It seems it’s only a matter of time before we’re all driving electric vehicles. BMW (ETR: BMW), for example, intends for half of its total sales to be EVs as soon as 2030.

But before this can happen, there’s a major problem.

In short, EVs need lithium to power their batteries, but because of the pandemic, lithium supply chains are a real liability.

This is especially the case in Europe, where there are currently no operating lithium mines. In fact, the European Union recently added lithium to its critical materials list, stating its intent to reduce its dependence on imports for this crucial metal in battery manufacture.

Though this all provides a challenge for the EV industry generally, it’s actually great news for a company called Zinnwald Lithium (LON: ZNWD | FRA: 7WW) and its CEO, Anton du Plessis.

You see, du Plessis is aiming for Zinnwald to become one of the first companies to develop an operating lithium mine in Europe.

The company is advancing the project, which is located in Dresden close to the heart of German electric vehicle manufacturing. And given the focus on securing more reliable supply chains—especially in Europe—the timing could hardly be better.

To find out more, Mining Maven spoke to du Plessis about Zinnwald’s potentially game-changing project and how it could provide a reliable lithium supply for the continent.

A much-needed alternative to fragile supply chains

As pandemic control measures closed factories and shut down borders—especially links with China—the importance of local supply was emphasised.

While some had been voicing concerns about the stability of these globe-spanning supply chains for years, that voice grew into a shout as many in Europe began to look around and see the scale of the problem.

du Plessis explains:

“I think what the pandemic kind of showed up was that these long global supply chains do represent risks, in that they can be disrupted relatively easily.”

He goes on:

“As things stand, there are no operating lithium mines in Europe. The EU wants to change that. They recognize that in an increasingly polarized world, it’s sensible not to be reliant on supply from very distant places.”

Of course, it makes sense that Europe would want its own lithium supply, especially with the general push on the continent towards electrification.

“Most countries,” du Plessis points out, "are committed to ending the sale of internal combustion engine cars from 2035”.

He also explains that the EU has decided to commit €3.5 billion “to expand the battery industry in Europe”, with a portion “earmarked for the stimulation of raw material supply from within Europe”.

And the fact is, when it comes to expanding the battery industry, according to du Plessis, to power EVs, lithium-ion batteries are the “most viable in the near and medium term.”

Cutting carbon emissions

By developing a lithium mine in Europe, Zinnwald will also enjoy the benefits of helping to cut carbon emissions. Don’t forget: the EU has set a target of becoming carbon neutral by 2050.

But right now, Australia leads the world in lithium mining, where it’s made into a concentrate that’s then shipped to China. Once there, du Plessis explains:

“…it’s converted to a battery grade product in what is typically quite a carbon intensive process, just because of the nature of energy sources in China, which are often heavily coal based.”

Only after that can the battery grade product be shipped to Europe.

So, the current process not only depends on this long, fragile supply chain but also generates a great deal of carbon in converting and shipping the lithium itself.

“There’s a lot of transport miles in that whole setup. And if you could avoid that, obviously it’s better, especially given where international freight rates and international carbon prices are going,” says du Plessis.

By developing its mine in Europe, then, Zinnwald Lithium offers the EU a way out of this carbon-intensive and inefficient system.

An unbeatable location for EV production

Not only is Zinnwald Lithium’s project in Europe, but as mentioned earlier, it’s specifically located in a German industrial powerhouse.

The Zinnwald project—from which the company gets its name—is just 35 kilometres from Dresden on the border with the Czech Republic.

Surrounded by a growing EV manufacturing hub, the project is in the perfect place to capitalise on the EV boom. Says du Plessis:

“If you go and have a look at some of the announcements by Volkswagen in particular, they’re talking about 80% of their light passenger vehicle manufacturing being electric vehicles by 2030. To that end, they’ve already converted a number of their factories to making EVs.

“And if you look at where those factories are, they surround our project: there’s one in Leipzig, there’s one in Zwickau, and there’s one in Czech Republic. If you drew a circle of 50 kilometres around our project, those plants are all are all there.”

It’s a super smart location, especially as it’s also in the heart of Europe’s chemical industry too, making it easier to verify that the lithium end product is manufactured to a high standard and in an ethical manner.

