The battery-quality lithium carbonate price in China is up +145% from last summer’s low. Many producers, developers & explorers (call it the top 20%) are up 200%+ from 52-week lows.
While all eyes are understandably on the Middle East crisis, it seems clear to me that gas/diesel prices will remain much higher than two months ago. Not a lot higher for several weeks, but for several months if not quarters.
To be clear, I’m not happy with the state of global geopolitics, and I don’t like the inflationary pressure that’s been unleashed. But, it just so happens that metals/mining companies could outperform in this unfortunate environment.
High gas/diesel prices boost EV & stationary Battery Energy Storage System (“BESS“) demand. Military demand for rare earth elements (“REEs“), copper & lithium should put a floor in pricing this year & next. There is a tremendous amount of talk and action around REEs
A lithium junior that has NOT done as well as most peers is Nevada Lithium Resources. I believe investors are overly concerned about relatively routine risk factors, risks that every lithium hopeful faces.
This is a company with a major U.S. lithium/boron project, with a free option (the potential to ALSO exploit cesium & rubidium + select REEs. As production credits, even very low recovery rates (subject to more studies) could be impactful to project economics.
The following interview of CEO/Dir. Stephen Rentschler was conducted on April 20-21. Please continue reading for the latest update on Nevada Lithium Resources. This is a high risk proposition, but it has true blue-sky potential. Don’t believe me? Decide for yourself!
A busy slide –> post-tax NPV 32.3% –> giant resource –> low op-ex
Please give readers the latest snapshot of Nevada Lithium Resources.
Nevada Lithium is entering the Pre-Feasibility (“PFS“) stage of its Bonnie Claire lithium/boron project, and integrating the latest information on the potential to produce additional critical minerals, namely cesium & rubidium, and possibly a few others.
We are also awaiting the final version of an independent assessment/technical study of the proposed borehole mining method. We anticipate the recommendations from that assessment will lower the cost and reduce the requirements for the PFS.
Bonnie Claire is the highest grade, second largest clay-hosted lithium deposit in N. America. It has the best economics, in my opinion, of any clay-hosted lithium project.
What are the main concerns about Nevada Lithium Resources from prospective investors?
The main concern is that no clay-hosted lithium project is yet in production. Yet, Lithium Americas’ Thacker Pass expects to reach that milestone within 18 months, and we’re rooting for their success.
You should think of clay-hosed lithium plays as the equivalent of copper porphyry projects – massive, long-lived, generating significant production volumes. That’s what the world needs for all the EVs, grid storage & AI centers.
At a time when the origin of critical minerals matters greatly, for geopolitical reasons, Nevada projects like Bonnie Claire will be the centerpiece of the U.S. lithium industry.
What’s the current thinking on conducting a bore hole mining study?
We are waiting on the final version of our independent assessment of borehole mining, but we’re confident we will not need to perform a borehole mining field test at Bonnie Claire until after the PFS.
The international engineering firm chosen to perform this assessment has tremendous in-house experience with borehole mining, and is quite comfortable with it for Bonnie Claire.
There will be additional scientific work recommended to offset the absence of an actual field test, and that’s fine. By waiting to perform the test until after the PFS, the cost and complexity of the PFS will be considerably less.
Lithium prices have more than doubled from last summer’s low, what about boron (or boric acid) prices?
I believe we are above the born price modeled in our PEA. As with so many commodities, there will be tremendous differences between exchange-listed prices and physical prices (being higher).
A potential bifurcation in boric acid prices (U.S. aligned, vs. China aligned), similar to lithium, is positive for juniors like Nevada Lithium. Future supply is questionable as 70% of supply is controlled by Turkey, and Rio is looking to rationalize its U.S. Borax operations.
We were conservative in our PEA with boric acid prices. I’m confident our boric acid by-product credit will continue to improve.
Although cesium & rubidium are not yet in the mine plan, and might not be exploitable, can you talk briefly about the markets for these two critical elements?
Cesium & rubidium share properties that make them useful in many high-tech industries. Precision atomic clocks needed for GPS, night vision, magnetometers, lithium & sodium-ion batteries, all benefit from cesium & rubidium.
Cesium is also used in high temperature drilling fluids, which are increasingly required as drilling depths continue to increase.
I imagine this is next year’s business, but what are your thoughts on securing a strategic partner?
We have been sowing the seeds for potential strategic relationships since Nevada Lithium’s IPO. Earlier I talked about global lithium demand. That demand profile is why I started talking to folks at such an early stage of our development.
There’s a clear preoccupation with copper at this time. However, in my view, many “traditional” strategic partners will be moving lithium higher up on their lists as additional demand has emerged (think BESS & AI data centers).
If one agrees gasoline/diesel prices will remain elevated following the conclusion of hostilities across the Middle East, that’s positive for EV / BESS demand. This, plus Thacker Pass coming online, will revamp the interest of partners looking for massive, long-lived assets like ours.
Some prospective partners may hail from new areas, like Li-ion battery manufacturers (see recent CATL news), defense companies, or AI giants.
Again, probably not soon, perhaps after a PFS, but could Nevada Lithium potentially sign partially pre-paid off-take agreements?
Absolutely. The strategy for this is the same as talking with potential strategic partners – start talking early, keep lines of communication open. It’s clear that U.S. auto manufacturers (other than Tesla) did not handle their EV rollouts well.
However, over time I fully expect JVs between Chinese & U.S. OEMs, partnerships with production on U.S. soil. U.S. OEMs will scramble for off-take, competing against defense & AI companies.
What keeps you up at night regarding Project risks?
Projects like Bonnie Claire are big & complex. In my opinion, our giant project size contributes to an additional layer of perceived risk that simply isn’t there. When I pull apart the different facets of our Project, I see risk factors that are quite manageable.
Will all the hurdles be easy to clear? No, but each one is manageable, and we have years to pull everything together. Our starting point, a location in the best mining jurisdiction, with no endangered species etc., is great.
Our mining method & metallurgy look good at this stage of development, and lithium prices have well more than doubled from last summer. Our high-grade, massive resource is the foundation for excellent Project economics.
Finally, we have the potential to produce more than just lithium & boron, additional critical materials which are effectively attractive free options (subject to more studies) on an already robust mine plan at Bonnie Claire.
Thank you Stephen. I remain excited about the ongoing rebound in lithium prices and am glad to hear your encouraging update on borehole mining.
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