USA News Group
Commentary
Issued on behalf of Lithium South Development
Corporation
VANCOUVER, BC, May 3, 2024
/CNW/ -- USA News
Group – Despite what appears to be a supply
glut currently in the global lithium market, already there are
signs of a lithium rebound on the horizon. According to
Statista, global lithium demand is projected to
grow through next year, while Fastmarkets predicts
lithium supply will increase 30% in 2024. Fastmarkets
also expects that by 2030, US lithium demand alone will grow by
nearly 500%. Looking ahead, lithium miners continue to move their
chess pieces onto the board with anticipation of long-term rewards,
including the work of Lithium South Development Corporation
(TSXV:LIS) (OTC:LISMF), Sociedad Química y Minera de Chile S.A.
(SQM) (NYSE:SQM), Piedmont Lithium Inc. (NASDAQ:PLL),
Lithium Americas Corp. (NYSE:LAC) (TSX:LAC), and Rio
Tinto Group (NYSE:RIO).
Lithium South Development Corporation (TSXV:LIS)
(OTC:LISMF) recently filed a new Preliminary Economic
Assessment (PEA), which provides support for the company to proceed
with development plans for a 15,600 tonnes per year lithium
carbonate plant. As per the PEA, the project's financial model
shows a Net Present Value (NPV) after tax of US$938 million, and an after-tax Internal Rate of
Return (IRR) of 31.6%, with a 2.5-year payback.
"We are very pleased to have achieved this important milestone
for the HMN Li Project," said Adrian F.C.
Hobkirk, Founder, President and CEO of Lithium South.
"The robust economics and room for expansion indicate a promising
future for Lithium South."
The HMN Li project is planned to use an extraction and recovery
process based on conventional solar evaporation of the well brine.
Magnesium and other contaminants will be removed using industry
standard proven methods including liming. The concentrated
lithium solution will then be processed into lithium carbonate
technical grade.
The PEA announcement came just weeks after the company announced
the expansion of its ongoing production well drill program. A 400
meter deep pumping well has been completed at the Alba
Sabrina claim block, which at 2,089 hectares is the project's
largest. Recent efforts at the well successfully cleared out
sediments, leading to the flow of clear brine with strong artesian
characteristics, suggesting potential for enhanced brine extraction
rates. To maximize these benefits, Lithium South has
contracted a significantly larger 80-kilowatt pump, and is now
completing a long term pump test. Based on results, further wells
are planned for Alba Sabrina and the southern claim blocks at
Viamonte and Norma Edith.
"These developments on the Alba Sabrina claim block could
potentially enhance our operational capacity," said Hobkirk. "The
completion of this pumping test, anticipated by the end of May,
will provide critical technical insight into the capacity potential
of this area of the salar."
Earlier in the year, Lithium South together with the
Korean conglomerate POSCO, entered into a cooperative
development agreement on the HMN Li Project, representing a
crucial step forward in advancing towards lithium production.
Previously, towards the end of 2023, Lithium South also
released an updated NI 43-101 technical report for its premier
HMN Li asset, which demonstrated a significant 175% boost in its
lithium resource, amounting to over 1.58 million tonnes of lithium
carbonate equivalent (LCE).
According to Chile's
Sociedad Química y Minera de Chile S.A. (SQM) (NYSE:SQM),
there will be steady lithium prices in the coming months,
despite the supply glut. In particular, SQM is optimistic
for the second half of the year, which the company predicts will
entail higher sales volumes.
"As we enter into 2024, we anticipate another robust year of
growth in lithium market, with global demand increasing by at least
20%, supported by electric vehicle sales growth globally and
increasing demand for battery materials," said Ricardo Ramos, CEO of SQM. "However, the
excess in lithium and battery materials capacity seen during last
year is expected to continue during this year, keeping pressure on
lithium market prices. We expect our average lithium prices to
remain relatively stable throughout the year and our sales volumes
to increase slightly during this year, subject to market conditions
and any changes in supply-demand balance."
This optimism was shared by Keith
Phillips, CEO of Piedmont Lithium Inc. (NASDAQ:PLL)
in an interview with Yahoo! Finance Live.
"[When it comes to mining] low prices are the cure for low
prices," said Phillips, adding that "it's a matter of time" that
prices will rebound. How fast that rebound occurs is still to be
determined, however, Piedmont isn't slowing its march.
Just recently, Piedmont
received its state mining permit from the state of North Carolina, where the company owns 3,600
acres, from which it plans to mine spodumene from at least half of
the area. Piedmont will
then convert the material to lithium hydroxide, which is key to the
manufacturing of EV batteries.
"We look forward to continued engagement with the local
community and the Gaston County
Board of Commissioners," said Phillips. "We have had extensive and
ongoing dialogue with possible funding sources for Carolina
Lithium."
Domestically sourced lithium is projected to become even more
desirable, especially with US government incentives underway.
Lithium Americas Corp. (NYSE:LAC) (TSX:LAC) recently secured
a record $2.26 billion loan from
the US Department of Energy to build its Thacker Pass lithium project in Nevada.
Construction began at the site located just south of the
Nevada-Oregon border in March
2023, following a lengthy and intricate legal
victory over conservationists, ranchers, and Indigenous
groups. Lithium Americas anticipates finalizing
securing a loan later this year, pending the completion of final
environmental assessments. Once the financing is in place, the
company aims to commence substantial construction activities, a
project slated to last three years. The initial phase of the mine
is projected to yield 40,000 metric tons of battery-grade lithium
carbonate annually, sufficient to supply up to 800,000 electric
vehicles.
"Our team has been focused on refining the development plan and
de-risking construction execution of Phase 1 for Thacker Pass," said Jonathan Evans, President and CEO of Lithium
Americas. "We have de-risked execution by advancing detailed
engineering and project planning. To date, we have completed all
the early-works and infrastructure required for major construction,
including excavating the processing plant areas."
Looking at multiple international lithium projects, mining giant
Rio Tinto Group (NYSE:RIO) has already expressed the company
remains bullish on lithium despite not currently seeking any
big acquisitions. Back in March, Rio Tinto committed to
spending $350 million on its
Rincon lithium project in Argentina, set to commence production by the
end of the year.
This comes just months after the President of Serbia expressed
interest to hold further talks with Rio Tinto regarding
its Jadar lithium project, after the country revoked licenses on
the $2.4 billion asset in 2022. If
brought to completion, the project could supply 90% of Europe's current lithium needs, and make
Rio Tinto a leading lithium producer. As well, Rio
Tinto held talks with the country of Rwanda back in January for the exploration and
mining of lithium in the East African nation.
"[Rio Tinto is] "excited to be partnering with the
government of Rwanda, applying our
global experience to accelerate the search for primary lithium
deposits in Rwanda's Western
Province," said Lawrence Dechambenoit, global head of external
affairs at Rio Tinto. The move could further unlock the
potential of another country's mining sector, if successful.
Source:
https://usanewsgroup.com/2023/10/18/the-lithium-race-to-power/
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Mr. William Feyerabend, a
Consulting Geologist and Qualified Person under National Instrument
43-101 participated in the production of this advertisement, and
approves of the technical and scientific disclosure contained
herein pertaining to Lithium South.
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