Indeed, it’s crucial in battery making to have a product at greater than 99.7% purity, with extremely low levels of deleterious elements. After all, as du Plessis points out:

“If you’re a car maker making batteries, and the batteries are the most expensive part of your car, and you have to write an eight-year warranty on that battery, the last thing you want is for it to burst into flames. You really want to be able to be sure that the products you’re putting into that battery meet your spec and are consistent.”

It’s why, he goes on to point out, it would be much more straightforward for EV makers to:

“...be able to go down the road, where there is a local team, and make sure that it’s all meeting your specs”.

Without doubt, the location is ideal and puts Zinnwald Lithium in an extremely strong position.

A whole range of potential resources

With the strong tailwind of a growing EV industry and the restrictive supply of lithium in Europe, Zinnwald Lithium’s future looks strong.

And investors will be pleased to see that a definitive feasibility study (“DFS”) was already completed in May 2019 on the Zinnwald project, which suggested a €428 million net present value before tax with a total JORC resource of 757,144 tons of lithium-carbonate equivalent (“LCE”).

That’s huge. But even then, additional licences have since increased the overall resource to more than 1 million tons of LCE.  

Plus, the DFS’s mine life of 30 years equates to less than 50% of the current identified mineral resources. Indeed, du Plessis believes the company’s “large resource and long life” will be key to the project’s success.

Furthermore, the company has moved on from exclusively focusing on lithium fluoride to “include a broader range of products and a few more mainstream products”. Primarily, this includes lithium hydroxide as that is the current focus of the European market. As du Plessis himself points out:

“One of the benefits of this project is it can produce a range of products. It’s quite a flexible project in that sense as it can produce lithium hydroxide, lithium carbonate, or lithium fluoride. But we will focus the study now on lithium hydroxide.”

There’s no wonder then that the company plans to advance towards production as quickly as possible. Given the sheer number of factors in its favour, it makes sense to get this project active as soon as possible.

“Lithium pricing has more than doubled since the beginning of this year,” explains du Plessis, and a ramp-up in lithium-ion battery production over time is likely to keep those prices high.

With shares up almost 70% year-to-date, investors are clearly starting to realise Zinnwald Lithium is perfectly positioned to capitalise on the increasing demand for lithium that the EV industry is driving at pace.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

 

Power Metal Resources (LSE:POW) shot up by 12% on Wednesday after revealing its entry into the booming uranium market.

The £26.5 million explorer—which is exposed to many different metal projects worldwide—has claimed 100% ownership of four properties prospective for the hugely in-demand metal.

The land, which comprises seven licenses, surrounds an area in the Canadian province of Saskatchewan called the Athabasca Basin that hosts some of the world’s most well-known uranium projects.

Among these are Cigar Lake, the world’s highest-grade uranium mine, and McArthur River/Key Lake, the world’s largest high-grade uranium operation. Both are owned by Cameco Corporation.

Uranium—which is predominantly used as fuel in nuclear reactors—has enjoyed a tear recently, rising by more than 40% since August to its highest price since 2014.

Aside from increasing demand for nuclear power, this has been driven by the launch of a new trust by Canadian asset manager Sprott, which has bought up around 14% of total global reactor consumption.

With supply shrinking, and the movement away from fossil fuels continuing, many are now betting that a lack of new uranium mines will see prices continue to rise well into the future.

As Power Metal put it in its release: “There has for some time been a building supply/demand dynamic in the uranium commodity market, meaning a diversified natural resource business such as Power Metal, should consider participation.

The firm’s properties, named Clearwater, Tait Hill, Thibaut Lake, and Soaring Bay, cover a combined 109km2, were staked after detailed analysis of several geological databases. These covered everything from airborne magnetics and government bedrock mapping to public assessment report files and the mineral deposits index.

The claims have now been registered with the relevant authorities at a cost of just C$6,521, and are valid for two years with no minimum spending commitment. As the properties were acquired through staking, Power Metal will have a 100% interest with no outstanding royalties.

Beyond the soaring price of uranium—often known as yellow cake—the firm said its latest move was also intended to bolster its exposure to strategic energy metals. Indeed, the new claims now sit alongside the company’s Authier North project in Quebec, which is based immediately north of Sayona Mining’s Authier Lithium project.

Building on this, chief executive Paul Johnson said: “Power Metal has been reviewing uranium opportunities across three different continents for some time, and today we make our first important public step into the uranium commodity space.

