- Electric vehicle production is driving demand for lithium
- RGDCF controls five lithium properties
- Smart phones and other mobile devices also require lithium
With concern about dwindling supplies of lithium carbonate growing, prices for the compound used in the cathodes of batteries have more than doubled since 2015. Prices are expected to hit US$12,000 per tonne, according to the Driving Disruption report issued by investment bank UBS, and while there are adequate reserves of the metal, bringing it to market quickly enough may pose a challenge. This prognosis has manufacturers of electric vehicles scrambling to secure supplies. It is very likely some will go knocking on the doors of junior exploration companies like 92 Resources Corp. (TSX.V: NTY) (OTCQB: RGDCF) (FSE: R9G2). Among its three principal assets, 92 Resources has five that revolve around lithium. As a result, the company is poised to deliver supplies of lithium to EV manufacturers seeking to secure their supply chains.
Earlier this year, Volkswagen said that securing supplies of cobalt and lithium were two of its ‘greatest concerns’. And ‘BYD, the Chinese electric car and bus company part-owned by Warren Buffett, said it was talking to lithium producers in Chile about potential deals to secure lithium supply’. The race has been driven by rising estimates of EV production. In May 2017, UBS became the latest major analyst to up its forecast for EV penetration. The bank now estimates EVs will hit 14 percent penetration globally by 2025. This will require the lithium market to ‘to grow from its annual production of 182,000 tonnes to an average of 3.1m tonnes for 20 years to electrify the world’s fleet of vehicles’, according to the FT report.
RGDCF’s two major lithium assets are at Hidden Lake, approximately 40 km northeast of the city of Yellowknife, the capital of Canada’s Northwest Territories, and at their Corvette property, located 12 km south of the Trans-Taiga all-weather gravel road in the province of Quebec. The Hidden Lake Lithium Property consists of two mineral claims, totaling approximately 1,100 hectares. It is highly prospective for spodumene-bearing lithium pegmatites, with samples indicating between 1.37% and 3.01% Lithium superoxide (LiO2). The very high grades of lithium have been attributed to concentrations of coarse-grained spodumene and crystals of up to 36 inches long, with visual estimates across the dyke(s) ranging from 20% to 35%. The Corvette property consists of 76 claims totaling 3,891 hectares, and recently returned samples of 3.48% and 7.32% LiO2 from spodumene bearing pegmatite exposed at surface.
RGDCF recently acquired three new properties, including Corvette, and also located at Eastmain and Lac du Beryl, together consisting of 115 mineral claims on 14,710 acres, all rich in pegmatite. Pegmatite is a type of crystal-heavy igneous rock, and is a good source of ‘hard rock’ lithium, which represents about one-third of all global reserves.
With the lineup of EV manufacturers now a veritable alphabetic list of automakers, the fretting about demand has subsided. For the near future, the concern is supply: getting the metal out of the ground fast enough to satisfy demand from EV and mobile device makers. It won’t be surprising to see RGDCF’s valuation climb as lithium suitors court this modern energy solutions company.
For more information, please visit www.92Resources.com.
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