Liberty One Lithium picks opportune time to begin its lithium-brine odyssey

With Tesla’s (NASDAQ:TSLA) market capitalization surpassing first Ford’s (NYSE:F) and then General Motors’ (NYSE:GM) last month, talk of electric vehicles supplanting their conventional gasoline-powered peers has grown louder than ever.

There are plenty of forecasts suggesting exactly when the line will be crossed, but for most observers the only thing that matters is that the potential for it to happen appears real. Tesla may since have slipped back to second place in the market cap sweepstakes, but the point has been made: a manufacturer of electric vehicles can become the most valuable automaker in the United States.

The single most costly component in any Tesla model is its battery. Looking at the market for commodities used to make this vital power source (not to mention the batteries used in mobile phones, laptops and a growing list of other mobile devices), the takeaway from some industry forecasts is that while demand is surely going to be there, supply has the potential to fall behind.

Demand for lithium looks set to out-strip supply for some time, underpinning lithium prices

“Even if you see some of the large suppliers ramp up, it is still not going to be enough to meet demand,” says Brad Hoeppner, President and CEO of Liberty One Lithium Corp (CVE:LBY; OTCBB:LRTTF), in discussing the outlook for the namesake metal in lithium-ion batteries. “We expect to see pricing strong into at least 2025. It is going to be a great growth sector.”

Hoeppner’s young company is at an early stage in the lithium exploration process, but it already has a lot going for it, reflecting an approach to value growth that is at once prudent and aggressive.

The company’s most recent news was the closing of a C$4.2 million financing, which leaves it nicely funded to carry forward projects in its portfolio, all of which will focus on brine-based lithium.

“The path to production with brine can be a lot faster than hard rock,” explains Hoeppner, noting that it is often the cost side of the equation that undermines mining project economics.

Lithium brines account for over half of the world’s lithium resource and that should not be surprising, as an average brine deposit is far larger than an average hard rock deposit, and arguably they are easier to find. Arid basins are the places to look, so prospectors know that Argentina, Chile and Nevada are among the hot spots.

The Paradox Basin in Utah is where Liberty One is exploring

Utah is another location to include on the list, its lithium brines often situated in oilfields, such as in the Paradox Basin. And this is the home of Liberty One Lithium’s first project: Paradox North.

Liberty One Lithium’s property is within a few hundred feet of two historic wells with the highest lithium values in brines known to occur in the Paradox Basin: Southern Natural Gas #1 Long Canyon (500 ppm Li) and White Cloud #2 (1,700 ppm Li).

Of potential importance is that Paradox North sits downhill from both wells. “The way you see brines collect is on the anticline and the syncline. It starts to go down the path as the water flows, so sometimes in the dip you get the higher numbers,” Hoeppner explains.

What Liberty One Lithium is expecting to encounter when it begins drilling later this year are zones of supersaturated brine, which means the brine contains substantial quantities of many elements. One reason for this is that brine-rich zones in the Paradox Basin often overlie other zones rich in elements such as potash or magnesium.

Beyond Utah, Hoeppner and his team are looking at projects both in the US and other jurisdictions. “We have people bringing us potential projects quite frequently, but we’re picky – everything has to line up. I can’t really reveal where we are in terms of evaluating different opportunities, just that we are active and intend to build a strong portfolio of projects that features geographic diversity.”

Board strengthened with Copenhagen-based FLSmidth veteran

The company did reveal recently an addition to its board of directors that brings an important strategic relationship: April 5 saw John Davidson named as an independent director. Davidson leads business development in Western Canada for Copenhagen-based FLSmidth, which supplies processing plants and equipment to mining and other industries.

“They are one of the world’s largest mineral processing companies and hold numerous patents for processes they have created themselves,” Hoeppner explains. “When you get into brines, and particularly in Utah, you are not using evaporation ponds for production – you are going to need a process. We might come up with our own, and we are also looking at other groups who are working on things that we might license.”

But first things first. Results of the airborne survey, which will compare the magnetic lay of the land in Liberty One Lithium’s 1,805 hectare project to that in adjacent areas with lithium-bearing brine showings from oil and potash projects, should be a major point of interest for those following the company. Announcement of permits and a drilling date would be the next major step at Paradox North.

“Utah is a great jumping-off point for Liberty One,” says Hoeppner. “It is a renowned mining jurisdiction and we are very excited about Paradox North. We are looking at additional projects all the time and when something good reaches our table we have a strong financial position and won’t hesitate to move quickly.”

Story by ProactiveInvestors