Quebec has the largest known deposit of lithium oxide in America, according to an initial mineral resource estimate at the James Bay Corvette property released earlier this week.
Lithium is a sought-after metal in the manufacture of lithium-ion batteries that power electric vehicles.
During a drilling campaign in 2021-2022, an exploration company obtained close samples with an average grade of 1% and more of lithium oxide (Li2O) about twenty times on the Corvette property, at the James Bay.
An average lithium content of 1% attracts the attention of the mining world.
Patriot Battery Metals released an initial estimate of lithium oxide (Li2O) resources at its Corvette property in James Bay. The result released earlier this week places the property as the number one known lithium deposit in America and the eighth in the world, according to the company.
The mineral resource estimate for the CV5 area at Corvette is 109.2 million tonnes at 1.42% Li2O and 160 ppm (parts per million) inferred tantalum oxide (Ta2O5) for a total of 3,835,000 tonnes of lithium carbonate equivalent.
It takes a factory to turn spodumene into lithium carbonate. Lithium carbonate is an input in the manufacture of lithium-ion batteries. A ton of lithium carbonate sells for around US$35,000 this summer.
The Inferred Mineral Resource evaluation is based on open pit mining, a cut-off or cut-off grade of 0.40% Li2O, a spodumene concentrate price of US$1,500/tonne and an exchange rate US$0.76/CAN$.
“An inferred mineral resource is that part of a mineral resource for which quantity and grade (or quality) can be estimated,” reads the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards ), but the degree of confidence granted is lower than that granted to an indicated mineral resource. It is reasonable to expect that the majority of Inferred Mineral Resources will achieve Indicated Mineral Resource status as a result of continued exploration. »
The cut-off grade, on the other hand, is the lowest value that can support profitable mining according to the assumptions used in the resource calculation.
The resources of the CV5 sector extend over a length of 3.7 kilometers. The deposit remains open at the ends along strike and remains open at depth for part of the 3.7 kilometer strike length.
The spodumene pegmatite (igneous rock) of sector CV5 at Corvette is located approximately 13.5 km south of the Transtaïga road and electrical infrastructure and less than 50 km from the La Grande 4 (LG4) hydroelectric dam complex.
The stock of Patriot (PMET.V, Venture Exchange) fell 7.14% during Monday’s session to end around $14.30. The same stock was selling for $0.30 on November 25, 2021.
“I think that’s an estimate below some people’s expectations,” independent mining analyst Éric Lemieux said by email. But this is a first estimate in an emerging district. There are some complexities, but that was to be expected geologically. »
The results revealed remain in line with what was expected by financial analysts, argues Desjardins Securities analyst Frédéric Tremblay, in a note published Monday.
According to him, the magnitude of the resources announced is particularly impressive since the initial resource estimate only concerns the CV5 sector. However, other pegmatite clusters are known at Corvette in areas CV4, CV8, CV9, CV10, CV12 and CV13. Moreover, drill results are expected by the end of the fall for the CV5 and CV13 sectors, underlines Mr. Tremblay.
“Given the expected growth of the North American battery market, we believe size matters when it comes to lithium resources. Significant assets are more likely to attract significant interest and offers, whether for an acquisition or a partnership. Patriot is in the enviable position of still owning 100% of Corvette,” he wrote.
“As of June 30, 2023, we estimated a value for the project of CAN 2.9 billion, using the discounted cash flow method,” calculated Mr. Tremblay of Desjardins Securities.
The CV5 sector mineral resource estimate at Corvette was highly anticipated by the market. Exploration companies at nearby Corvette properties had a good day on the stock market on Monday.
Midland Exploration (MD.V, Venture Exchange), which owns rights to the Mythril-Corvette property near Corvette, gained 2% to $0.52.
For its part, Azimut (AZM.V, Venture Exchange), which owns Pikwa, in immediate continuity of the Corvette property, advanced 1.65%, to $1.23.
