These days, investors in emerging lithium
companies seem only to care about two things. How close is a property to a
producing lithium operation (or basin with high lithium concentrations)?
And, how many acres (hectares) is it? Look at Clayton Valley, Nevada,
home to Albemarle Corp.’s Silver Peak lithium brine operation.
Conventional wisdom says to be as close to Silver
Peak as possible, wielding as many acres as possible. However, newly appointed
Technical Advisor Malcolm Bell of Nevada Energy Metals, Inc. (TSX-V: BFF)/ (OTC: SSMLF) / (Frankfurt:
A2AFBV), believes there could be other
Clayton Valley-like basins in the State. It’s not the zip code that counts
most, but the geological setting and volcanic history.
Is it a certainty that Nevada will become a
meaningful lithium suppler? No. But consider that an area of great promise for
lithium-ion battery demand is the U.S.
Department of Defense, (DOD). I
mention it to support my view that, “security of supply” will be a
crucial factor going forward. Will the DOD (indirectly) continue to rely
on countries in South America and CHINA! for critical lithium-ion battery
materials?
If pricing remains
stronger for longer, and demand continues to soar, the world will need more
lithium, especially from safe, reliable jurisdictions. Companies like
Nevada Energy Metals plan to be ready. As a project generator,
the Company is well on its way in accumulating a robust portfolio of
wholly-owned & JV properties. With Malcolm’s guidance, and the help of new
hires (yet to be finalized), the team will have a lot on their plates. In fact,
they already do, actively evaluating acquisitions and staking additional
promising locations.
On March 22nd, Nevada Energy
Metals appointed Mr. J. Malcolm Bell to the Advisory Board and as lead consultant for project acquisitions
& land development opportunities.
Mr. Bell has over 45 years of resource industry
experience either as principal, director, or senior officer of private &
public companies. In 1980, he founded Hi-Tec Resource Management Ltd., a
successful minerals exploration company. In 1986, he founded the International
Investment & Business Opportunities Exposition, the first investment trade
show company in Canada.
In 1997, he
co-founded British Canadian Mines Ltd., containing the largest privately held
mineral exploration portfolio in Newfoundland; and subsequently completed a
$13-million reverse merger on it. In 2002, he helped negotiate a $20-million
merger between Olympic Resources Ltd & Whittier Energy Corp. Currently, Mr.
Bell heads a private Vancouver-based consultancy that sources projects &
capital for companies engaged in mining, renewable energy & technology
ventures.
I, Peter Epstein, CFA, MBA, caught up with
Malcolm in the week ended April 1st to ask him a few questions. We spoke
at length about his background and what he brings to the table. Mostly, he
explained how nature has endowed Nevada with ideal conditions that, in select
places, allow lithium to become concentrated in clays and brines.
Your extensive
experience in natural resources, including sourcing projects & capital,
affords you opportunities to serve in advisory roles for many Nevada juniors.
Why choose lithium, and why Nevada Energy Metals, Inc.?
Nevada is an area of strong interest for me. At
times it’s been for gold or copper, but now my focus is on lithium and its
strategic importance. For months before joining the Technical Board, I was
working closely with the Company on identifying and locking down
lithium-bearing properties and staking ground. I helped them with the 100%
acquisition of Teels Marsh West and with their option agreement on up to
60% of Alkali Lake.
I’m very bullish on lithium demand and
Nevada’s potential role in supplying it.
Regarding Nevada Energy Metals, I’m excited by
the pace, the speed at which things are getting done. In addition to the two
transactions mentioned, I helped successfully stake a very promising property
in the San Emidio Desert
basin. On top of that, the Company is already starting
(next week) a phase 1 exploration program on Teels Marsh West.
So, this is a company that wants to advance
properties, not just sit on them. Regarding other lithium juniors, I think that
I can add the most value here, by spearheading an aggressive property
acquisition mandate. The Nevada Energy Metals has a lot of irons in the fire,
the next few months should be a very active time for both the Company and me!
You and Nevada
Energy Metals are not alone in being bullish on lithium prospects in the State.
What about the climate / geology of Nevada fostered the deposition of lithium
in brines?
That’s a great question. Dry desert-like climatic
conditions and a favorable geological environment created conditions, over
hundreds of thousands of years, that are today prospective for lithium in clays
and lithium in brine deposits. There are four main reasons.
Firstly, it’s generally recognized that
undrained, or closed desert playa basins are the most prospective locations.
Secondly, there should be a history of large-scale volcanic eruptions,
contributing large volumes of volcanic ash, containing trace amounts of lithium
into the basin. Thirdly, the basin should sit atop, or be in very close
proximity to, a geothermal heat source and hot springs.
