Why Canada has become lithium central, with a cesium sweetener.
Canada is minting some of the biggest new critical metals miners in the world, and international money has been pouring into this corner of the lithium sector for the past year and a half, pushing million-dollar market-cap miners over the billion-dollar mark and completely changing the game.
Companies mentioned in this release include: Sociedad Química y Minera de Chile S.A. (NYSE: SQM), Albemarle Corporation (NYSE: ALB), Lithium Americas Corp. (NYSE: LAC), Freeport-McMoRan Inc. (NYSE: FCX), BHP Group (NYSE: BHP).
Junior miner Patriot Battery Metals (PMETF) made a huge lithium discovery in 2022 and saw its market cap explode by over a billion. This might have been the main attraction in North American lithium in recent months, but now a new attraction is emerging, and it’s not just about lithium.
The new attraction is Ontario’s Case Lake, a property that has lined up discoveries of three of the world’s critical metals: lithium (Li), tantalum (Ta) and the exceedingly rare cesium (Cs).
In addition to a trifecta of critical commodities, it also enjoys three distinct advantages over last year’s biggest North American lithium finds: Easy access (no helicopters required), full infrastructure (including cell phone signals), and pegmatite that is exposed on the surface and running less than 50 meters deep for some of the least expensive mining in Canada.
It’s an attraction that has earned Power Metals Corp (PWM,PWRMF), the 100% owner of the Case Lake property, attention and investment from some of the biggest names in critical metals mining.
Power Metals was an early player that started out with a high-grade lithium discovery in 2017. A year later, while still exploring for lithium, Power Metals hit a rare surprise: cesium, a critical metal so rare that it has recently become the focus of a superpower battle between China and the West.
This set-up is why Australian mining giant Winsome Resources jumped at a unique opportunity that arose when the Canadian Federal Government ordered all Chinese companies to divest shares in Canadian critical metals mining companies late last year, citing national security concerns.
When Winsome scooped up Hong Kong-based Sinomine’s Resources Group shares in Power Metals it was eyeing that 3X collection of commodities.
Then Winsome doubled its stake (from 5.7% to 10.13%) after it looked under the hood of Case Lake and saw the clear advantages that appear to indicate it could be a much faster and cheaper development than other lithium-focused projects.
The chance to get in on the first potential cesium play in North America wasn’t lost on one of Winsome’s biggest shareholders, either. Shortly after Winsome doubled its stake, Waratah Capital (one of the largest lithium funds in the world) moved to invest in Power Metals and then used its Lithium Royalty Corp to purchase a 2% royalty on future Case Lake lithium production for C$1.5 million.
The Case Lake Discovery
So far, Power Metals has drilled 80 drill holes over some 15,000 meters at Case Lake, making a significant world-class, high-grade (over 4%) lithium discovery at very shallow, open depth.
Some highlights from this discovery include:
- 1.94% Lithium and 323.75pp Tantalum over 26 meters
- 2.07% Lithium and 213.96pp Tantalum over 18 meters
- 4.75 % Lithium and 396.00pp Tantalum over 2 meters
- 1.71 % Lithium and 240.77pp Tantalum over 12 meters
- 1.20 % Lithium and 218.68pp Tantalum over 19 meters
Then, the real surprise: a cesium discovery with some of the highest-grades found in decades (up to 24% at good intervals).
Highlights from that discovery include:
- 24.07% Cesium over 1 meter
- 20.36% Cesium over 1 meter
- 22.22% Cesium over 2 meters
- 7.65% Cesium over 7.09 meters
Now, with a new class of Western investors on board, doubling their stake and bringing on Winsome’s Managing Director, Chris Evans, to the board and a veteran international mining financier as CEO (Gerry Brockelsby) to the game, the Case Lake project has been shifted into overdrive. And Power Metals is now fully funded for the next two years of its planned exploration, which includes an additional 15,000 meters of drilling, starting any day now.
