VANCOUVER, BC, April 30,
2024 /CNW/ -- Coming off a major market
correction in 2023 down from 2-2022's record highs, the
lithium market is primed for a rebound in 2024. Analysts at
MorningStar using data shared from Platts,
LME, Benchmarked Minerals, Fastmarkets, and
MorningStar itself are forecasting lithium prices to
stabilize and rise in 2024, and to nearly double from $17,000 to $30,000
per metric ton from 2023 to 2030. As the Electric Vehicle (EV)
market moves towards a projected $1.66
trillion by 2030, lithium demand is expected to triple from
2022 levels over that time. Today with more than 65% of the world's
lithium reserves, it's in Latin
America where some of the most promising new projects are
still under development, including from Lithium South
Development Corporation (TSXV: LIS) (OTCQB: LISMF), POSCO
Holdings Inc. (NYSE: PKX), American Lithium Corp.
(NASDAQ: AMLI) (TSXV: LI), Sigma Lithium Corporation
(NASDAQ: SGML) (TSXV: SGML), and Atlas Lithium Corporation
(NASDAQ: ATLX).
As an integral part of the prolific Lithium Triangle,
Argentina is on pace to become a
Top 3 Lithium Producer status by 2027. One of the more
prominent developing stories within Argentina's Salta Province is the
Hombre Muerto North Lithium (HMN Li) project, 100% owned by
Lithium South Development Corporation (TSXV: LIS) (OTCQB:
LISMF) which late last year produced a newly upgraded NI 43-101
technical report, revealing a remarkable 175% increase in its
lithium resource to more than 1.58 million tonnes of lithium
carbonate equivalent.
Based on this newly defined N.I. 43-101 lithium resource,
Lithium South has just completed a Preliminary Economic
Assessment (PEA). This technical and financial evaluation was based
upon a potential 15,600 tonne per year lithium carbonate technical
grade operation. The envisioned mining facility would use industry
standard solar evaporation to extract the lithium. The financial
model looked impressive with a after tax Net Present Value of
US$938 million, an after-tax Internal
Rate of Return of 31.6% and a short 2.5-year payback.
This year has started off with an interesting development
between Lithium South and POSCO Argentina SAU, a
wholly owned subsidiary of Korean giant, POSCO Holdings Inc.
(NYSE: PKX). A key southern portion of the HMN Li Project, the
Norma Edith and Viamonte contiguous claim group, is located in a
zone of dual jurisdiction between Catamarca and Salta Provinces.
POSCO has the Catamarca side and Lithium
South has the Salta side. To facilitate development of the
area, POSCO and Lithium South have agreed
to share brine production from this area on a 50/50 basis. The area
may offer the ability for Lithium South to
substantially increase the overall potential size of the HMN Li
Project. We are awaiting drilling to start in this area.
At the Alba Sabrina claim block, a 400 meter deep pumping well
has just been completed. The next step is a long term pump test
which is currently underway. Early indications are that the well
may offer high productivity. The well was described by the company
as exhibiting strong artesian characteristics, which means the
brine is flowing out on its own. This hole will be very important
in establishing the project viability.
Outside of the Lithium Triangle are still other promising
projects in Latin America,
including the Falchani lithium project in Peru developed by American Lithium
Corp. (NASDAQ: AMLI) (TSXV: LI). Earlier in January 2024, Reuters reported the
Falchani's project value had tripled from the previous forecast to
$5.11 billion and that it would have
a potential operating life of 32 years.
"The very large increase in NPV combined with a low initial
capex and robust economics in the updated PEA for Falchani are the
culmination of successful work programs at site and flow sheet
optimization over the last couple of years combined with an
improved lithium pricing environment," said Simon Clarke, CEO of American
Lithium in the Updated PEA Falchani highlights press
release. "We are also extremely pleased to now include the
compelling strategic and economic value proposition of adding SOP
fertilizer and cesium sulfate by-products to the robust economic
potential of core, high purity lithium production at Falchani. This
PEA update is a major step towards completion of pre-feasibility
work."
In Brazil, Sigma Lithium
Corporation (NASDAQ: SGML) (TSXV: SGML) ended 2023 on a high
note, announcing its fifth shipment of 22,000 tonnes of what
they call "the most environmentally sustainable lithium in the
world" from their Greentech Plant which is operating at its design
capacity of 270,000 tonnes per year. The initial buyer of
Sigma's lithium is mining giant Glencore which
prepaid 50% of the shipment's value upon completion of
loading, reflecting the load's provisional premium price for the
operation's unique Quintuple Zero Green Lithium concentrate.
Sigma followed this up by signing a letter of intention
(LOI) for development bank debt of approximately US$100 million to fund construction of its
fully licensed second Greentech Industrial Lithium Plant.
"Despite the recent deterioration in the outlook for lithium
demand for the short term, the Company believes that with the
appropriate capital structure enabled by this development bank
financing, it has a unique opportunity to solidify its global
industrial competitive leadership in producing low cost and
sustainable pre chemical lithium concentrate," said
Sigma CEO and Co-Chairman, Ana
Cabral-Gardner.
Set to join Sigma as a Brazilian lithium producer in the
near future is Atlas Lithium Corporation (NASDAQ: ATLX),
which back in December 2023 reported
was fully funded to first production in 2024. This came
through gaining commitments with two top lithium chemical
companies: Chengxin Lithium Group and Yahua Industrial
Group, suppliers of lithium hydroxide to Tesla,
BYD, and LG, among others. Goldman Sachs
served as financial advisor to Atlas Lithium through these
transactions.
Atlas would go on to kick off 2024 by intersecting
high-grade lithium mineralization at its Neves Project,
including 1.96% Li2O over 3.4m.
"We remain very encouraged by both the widths and grades coming
out of our latest drilling campaign results," said James Abson, Atlas Lithium's Chief
Geology Officer. "The recently discovered Anitta 4 mineralized
pegmatite cluster is also starting to become more cohesive, with at
least two parallel mineralized dikes now being delineated within
the swarm. These latest intersects continue to expand the pegmatite
body in both down-dip and along-strike orientations."
Source:
https://usanewsgroup.com/2023/10/18/the-lithium-race-to-power/
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