The Properties have been selected after careful review and are strategically located where there is material evidence of uranium prospectivity as demonstrated by historic exploration reports as well as through various uranium focused government databases.

The acquisition of these uranium properties through staking represents an important building block in Power Canada's growing strategic energy metal business.”

Wednesday’s uranium update comes just a day after Power Metal revealed that it had identified a large-scale gold-in-soil anomaly at another of its projects—Tati in Botswana.

The anomaly was confirmed by laboratory assay testing results of samples collecting from exploration, with grades hitting up to 26.5 grams per tonne.

Exploration will now continue at pace with the focus of identifying targets for drilling, which is expected to begin by the end of the month.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Greatland Gold (AIM:GGP| FRA: G8G) has been one of the exploration space’s stand-out performers in recent years.

The company has already enjoyed enormous discovery success at Havieron, located in Australia’s Paterson region, and is now developing the project alongside mining giant Newcrest Mining (ASX: NCM).

The progress here alone helped to drive an incredible 1,800% share price rise for Greatland in 2020.

Top of the list is Juri, a joint venture the Greatland is once again pursuing alongside Newcrest.

And already, it’s looking like it could be another breakthrough success for the firm—with maiden drilling recently hitting a promising intersection and first gold at a prominent prospect.

Confidence builds as first gold found at Goliath Prospect

We now have the first set of preliminary drill results from the initial Juri joint venture (“JV”) drill programme. And—as mentioned—things are already looking very promising.

Located to the north west of principal asset Havieron, Juri presents an opportunity, as Day says, to “broaden the joint venture with Newcrest”.

After all, many of the targets already identified at Juri share similar geophysical characteristics with the Havieron gold-copper deposit.

A November 2020 agreement between the two firms gave Newcrest, one of the largest gold mining companies on Earth, an immediate 25% interest. Newcrest also has the right to earn a maximum 75% interest by spending up to A$20 million in a two-stage farm-in over five years. This includes a minimum commitment by Newcrest to spend at least A$3 million in the first stage.

Not only does the deal strengthen the pair’s relationship, as Day notes, but it also grants Greatland access to Newcrest’s exploration team and “discussions of findings”. This is particularly valuable considering Newcrest has “been in the Paterson region for 35 years”.

Thanks to the support of Newcrest’s funding, the maiden drill programme was able to take place over both of the tenements that form the Juri JV—Paterson Range East and Black Hills.

At Paterson Range East, five holes were drilled across the Goliath, Los Diablos, and Outamind targets while, at Black Hills, the drill bit turned at four holes in total targets named Parlay and Saddle Reefs.

Results so far are from the first four assayed holes, out of the nine total holes drilled, and already, Juri is starting to bear fruit.

Notably, at Black Hills, an assay at the Saddle Reefs target found an intersection of 3.5m at 1.88 grams per tonne (“g/t”) of gold from 226.5m.

Not only that, but the programme also identified first gold at Paterson Range East’s Goliath Prospect. That includes a significant assay of 1.0m at 1.49g/t gold from 651m. 

At the time of the announcement, Day noted that “intercepting gold mineralisation” from the very first assays is truly an “excellent result”, helping to “build confidence regarding the prospectively of the assets”.

Ambitious plans at Juri and the benefits of Western Australia

Of course, Greatland is still waiting for results from other holes. That includes at Saddle Reef, as well as the Los Diablos and Parlay targets. The company also awaits results from sections of the Outamind hole.

These are all expected in October.

Day says the next step at Juri after this will be another round of electro-magnetic (“EM”) surveying, set to start later this month. Specifically, this will be “a land-based EM campaign as opposed to an aerial EM one”, with this approach offering “richer data” on Juri in general.

All of this will then provide a “more informed view on where to find economic mineralisation”, says the CEO, helping Greatland and Newcrest to “better refine” where to drill next.

Of course, it also helps that the JV is already looking in an area as friendly and rich for exploration as Western Australia. As Day says, the state is among the “preeminent mining jurisdictions on the planet”.

Beyond this, covid cases in Western Australia remain low. As Day highlights, this allows Greatland to drive forward with exploration at Juri and other projects in the region, too.

“Our experience of Covid has been extraordinarily different, in terms of community transmission, to most of the rest of the world. And that's allowed us to continue business as usual.”