Canada’s Critical Metals Mission
For North America, the future is all about ensuring an absolutely secure supply of critical minerals, and that means keeping Chinese hands out of the pie to avoid Beijing’s weaponization of metals that are the key to global technological superiority.
On the lithium and cesium front, Canada is leading this cold war because of its geology, but it’s doing it with full-on support from the United States. While lithium is a key concern when it comes to supply chains for a North American energy transition, cesium is the national security bogeyman.
Cesium’s high-level applications lend it superpower status. From its application in high-pressure, high-temperature offshore oil and gas drilling to its vital role in the global 5G race, it’s as rare as it is vital.
Cesium bromide is used in infrared detectors, optics, photoelectrical cells, scintillation counters and spectrometers. Even more critically, cesium is necessary for maintaining atomic resonance frequency standard in atomic clocks: That means if there is no cesium, there are no aircraft guidance systems, no global positioning satellites, and no internet and cellular telephone transmissions.
When the Canadian Federal Government moved last November to kick the Chinese out of the North American critical metals game, specifically focusing on Sinomine’s stake in Power Metals (PWM,PWRMF), it was a wake-up call for investors.
The Showdown Has Begun, And Resource Companies Are In The Spotlight
Albemarle Corporation (ALB), based in North Carolina, is a leading specialty chemical company with a particular focus on lithium production. Its Lithium and Advanced Materials segment leverages its lithium expertise to deliver solutions to its customers. The company also offers bromine and bromine-based solutions and catalysts, among other things.
The expansive global presence of Albemarle, with operations in several countries worldwide, presents a diversified operational risk, which could be attractive to investors. Furthermore, the company’s focus on lithium, a key ingredient in the rapidly growing electric vehicle market, could make it an interesting prospect for investors anticipating continued growth in the EV sector.
Sociedad Química y Minera de Chile (SQM) is one of the world’s leading lithium producers, with operations concentrated in Chile. The company is involved in various areas, including specialty plant nutrition, iodine and derivatives, lithium and derivatives, industrial chemicals, and potassium.
Its presence in the lithium market is particularly robust due to the company’s access to Chile’s abundant lithium reserves. Investors could be attracted to SQM for its lithium production capacity and its strategic location in one of the world’s most lithium-rich areas. The diversified product offering also adds to its resilience and appeal for potential investors.
Lithium Americas Corp (LAC) is a Canadian-based lithium company with two world-class lithium projects in Argentina and the United States. The company’s projects, Cauchari-Olaroz and Thacker Pass, are among the largest and most promising lithium operations globally.
LAC’s growth potential might be attractive to investors, given the increasing global lithium demand, primarily driven by the electric vehicle and renewable energy sectors. Its strategic geographic presence in two key markets, North America and South America, also underscores its appeal.
Freeport-McMoRan Inc. (FCX) is one of the world’s leading copper producers, with operations primarily concentrated in North and South America. Besides copper, the company also produces significant amounts of gold and molybdenum. FCX’s expansive operations and its strategic location in copper-rich regions may attract potential investors.
Additionally, the company’s exposure to copper, a metal with growing demand in the green energy sector due to its use in wind and solar energy technologies and electric vehicles, may make it appealing for those interested in betting on the renewable energy transition.
BHP Group (BHP) is a multinational mining, metals, and petroleum company with a diverse portfolio of operations around the world. Its main products include iron ore, coal, copper, and petroleum, with a growing focus on nickel and potash. The diversity of BHP’s portfolio can act as a hedge against price volatility in any single commodity, which could appeal to investors looking for stability in the often volatile mining sector.
Moreover, BHP’s recent efforts to capitalize on the growing demand for battery metals,, present an attractive opportunity for investors anticipating the continued expansion of the electric vehicle and energy storage sectors.
Why Canada Has Become Lithium Central, With a Cesium Sweetener, LONDON, June 27, 2023
