Caeneus Minerals eyes large lithium clay deposit in Nevada

Caeneus Minerals (ASX:CAD) has sampled grades of up to 5.6% lithium carbonate equivalent at its Muddy Mountain Lithium Clay Project in Nevada, U.S.

Assays confirm extensive lithium mineralisation across exposed sections sampled along the 7 kilometre extent of the project.

The elevated lithium results across the project area exhibit the potential for a large, near surface deposit.

Potential exists for an increase in grade as mineralisation dips below weathered surfaces.

A large area remains unsampled and highly mineralised areas remain open leaving potential for further extensions to current findings.

A follow-up review of the area is being planned to determine the potential for a higher-grade zone.

Sampling results

A total of 118 samples were collected grading up to 1060 ppm lithium or 5,639 ppm lithium carbonate equivalent (LCE).

27 samples assayed greater than 700 ppm lithium, with 5 samples greater than 1,000 ppm lithium.

Sampled interval lengths averaged 1.8 metres, representing realistic grade intervals designed to avoid misleading higher grade spot sample results.

Representative sections display semi-continuous to continuous interval composite grades greater than 800 ppm lithium or 4,256 ppm LCE across widths reaching 13 metres for individual claystone, siltstone and other carbonaceous sediment beds.

The most prominent section averaged 830 ppm lithium or 4,415 ppm LCE across 12.4 metres true thickness.

Company history: Nickel with a renewed lithium focus

Caeneus initiated primarily as a nickel explorer in Western Australia but the company has more recently had a change in direction to exploration towards lithium.

The company believes that lithium is a commodity of the future with favourable supply-demand dynamics that will positively affect future prices.

The commodity first became relevant in 1991 when Sony commercialised the lithium-ion battery, used in many electronic devices such as smart phones and laptops.

A new wave is now set to hit the commodity as car manufacturers attempt to mass produce electric vehicles using a bigger, better version of the lithium-ion battery.

Furthermore, the future of lithium does not stop at electric vehicles and flows through to the renewable energy market.

The sun is not always shining, the wind is not always blowing, hence energy storage technology is integral to the emergence of renewable energy.

The price of lithium has been over US$20,000 per tonne for battery grade material in the Chinese spot market.

Price rises throughout 2015 and 2016 were due to demand for the commodity being higher than supply.

Lithium and nickel projects

Caeneus has a portfolio of lithium and nickel projects across the U.S. state of Nevada and Western Australia:

– Muddy Mountain (lithium, Nevada);
– Lida Valley (lithium, Nevada);
– Scotty’s South (lithium, Nevada);
– Columbus Marsh (lithium, Nevada);
– New King (lithium, Nevada);
– Mt Dockrell (lithium, Western Australia);
– Pardoo (nickel, Western Australia); and
– Supernova (nickel, Western Australia).

These projects cover the full gamut of possible lithium mineralisations including pegmatite (Mt Dockrel), lithium brine (Lida Valley, Scotty’s South, Columbus), and lithium clay (Muddy Mountain, New King).

The New King lithium clay project was acquired recently in October and options over the Scotty’s South and Columbus projects were acquired in July 2016.

Muddy Mountain

The Muddy Mountain project is situated 50 kilometres northeast of Las Vegas and covers 2,542 acres.

This project contains a strike length of circa 7 kilometres of the Tertiary Horse Spring Formation which is known to contain anomalous lithium in clays grading up to 5,000 ppm lithium.

Caeneus’ goal is to target a district scale multi-million tonne resource grading in the range of 0.3% to 0.5% lithium.

Significant past producers of borate are situated immediately adjacent to the Muddy Mountain claims.

The benefits of Nevada

Caeneus believes that lithium brines, as opposed to hard rock, is the future for the metal as it costs circa half to produce than from hard rock pegmatites.

Because of its geology and hydrology Australia has little potential for lithium brines, whereas Nevada is already home to the Tesla Gigafactory and one of the world’s largest lithium producers – Albermarle Corporation LLC (NYSE:ALB).

Nevada has many rocks with high lithium contents including the Horse Spring Formation, McDermitt Caldera and a variety of igneous rocks.

The state has good, established infrastructure with power and transport passing close to each of the company’s projects.

Nevada has very low sovereign risk which positions it favourably compared to other major lithium producing jurisdictions such as Bolivia, Chile, Argentina and China.

Analysis

Results from the 2016 field program are encouraging and prove the potential of the Horse Spring Formation within the Muddy Mountain project to host a possibly lithium deposit.

The project has potential to produce a large tonnage lithium deposit similar to the nearby Kings Valley Project of Lithium Americas Corp (TSE:LAC) and Mexico’s Sonora Lithium Project of Bacanora Minerals Ltd (CVE:BCN).

Additionally, the Muddy Mountain project may also contain considerable mineable borate.

Collectively the board of directors has in excess of 70 years experience in the resources sector and Steven Elliot, managing director, has been accredited with and been involved in many mineral discoveries including platinum, gold, copper, vermiculite and china clay.

With six lithium projects and two nickel projects, Caeneus has the potential to be exposed to exploration news flow on multiple fronts.

During the September quarter the company successfully raised $1.2 million through a share placement.

Story by ProactiveInvestors