“Lurking in the deep” – The deposits transforming Greatland

The Paterson region is among Australia’s most prospective frontiers when it comes to discovering multicycle, tier-one gold/copper deposits.

A discovery of particular note is the Telfer gold-copper mine, located just 45km away from Havieron and Juri. As Day points out, Telfer was “a top five Australian gold mine for some 35 years” and remains in production to this day.

There’s the Winu project to the north of Juri, too, where Rio Tinto (LSE:RIO)  revealed an impressive inferred mineral resource of 503Mt at 0.45 copper equivalent last year alongside a new zone of gold dominant mineralisation.

Despite these high-profile discoveries, there has been little in the way of investment over the past 20 years.

This, alongside the favourable geology at Paterson – where formations typically do not express at surface – combine to add to the potential for a significant discovery at a project like Juri.

As Day says, easy-to-find formations would have been found “50, if not 150 years ago” were it not for the limitations of technology at the time. Now, thanks to modern techniques, it’s possible to find these “monsters lurking in the deep”.

“I'm not sure the market fully appreciates the real scale of this opportunity,” he summarises.

Still, in partnering with world-renowned Newcrest and seeking out opportunities in this rich yet under-explored space, Greatland is very much making a name for itself.

In fact, the company’s shares saw an extremely steep share price rise in 2020, rising 1,800% in a single year amid a seemingly ever-stronger gold price.

However, as the gold price has slowly started to normalise in 2021, shares have fallen almost 50% year-to-date.

This likely temporary slump, given the continued success of the company’s projects, presents a window of opportunity.

After the stratospheric price rise in 2020, there is now a chance to get on board at an affordable point. And with the price already starting to creep up – a 7% rise since the start of August – it’s a chance that investors might not have for long.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

When thinking of Power Metal Resources (LON: POW) and its Tati project, the expression ‘strike while the iron is hot’ springs to mind.

This is a company that, just a week after announcing it had exercised its option to acquire 100% of the gold-nickel project, revealed it had already completed a phase I programme.

The same programme that, two weeks later, has now confirmed large-scale gold and nickel in soil anomalies.

Quick, decisive action is part of the company’s philosophy according to exploration manager Oliver Friesen, who took the time to speak with Mining Maven about this highly exciting opportunity and the phase I programme itself.

Taking action – Power Metal pursues drill-ready stage at Tati

Towards the end of July, Power Metal announced it had exercised its option to acquire a 100% interest in two exploration licences – both located in Botswana’s prolific Tati Greenstone Belt (“TGB”).

Just one week later, the company had completed its phase one work programme at the project – including mapping, prospecting, and robust geochemical sampling.

And the results from the first batch of analysed samples are now in, with exciting gold and nickel exploration targets now emerging.

Asked why the company had moved so quickly, Friesen highlights the firm’s mandate to “bring on projects that we like and explore them quickly”.

He explains that Power is also reluctant to “sit on projects” and prefers to strive forward, getting results and deciding the course of action “in relatively short order”.

As Friesen puts it:

“We bring projects on and try to explore them right away. We aim to advance them to a drill-ready stage, we drill, and then we make a decision on what to do next.”

Exploration targets emerge at Tati

In the Power Metal’s latest release, chief executive Paul Johnson said:

“It is now confirmed that we have substantial nickel and gold exploration targets emerging and we are following the pathway needed to make major discoveries.”

In total, the company collected 1,107 soil samples and 49 rock samples – exceeding the originally planned 1,000 soil samples – from five grid areas at Tati.

Results are in for 727 of these samples, from grid areas 2 to 5, analysed using portable field X-Ray Fluorescence (“XRF”) equipment. XRF equipment can analyse samples and determine the concentration of certain elements like nickel and arsenic.

At grid 2, geochemical results highlight a high-tenor nickel-in-soil anomaly, which is approximately 1,000m by 200m – which coincides with the mafic intrusive body already mapped by the government.

Mafic rocks are a type of igneous rock, formed as magma cools and solidifies, containing high levels of magnesium and ferric oxides that give it a recognisable dark colour. They are the type of rocks that host large world-class nickel-copper deposits worldwide.

In total, 23 of the 80 total samples taken at grid 2 returned more than 500 parts per million (“ppm”) nickel, while 50 impressively returned more than 100ppm.

