Investing in Lithium Exploration in Canada

The market for battery-grade lithium has exploded over the past few years, and with it the need to develop new sources is getting increasingly urgent. With China controlling a significant portion of both the world’s supply and processing capacity of lithium, both Canada and the United States have prioritized the mineral as critical to national security interests. Electric vehicle companies, like General Motors, have even invested heavily in prospective lithium projects in hopes of securing long-term sources.

Investors may be wise to look at the lithium sector, and particularly at earlier stage projects that show potential for major deposits while still offering plenty of room for upside. Project characteristics that could serve to derisk the investment to some extent may include friendly jurisdictions, accessible property near existing infrastructure, high grades of lithium, and nearby proven deposits.

We recently had a chance to talk with FE Battery Metals Corp. (CSE: FE) (OTCQB: FEMFF) Director Craig Alford, P.Geo, about the company’s lithium exploration projects in Canada. Mr. Alford has extensive global experience in the mining industry, from exploration through mine design all the way to partnership and acquisition negotiations. He has been involved in some of the world’s largest mining projects and some of the world’s largest mining companies. Alford brings his 36 years of experience in the industry to FE Battery Metals and its ~$20 million market cap. Why?

In this interview segment, Mr. Alford discusses the unique market forces that make lithium one of the most intriguing mineral exploration plays in the history of resource development. The convergence of both public and private sector pressure to develop more domestic sources of the critical mineral has created a once-in-a-lifetime opportunity akin to a wartime effort.

Here, Alford further discusses the recent steep lithium price increase resulting from electric vehicle (and lithium ion battery) demand. He touches on current supply barely keeping pace with burgeoning demand, General Motors’ recent commitment to a $650 million investment in a prospective lithium mine in Nevada, and the effects on the investment market for lithium production.

Next, Mr. Alford talks about the drilling results and the geology the company is seeing on its flagship Augustus Lithium Property. The property is located directly adjacent to the North American Lithium (NAL) project, a historically producing mine set to resume production this year after a brief halt in 2019 due to financial problems. The NAL mine houses approximately 80 million tons of lithium at an average 1.5% grade, and has a processing facility on site. FE Battery’s Augustus project is demonstrating similar geology and drill results to this point.

In this segment, Mr. Alford covers the Augustus 2023 drill program that will expand upon FE Battery’s previous exploration. So far the company has been focused on confirming and updating historic results, but a geophysical survey points to the possibility of a greatly expanded strike length than was shown in the past. He is hopeful that this year’s systematic drilling will allow the company to prove a major new lithium resource by providing the information needed to file an NI 43-101 Technical Report.

Mr. Alford talks about FE Battery’s cash position and its ability to fund the exploration and drill program for 2023 as the company seeks to define the lithium resource on the Augustus Lithium Property.

Next, Mr. Alford discusses the importance of mining-friendly jurisdictions and nearby infrastructure in the development of potential mines. FE Battery Metals has extensive holdings in existing mining sectors of both Quebec and Ontario, considered to be some of the best mining districts in the world. With both provincial and federal governments actively promoting the development of domestic lithium sources, FE appears to have the jurisdiction part of the equation handled.

As for infrastructure the company’s flagship and most advanced project, the Augustus Ltihium Property, is directly adjacent to the North American Lithium mine and its processing facility.

Here, Mr. Alford talks about the three types of lithium deposits (brine, clay, and pegmatite) and how they differ in grade and mining techniques. Pegmatite is the highest quality and most concentrated form of lithium, and is the type of deposit found throughout FE Battery Metals’ holdings. 

He also discusses how lithium reserves are measured and how investors can interpret various measurements and concentrations. The pegmatite deposits often exceed 1% grade on average, which doesn’t sound like much but is actually considered a high grade for the critical mineral. FE Battery drilling on the Augustus Lithium Property has regularly been returning results in excess of 1% lithium. The company is still in the process of assembling these results and expanding its drill sites to further define the resource.

In this segment Mr. Alford talks about his professional background covering 36 years in the mining industry, and his recent (8 years) experience evaluating lithium projects.

Finally, Alford discusses what attracted him to the opportunity with FE Battery Metals. The CEO, Gurminder Sangha, and his approach to project acquisition in strategic areas of Quebec and Ontario played a big role in the decision.

Investors looking for upside potential in the lithium market may want to consider explorers like  FE Battery Metals Corp. (CSE: FE) (OTCQB: FEMFF). The company has extensive holdings in proven and friendly mining districts, its flagship property shows great promise as a result of both historical and current exploration, it sits directly adjacent to a large lithium mine in the process of restarting, and many global forces are converging to make projects like FE’s more desirable and feasible than ever. Keep an eye on the company this year as more drill results are announced and it moves toward an NI 43-101 Technical Report to define the lithium resource on the Augustus Lithium Property.