Peter Epstein, CFA, MBA firstname.lastname@example.org EpsteinResearch.com (ER)
These days, investors in emerging lithium companies seem only to care about two things. How close is a property to a producing lithium operation (or basin with high lithium concentrations)? And, how many acres (hectares) is it? Look at Clayton Valley, Nevada, home to Albemarle Corp.’s Silver Peak lithium brine operation. Conventional wisdom says to be as close to Silver Peak as possible, wielding as many acres as possible. However, newly appointed Technical Advisor Malcolm Bell of Nevada Energy Metals, Inc. (TSX-V: BFF) / (OTC: SSMLF) / (Frankfurt: A2AFBV), believes there could be other Clayton Valley-like basins in the State. It’s not the zip code that counts most, but the geological setting and volcanic history.
Is it a certainty that Nevada will become a meaningful lithium suppler? No. But consider that an area of great promise for lithium-ion battery demand is the U.S. Department of Defense, (DOD). I mention it to support my view that, “security of supply” will be a crucial factor going forward. Will the DOD (indirectly) continue to rely on countries in South America and CHINA! for critical lithium-ion battery materials?
If pricing remains stronger for longer, and demand continues to soar, the world will need more lithium, especially from safe, reliable jurisdictions. Companies like Nevada Energy Metals plan to be ready. As a project generator, the Company is well on its way in accumulating a robust portfolio of wholly-owned & JV properties. With Malcolm’s guidance, and the help of new hires (yet to be finalized), the team will have a lot on their plates. In fact, they already do, actively evaluating acquisitions and staking additional promising locations.
On March 22nd, Nevada Energy Metals appointed Mr. J. Malcolm Bell to the Advisory Board and as lead consultant for project acquisitions & land development opportunities.
Mr. Bell has over 45 years of resource industry experience either as principal, director, or senior officer of private & public companies. In 1980, he founded Hi-Tec Resource Management Ltd., a successful minerals exploration company. In 1986, he founded the International Investment & Business Opportunities Exposition, the first investment trade show company in Canada.
In 1997, he co-founded British Canadian Mines Ltd., containing the largest privately held mineral exploration portfolio in Newfoundland; and subsequently completed a $13-million reverse merger on it. In 2002, he helped negotiate a $20-million merger between Olympic Resources Ltd & Whittier Energy Corp. Currently, Mr. Bell heads a private Vancouver-based consultancy that sources projects & capital for companies engaged in mining, renewable energy & technology ventures.
I, Peter Epstein, CFA, MBA, caught up with Malcolm in the week ended April 1st to ask him a few questions. We spoke at length about his background and what he brings to the table. Mostly, he explained how nature has endowed Nevada with ideal conditions that, in select places, allow lithium to become concentrated in clays and brines.
Your extensive experience in natural resources, including sourcing projects & capital, affords you opportunities to serve in advisory roles for many Nevada juniors. Why choose lithium, and why Nevada Energy Metals, Inc.?
Nevada is an area of strong interest for me. At times it’s been for gold or copper, but now my focus is on lithium and its strategic importance. For months before joining the Technical Board, I was working closely with the Company on identifying and locking down lithium-bearing properties and staking ground. I helped them with the 100% acquisition of Teels Marsh West and with their option agreement on up to 60% of Alkali Lake. I’m very bullish on lithium demand and Nevada’s potential role in supplying it.
Regarding Nevada Energy Metals, I’m excited by the pace, the speed at which things are getting done. In addition to the two transactions mentioned, I helped successfully stake a very promising property in the San Emidio Desert basin. On top of that, the Company is already starting a phase 1 exploration program on Teels Marsh West.
So, this is a company that wants to advance properties, not just sit on them. Regarding other lithium juniors, I think that I can add the most value here, by spearheading an aggressive property acquisition mandate. The Nevada Energy Metals has a lot of irons in the fire, the next few months should be a very active time for both me and the Company!
You and Nevada Energy Metals are not alone in being bullish on lithium prospects in the State. What about the climate / geology of Nevada fostered the deposition of lithium in brines?
That’s a great question. Dry desert-like climatic conditions and a favorable geological environment created conditions, over hundreds of thousands of years, that are today prospective for lithium in clays and lithium in brine deposits. There are four main reasons.
Firstly, it’s generally recognized that undrained, or closed desert playa basins are the most prospective locations. Secondly, there should be a history of large-scale volcanic eruptions, contributing large volumes of volcanic ash, containing trace amounts of lithium into the basin. Thirdly, the basin should sit atop, or be in very close proximity to, a geothermal heat source and hot springs.
Finally, there needs to be (or have been) an inflow of lithium-bearing hot spring fluids into the closed basin over a very long period, to boost the lithium content of existing brines. Most important, the same heat source responsible for the hot springs, has to have created a hot water convection cycle. This hot water convection cycle is what ties it all together. Only a trace amount of lithium is in the hot water, BUT over thousands of years the convection cycle deposits lithium into the basin over and over and over again…. The continuous hot springs cycling allows lithium concentrations to build.
Can you tell us about the staking of the San Emidio Desert basin?
Yes, the staking of 86 placer claims covering about 1,700 acres was announced last week. The property is about 60 miles (95 km) northeast of Reno, fairly close to where Tesla is building its giga-factory. The San Emidio Desert basin is an alkali playa environment being fed by lithium-bearing geothermal fluids.
All of the criteria I described earlier is present at San Emidio. To be clear, this does not ensure that favorable brine concentrations will be found. But it shows it’s a promising target to explore and test for a commercial deposit. Given the limited exploration for lithium in Nevada to date, there certainly could be another Clayton Valley-like discovery. If the right conditions are in place, robust lithium brine deposits could be at large.
Can you please explain the initial phase of exploration at Teels Marsh West, and what you hope to accomplish?
Yes, we’re excited to start a surface exploration program on Teels Marsh West next week. The marsh covers roughly 2,000 acres (~810 hectares) in Mineral County. Lithium concentrations at Teels Marsh of up to 850 ppm were reported in sampling programs conducted by the US Geological Survey (OFR: 76-567).
The initial exploration phase consists of 20 shallow holes designed to collect fluid and sediment samples situated nearby a previously discovered thermal area. The area is on, and adjacent to, a range front fault system along the west side of the marsh. Close proximity to a geothermal heat source is believed to be a principal requirement for concentrating lithium in the brines at Clayton Valley.
Finding lithium concentrations is well and good, but the parts per million (ppm) are lower than the brines found in Argentina & Chile, why should anyone care about Nevada?
I’m no expert in lithium fundamentals or pricing, but the only North American producing mine, Silver Peak, is thought to be concentrating brines with initial lithium values of 150ppm to 250ppm. That’s using the decades old technology / process of solar evaporation. Most geologists believe that closed basins in places like Clayton Valley would be able to produce average concentrations of at least 200ppm.
Right, 200ppm is less than South American lithium values, but Nevada is ground zero of several new processing technologies that have potential to be superior to harvesting brines in giant evaporation ponds. To be clear, these technologies are mostly in scale-up phase. Still, most lithium juniors around the world are several years from commercial production, leaving plenty of time for new technologies to catch up.
Thank you Malcolm for your time and insightful answers to my questions. Good luck in your new role at Nevada Energy Metals.
For more information, about Nevada Energy Metals:
Company website: http://www.nevadaenergymetals.com
Trading Symbols: TSX-V: BFF OTC Markets: SSMLF Frankfurt/Xetra: A2AFBV
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