Notably, the nickel anomaly now defined at grid 2 lies only 15km southeast of the Tekwane nickel mine, with Tekwane hosted in mafic intrusive units of the same age as those mapped on grid 2.

At grid 3, meanwhile, 79 of the 354 samples returned over 100ppm arsenic and up to 1,098ppm. Geochemical results from grid 3 highlight a 3,000m long high-tenor arsenic-in-soil anomaly with a width ranging between 500m and 200m. The anomaly trends northwest-southeast, and remains open at both ends.

Meanwhile, according to geochemical results so far, the grid 4 north-south trending arsenic-in-soil anomaly measures around 1,000m by 400m.

This grid 4 anomaly, importantly lies along the geological contact zone between two areas: the Last Hope Formation and the Eastern Succession Volcanics. This position is analogous, geologically speaking, to the Signal Hill gold mine located a mere 2.5km southeast along the same geological structure.

Thanks to the analogous geological position and proximity to Signal Hill, as well as arsenic’s strong pathfinder status when it comes to gold in the TGB, grid 4 is a priority exploration target for Power Metal moving forward.

Grid 5, too, is a priority exploration target – being less than 5km from the Tekwane, Selkirk, and Phoenix nickel mines. Geochemical results from this grid area highlight a northeast-southwest trending nickel-in-soil anomaly measuring roughly1,500km by 300m.

Results from grid 5 give further credence to the idea, suggested by prior operators in the TGB, that the mafic intrusive units hosting the nearby nickel mines extend further southeast than previously mapped.

Activity returns after nineteenth-century gold rush

Of course, Power Metal also has strong reasons to follow through when it comes to their Tati projects in particular.

Indeed, the TGB lies not far from Francistown, an area close to the Zimbabwe border and the site of the first Southern African gold rush dating all the way back in the nineteenth century. Since then, there has been little extensive modern exploration.

Encouraged by the historical data, Friesen says, the company looked to “get some boots on the ground” to confirm and expand on preliminary observations.

As he explains, historic work has made it clear there are “some really interesting anomalies that need to be followed up on”.

Mapping has found several old mine workings. These included historical trenches, mine shafts, and adits (entrances to underground mines) on both of the licences.

Power is now considering a phase 2 programme, with ground-based geophysics, before the planned Rotary Air Blast drilling programme planned for later this summer.

The company already has put down a deposit for future drilling at Tati, with Friesen expecting such work to start before September end.

Vital Commodities, the firm Power Metal optioned the Tati properties from, has a drilling division. And the services they offer formed part of their agreement.

This presents a definite advantage when advancing the project, with the company able to move straight to drilling when it wishes and take a full-throttle approach to exploration.

A powerful legacy and a friendly jurisdiction

Aside from Power Metal’s own mandate, there are plenty of other reasons to pursue this project wholeheartedly.

For example, Friesen points out that exploration companies are always looking for projects with successful nearby operations – whether current or historic. This is because they lend confidence to the idea that a particular belt of rocks is capable of hosting economic deposits.

With this in mind, he highlights that the TGB is a “well-known mining district” brimming with orogenic style gold deposits – orogenic deposits being the primary source of gold.

In fact, the TGB was reportedly home to more than 70 small-scale gold mining operations during the former gold rush there.

Greenstone belts make up “some of the most prolific gold deposits that you can find anywhere in the world”, Friesen notes. Greenstone belts in Canada, for example, contain “many 5-million-plus-ounce deposits”.

Not only that, but Tati also contains a number of sulphide deposits rich in nickel, copper, and platinum group elements (“PGEs”).  PGEs are a collection of highly valuable metals that share similar properties and are usually found together in what are called magmatic sulphide deposits.

Just as important, Friesen says, is that in Botswana “the jurisdiction and the government are supportive of putting mines into production”.

With all of these elements in place, the company has every reason to keep moving forward.

Of course, getting the right people on board is another essential factor.

Friesen, who officially joined Power Metal three months ago, has been heavily involved with Tati and bringing in local expert Charles Byron. Friesen describes Byron as “the world’s preeminent expert in the Tati Greenstone Belt”.

Byron has worked with other companies who have shown an interest in the TGB, including Canadian mining company B2Gold (TSE: BTO). His input on the technical and operations side at Tati has proved invaluable, and gives “that much more of a chance to make a potential discovery”.