It is a soft, silvery white metal that seems to be part of the wave of the future. Some in the industry even label it the oil of the new millennium.
Globally, in its raw form, the resource is abundant. The barriers to harvest it though are the costs of mining it and the antiquated extraction technology being used by many companies to do so.
Demand for lithium will continue to grow alongside electric cars and high capacity electric storage.
The supply market for lithium is poised to become very tight over the next decade, and that can be seen in its lofty spot price which is hovering at $18,000/tonne.
Several major countries are now mandating 100% EVs by 2040, phasing out gas-powered vehicles.
“Two years from now, we will be producing 10,000 tonnes of lithium,” the CEO of LithiumOre, told Proactive Investors in an interview in New York City. He believes the company is ideally positioned to step up as a source for the metal in the future, if not, a few months from now.
Taking aim at being number one
“We will definitely be the leader” in the space, Cole, a 62-year old executive who graduated from the University of California at Berkeley said. “In Nevada, we’ve got a ton of assets. The key is to refine it,” Cole added.
LithiumOre is a resource exploration and development company whose top focus is the establishment of a low cost, environmentally sound production base to supply the rapidly growing lithium-ion battery industry for both mobile devices and laptops, as well as the burgeoning EV (electronic vehicle) industry.
Its focus is on hitting that target through the timely development of valuable production-grade lithium brine deposits in Nevada.
The profitability of the industry is illustrated by market leader Albemarle Corp (NYSE:ALB), whose profitability rose due in part to price increases for the mineral. The company posted third-quarter net income of $129.7 million, up from $118.7 million in the year-ago period.
Extraction method a major edge for LithiumOre
Cole said the company enjoys a critical advantage over its competitors.
Lithium extraction from brines is accomplished through a series of evaporation ponds, a process that can take up to two years to complete and requires a tremendous amount of water, making the technique unacceptable in an increasingly environmentally conscious United States.
This kind of mining process though is still seen in unstable geographical areas such as Chile, Bolivia and Argentina — countries that are known collectively as the "Lithium Triangle."
LithiumOre said the key to unlocking this invaluable and highly profitable resource is the development of an extraction technology that requires less water and can significantly reduce the current two-year timeline to market.
So while others still use evaporation ponds, Cole’s company believes they can do it far more rapidly.
“Our technology can do it in less than a week,” he said.
If successfully done, LithiumOre will capitalize not only on the battery metals within its land holdings, but also through marketing the proprietary extraction technology itself.
The company will not only extract battery metals from its 26,000-acre land holdings in Nevada but will provide the technology as a service to other neighboring mining companies.
“This simultaneously creates a technology side to our business with an entirely new revenue stream independent of our mining operations and realizes our goal of becoming a fully integrated lithium mining and production company,” said Cole.
“We end up as the toll booth for everybody,” Cole said in explaining the way other companies may have to pay them to extract their lithium.
Cost of production a strong factor
Cole said LithiumOre's ability to produce lithium will be at less than $2,000/tonne. The company will still be making money even if the technology used in the industry gets the cost down to $5,000/tonne, he explained.
The biggest potential customer for the metal would be the US government, Cole said. “I can ship the stuff in three hours,” he pointed out.
With lithium processing plants going up in various parts of the US, Cole believes they will be in business for quite a while.
LithiumOre’s new Battery Metals Extraction Division will be located on the company’s current land holdings and close to its Railroad Valley Lithium Project in Nevada, believed to contain at least one million metric tons of lithium carbonate.
The Division will potentially, alongside a yet undisclosed partner, design and utilize the most advanced battery metals extraction technology on the market and will complement the Railroad Valley Lithium Project and future mining projects.
The company said it engaged experts in the second half of 2018 to evaluate the region and the Western Nevada Basin (WNB) Claim to target on-site exploration efforts.
They determined that 300 claims of the WNB Claim were desirable for the company’s planned exploration, which should begin in the second half of 2018.
The Railroad Valley lithium exploration project is in east-central Nevada and is situated on the western side of a very large closed topographic basin that encompasses an area of approximately 2,000 square miles (5,180 square kilometers). The project has a geologic setting that is conducive to the formation of lithium-enriched brines, the company stated.
The Railroad Valley Phase 1 drilling program has begun, initially consisting of approximately 750 meters (2,500 feet) of drilling, to test the major high-grade lithium corridors identified on the Project Permit from the BLM for ongoing drilling which was issued on July 13, 2018.
“If we do (produce) the 10,000 tonnes (of lithium), this could be a huge grand slam,” Cole declared.
LithiumOre partner 3PL CEO Vince Ramirez maintains LithiumOre’s Railroad Valley Lithium Project is located at the center of “one of the largest brine deposits in the world.” Ramirez posits there are “30 billion barrels of brine within the Railroad Valley brine pool.”