A potential world-class source of lithium

Cypress Development’s Clayton Valley lithium project in Nevada is on track to be a potential world-class source of lithium for the global electric vehicle market

Lithium has become a critical component of our modern age and is used in rechargeable lithium-ion batteries for a range of electronics, including mobile phones, laptops, cameras, and hundreds of other devices.

Furthermore, lithium-ion batteries are increasingly replacing lead-acid batteries in road transport and are transforming the market for hybrid and electric vehicles by significantly extending their range.

For instance, there were only 17,000 electric vehicles on the world’s roads in 2010. By 2019, that number had swelled to 7.2 million, with nine countries having more than 100,000 electric vehicles on the road, according to the International Energy Agency’s Global EV Outlook 2020 report, published in June.

The report says that electric vehicles accounted for 2.6% of global car sales and 1% of global car stock in 2019, with sales of electric vehicles topping 2.1 million globally. And as technological progress in the electrification of two and three-wheelers, buses, and trucks advances and the market for them grows, electric vehicles are projected to expand significantly over the coming years.

Lithium is highly reactive, and because of this high reactivity, it does not occur as a pure element in nature but is contained within minerals in a range of hard rock types or in brine solutions in salt lakes, called salars.

Cypress Development (TSXV: CYP), an exploration and development company with headquarters in Vancouver, is focussed on developing a world-class resource of lithium at its flagship Clayton Valley Lithium Project, located in Esmeralda County in Nevada and 10 km east of the community of Silver Peak.

“The project is one of three advanced-stage lithium projects in Nevada and is adjacent to the Albemarle Silver Peak mine, the only lithium brine operation in North America,” said Bill Willoughby, director and CEO of Cypress. “The size of the resource at Clayton Valley could make it a very significant lithium source for the global lithium market.”

Situated immediately east of Albemarle’s (NYSE: ALB) Silver Peak mine, which has been in continuous operation since 1966, Clayton Valley was discovered by Cypress in 2016. The company’s exploration and development work revealed an extensive deposit of lithium-bearing mudstone and claystone, with lithium mineralisation occurring within montmorillonite and illite clays throughout the sediments to a depth of 120 metres.

View looking northeast toward Clayton Valley Ridge with claystone outcrops visible in the foreground. Photo Credit: Cypress Development.

Willoughby noted that the key features of the deposit include its large size, surface exposure, and flat-lying nature. These features, he added, would allow for a mine with a negligible strip ratio of 0.15:1, due to very little overburden and the absence of interbedded waste, and negates the need for drilling or blasting during excavation work.

In addition to the favourable geological and topographical setting, metallurgical testing also indicated low-cost processing by leaching with dilute sulphuric acid that could lead to high lithium recovery of over 85%.

In May, a pre-feasibility study (PFS) estimated the project could produce approximately 27,400 tonnes of lithium carbonate equivalent (LCE) annually over a mine life of 40 years.

The study estimated an initial capital investment of US$493 million for a payback period of 4.4 years. The project has an after-tax net present value of US$1.05 billion at an 8% discount rate and an after-tax internal rate of return of 25.8%, based on an average LCE price of US$9,500 per tonne.

“The extremely positive results from the PFS demonstrated that Clayton Valley has become a world-class lithium deposit,” Willoughby noted. “And at US$3,329 per tonne of LCE, the low operating costs combined with significant mineral resources and long project life means it has the potential to be a significant source of lithium for some time.”

The project contains measured and indicated mineral resources of 593.3 million tonnes grading 1,073 parts per million (ppm) lithium for 636,400 tonnes of contained lithium and inferred resources of 2.3 million tonnes grading 1,005 ppm for 2,300 tonnes of lithium, at a cut-off grade of 900 ppm lithium.

Cypress is now focussed on developing a pilot plant program, which the PFS estimated at US$6.75 million and could take six months to complete.

“The primary focus of the pilot plant program is to show continuity in our process and to consistently produce a lithium product which will be of interest to battery manufacturers and sold directly to that market,” Willoughby said.

This article was first published by The Northern Miner. Read the original story here.