There’s a sign at the old Irgon Mine in Manitoba, Canada that identifies that exactly none of the 1.2 million tons of lithium oxide was extracted despite a three-compartment, 241-foot-deep shaft being built and 366 meters of drifting at the 200-foot mark. Problem was that despite the mining operations by the Lithium Corp. of Canada during 1956 and 1957 setting the stage for lithium production, work was suspended to wait for “a more favourable market for lithium oxide.”
The sign, put up by the province as a landmark on what looks to be a headframe, has proven to be visionary, noting the everyday uses for lithium, while calling out that “Light weight [sic] lithium batteries may be used in electrical cars of the future.”
60 years later, the future is now and Quantum Minerals Corp. (TSX-V: QMC) has the mineral rights to the 700-hectare project, known more broadly as the Irgon Lithium Mine Property.
Manitoba has a long history as a mining-friendly and resource-rich province, including producing about 12% and 24% of the nation’s nickel and zinc, respectively, annually and ranking in the top 20 in the world for mining investment by the Fraser Institute. The Irgon Mine was important to the region, underscoring why Provincial Road 314 was constructed to provide access to what was expected to be a vibrant mine and prolific mining area.
To that end, all the necessary mining infrastructure was put into place as well, including the construction of mine buildings, including a 500-tonne-per-day mill. With the project being mothballed, the buildings were removed and the mine shaft covered with a concrete slab in 1963. 60 years allows for a lot of overburden to grow, which Quantum Minerals has been focused on removing to make access to the Irgon pegmatite dike.
They’ve been pleasantly surprised with what they’ve found, including building foundations that are still in surprisingly good shape, according to Quantum Minerals CEO Balraj Mann.
Lithium Gap: Spodumene-Bearing Pegmatite vs. Brine
Lithium, which historically has many uses, including lubricants and ceramics, is the metal of the 21st century due to being the vital component in rechargeable batteries used in electronics and electric vehicles. The EV evolution gathering momentum over the last year has set the industry on its side, sending lithium prices soaring from $7,000 a metric ton to over $22,000.
While the EV evolution is still nascent, pundits are forecasting a lithium supply shortfall in the coming years. Goldman Sachs called lithium the “new gasoline” and called for demand to triple by 2025, begging the question, “Where will the supply come from?”
Without getting into too much geological-speak, spodumene-bearing pegmatite is known for its qualities to host lithium and rare earth elements. It is the host to high-grade lithium ore that is mined through conventional mining techniques, or “hard rock” mining, in Australia, Portugal and Zimbabwe. While “brine” or “salar” lithium may be the hot talking point in the lithium space today, not an ounce of brine comes from Australia, every ton of the 40% of the world’s lithium supply that comes from Australia is derived from hard rock.
Lithium-bearing brines are usually associated with some type of volcanic event in history and found in desert areas, namely in the “Lithium Triangle” of Chile, Argentina and Bolivia, and some arid parts of the U.S.
People are jumping on the brine bandwagon due to the fact that it can be produced more quickly than hard rock lithium. Producing lithium concentrate from evaporation ponds takes about 18 months, while a few companies are touting new technologies to be able to trim production down to less than a day.
In a conversation with Baystreet.ca, Mann explained that production from brine has its own set of challenges that isn’t in the headlines like the time factor. Water availability, high capital input and, most importantly, consistent, repeatable lithium purity are additional problems that abound brine production.
There’s More to Spodumene Than Just Lithium
Mann added that hard rock mining also provides valuable byproduct. The Irgon Lithium Mine property hosts several Li-Ta+/- Cs (lithium, tantalum and cesium) mineralization within its pegmatite. Tantalum has many uses, including dental and surgical instruments, capacitors and resistors for electronics and alloys. Cesium, one of the only metals that is a liquid at or near room temperature has many uses related to electricity production as well as applications in drilling fluids.
Speaking of cesium and tantalum, the Tanco Mine of S&P 400 component Cabot Corp. (NYSE: CBT) is located just 20 kilometers to the south of the Irgon Lithium Mine property. Discovered right around the same time as Irgon and opened and closed a number of times over the years, Tanco contains two-thirds of the world’s known cesium resource and is the largest producer of the rare earth metal in the world today.
Mann thinks there could be real value in the not just the at least 1.2 million tons of lithium oxide thought to be contained in the rocks at Irgon dike , but also the other metals.
“Companies and countries alike are looking ahead at a possible lithium supply/demand imbalance and looking to lock-down lithium supply chains now,” said Mann. “Tesla’s doing it; Volkswagen is making attempts as it aims to become the global leader in EVs and we’re watching China take control of future lithium supplies right before our eyes. I expect to see a lot more activity along those lines as competition heats up,” he added.
Early in 2017, Australia’s Pilbara Minerals (ASX: PLS) penned a two-year tantalum offtake agreement with Global Advanced Metals and a separate deal with Atlas Iron to supply lithium ore. Atlas isn’t even waiting for Pilbara to crush the rock, as the deal calls for DSO (direct ship ore) to the tune of between 1.0 and 1.4 million tonnes over 15 months.
When pressed if that would be a model QMC might employ, Mann, who has attracted some of the brightest minds in lithium and pegmatite to his team, said they were not making any commitments to anything until they knew exactly what was trapped in the spodumene bearing pegmatite. “We’re quite confident that there will be demand for our concentrate, ore or combinations. Anything is possible and we will evaluate all opportunities to maximize corporate value at the appropriate time. Once we confirm grades, then we can start looking at agreements,” said the QMC CEO.
Those milestones include sampling to reiterate the historic resource of 1.2 million tons grading 1.51% Li2O over a strike length of 365 meters and to a depth of 213 meters, producing concentrate, bulk samples and drilling to construct a NI 43-101-compliant report on the property. A milestone was met recently, with the company announcing on Wednesday that the fall sampling program was completed and a total of 144 sawn channel samples were sent off for analysis. The program was focused on making cuts (a total length of 139.1 meters were sampled) from several sites across the width of the Irgon Dike.
There is plenty of room for expansion too, as the geos tell Mann that mineralization remains open at depth and along strike. Furthermore, there are additional dikes to the north and south of the original mine that need to be explored.
That goes without mentioning the massive 23,000-hectare VMS (volcanogenic massive sulfide) in the Namew Lake District in Manitoba that is owned 100% by Quantum. While all the focus right now revolves around the lithium property, it is overshadowing a property located in close proximity to the producing 777 Mine in the Flin Flon Mining District with a production rate of 1.5 million tonnes per year of copper, zinc, gold and silver. It’s also to the southwest of the Namew Lake Mine that produced 2.57 million tonnes of copper, nickel, gold, silver, palladium, and platinum.
Mann conveyed that he thinks his company is in a pretty enviable position as the year winds to a close and well positioned for a solid 2018. With only days left in December, that just may be the understatement of 2017. It doesn’t take the type of prognostication abilities that the Manitoba government had six decades ago to see that.
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