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Sienna Resources may be poised to unlock Clayton Valley Deep lithium project

Friday, January 6, 2017 7:30
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Nevada-focused Sienna Resources Inc (CVE:SIE) is among a number of lithium-focused mining juniors that received attention from investors through 2016.

Electric vehicles and advanced technologies are powered by lithium-based batteries and fuel cells, and that all spells good news for the companies like Sienna that are working to unlock new supplies of the silver-white metal.

Having acquired the Clayton Valley Deep brine project in early 2016 it is now working on plans to explore and possibly develop the asset, which close to some big discoveries.

Planning proceeding for Clayton Valley

In October the company told investors that it had received confirmation from the State of Nevada that all of Sienna’s company filings were in good order.

It means the company, subject to funding, can focus on initial exploration work that should help assess the scale of the opportunity on offer.

As previously announced, the company has engaged GeoXplor to oversee the initial work program on the lithium brine assets at Clayton Valley.

Nearology bodes well for the prime lithium asset

Sienna’s property is located in the deepest sections of the only basin that produces lithium from brine in Nevada.

Pure Energy Minerals, Sienna’s neighbor, has had success drilling on its deepest drill program to date in this basin.

This point bodes well for Sienna, so says company president Jason Gigliotti, who also said that Clayton Valley’s location is a distinct advantage.

As well as being located near to Pure Energy’s property, Clayton Valley also borders a project operated by Lithium X Energy Corp.

Contractor GeoXplor – which has been working on lithium brine since 2008 – has worked on Pure Energy’s project and delivered positive results.

At Pure Energy’s site some 816,000 tonnes of lithium carbonate equivalent was outlined.

GeoXplor has, according to Sienna, an “intimate knowledge” of the Clayton Valley.

It is anticipated that Sienna will be the first in the area to test a deeper source of lithium.

“We are very excited to start up our program as Sienna is located in the deepest sections of the basin that holds the only lithium development in Nevada,” Gigliotti said in July.

Investors and analysts are paying close attention to lithium

For the past two years demand has outstripped supply. And, while there will be rebalancing over the next 24 months, the deficit is expected to re-occur from 2019 on.

“Structurally, lithium has no supply capacity constraint,” said broker Macquarie.

“Four producers control 90% of global output and are producing well below capacity, we believe in an attempt to support prices.

“This has worked so far, but there is a swathe of new capacity planned from 2018, which is looking increasingly viable following the recent rally.

“We believe to protect market share and keep new entrants out existing producers will be forced to raise volumes. As a result, our expectation is that prices reach a turning point in late-2017, and then start heading lower.

“Investors should be aware that existing assets plus two Australian mines starting this year could theoretically meet all projected demand growth.”

Story by ProactiveInvestors


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