Finally, there needs to be
(or have been) an inflow of lithium-bearing hot spring fluids into the closed
basin over a very long period, to boost the lithium content of existing
brines. Most important, the same heat source responsible for the hot springs,
has to have created a hot water convection cycle. This hot water
convection cycle is what ties it all together. Only a trace amount of lithium
is in the hot water, BUT over thousands of years the convection cycle deposits
lithium into the basin over and over and over again…. The continuous hot
springs cycling allows lithium concentrations to build.
Can you tell us
about the staking of the San Emidio Desert basin?
Yes, the staking of 86 placer claims covering
about 1,700 acres was announced last week. The property is about 60 miles (95 km) northeast of Reno, fairly
close to where Tesla is building its giga-factory. The San Emidio Desert
basin is an alkali playa environment being fed by lithium-bearing geothermal
fluids.
All of the criteria I described earlier is
present at San Emidio. To be clear, this does not ensure that favorable brine
concentrations will be found. But it shows it’s a promising target to explore
and test for a commercial deposit. Given the limited exploration for lithium in
Nevada to date, there certainly could be another Clayton Valley-like discovery.
If the right conditions are in place, robust lithium brine deposits could be at
large.
Can you please
explain the initial phase of exploration at Teels Marsh West, and what you hope to
accomplish?
Yes, we’re excited to start a surface exploration
program on Teels Marsh West next week. The marsh covers roughly 2,000 acres
(~810 hectares) in Mineral County. Lithium concentrations at
Teels Marsh of up to 850 ppm were reported in sampling programs conducted by
the US Geological Survey (OFR: 76-567).
The initial exploration phase consists of 20
shallow holes designed to collect fluid and sediment samples situated nearby a
previously discovered thermal area. The area is on, and adjacent to, a range
front fault system along the west side of the marsh. Close proximity to a
geothermal heat source is believed to be a principal requirement for
concentrating lithium in the brines at Clayton Valley.
Finding lithium
concentrations is all fine and good, but the parts per million (ppm) are lower
than the brines found in Argentina & Chile, why should anyone care about
Nevada?
I’m no expert in lithium fundamentals or pricing,
but the only North American producing mine, Silver Peak, is thought to be
concentrating brines with initial lithium values of 150ppm to 250ppm. That’s
using the decades old technology / process of solar evaporation. Most
geologists believe that closed basins in places like Clayton Valley would be
able to produce average concentrations of at least 200ppm.
Right, 200ppm is less than South American lithium
values, but Nevada is ground zero of several new processing technologies that
have potential to be superior to harvesting brines in giant evaporation
ponds. To be clear, these technologies are mostly in scale-up phase. Still,
most lithium juniors around the world are several years from commercial
production, leaving plenty of time for new technologies to catch up.
Thank you Malcolm
for your time and insightful answers to my questions. Good luck in your new
role at Nevada Energy Metals.
For more information, about Nevada Energy
Metals:
(Article/interview of Malcolm Bell, Technical Advisor of Nevada Energy Metals,
for InvestorIdeas.com)
Contact Info: Peter Epstein
845-304-7386
Disclosures: Readers
are charged with conducting their own investment due diligence and recognize
that small cap stocks can deliver a 100% loss of investment capital. The author
or interviewer as the case may be, Peter Epstein, CFA, MBA, believes that he’s
diligent and prudent in screening out companies that, for any reasons
whatsoever, are unattractive investment opportunities. However, he cannot
guarantee that his efforts will be successful. Readers understand that Mr.
Epstein cannot be held accountable or responsible for the accuracy of opinions,
facts, estimates, forecasts and assumptions conveyed herein or for investment
actions taken by readers.
At the time this interview
was published, Nevada Energy Metals was a
sponsor of EpsteinResearch.com. Mr. Epstein owns stock in the Company. He
is not a registered or licensed financial advisor. His article(s) on Nevada
Energy Metals and other small cap companies should be considered very
carefully in this context. Readers are urged to consult with their own
financial advisors before making investment decisions. This company, and
all small cap companies, are highly speculative, not suitable for all
investors.
Any commentary
suggesting that a particular stock is, “under valued,” “over-sold,” a
“compelling opportunity,” is “de-risked,” could be “re-rated,” or similar words
and phrases, are not directed at any individual or group and do
not constitute investment advice. Each individual and group must make
their own determination regarding the suitability of any stock mentioned
herein. Any comparisons between or among stocks are for illustrative purposes
only and are not be taken as fact or relied upon. Nothing herein is to be
considered explicitly or implicitly a part of full and proper due diligence.
This interview and does
not constitute an offer or a solicitation of an offer for the purchase or sale
of any shares or other securities of the companies referred to
herein. There are substantial risks associated with investing in
development stage exploration companies. Potential investors should seek
advice from a qualified financial dealer prior to investing in any company
referred to herein. No securities commission or similar authority
has in any way passed on any of the information contained in this interview.
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