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Canada positioned to become a key producer of lithium
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Distribution of Canadian Lithium Resources 20220309

Canaccord highlighted a growing number of active development and exploration projects which could see Canada emerge as an important lithium producing nation in the medium-longer term.

Canada is positioned to capitalize on an abundance of lithium deposits and emerge as a key producer of the battery metal to global markets, according to Canaccord.

The provinces of Ontario and Quebec have become a hotbed of exploration by junior companies from all over the world from Canada’s Ultra Lithium to Australia’s Sayona Mining.

In a research note, analysts at the investment bank cited Canada’s “mining friendly, low carbon intensity operating environment” as an important element to its success in the race to supply the electric battery markets in North America, where lithium demand is expected to exceed supply by close to 40% in the US by 2030.

The note singled out a handful of Ontario- and Quebec-focused juniors in the lithium space.

Australia’s Sayona Mining could see near-term production of 160,000 tons per year from relatively low capex restart at NAL in Quebec with offtake partner Piedmont Lithium, Canaccord wrote.

Green Technology Metals, another Australian-listed company, is progressing the Seymour and Root projects in Ontario, with an aggressive drill program, according to Canaccord. The company will seek to fast-track Seymour development before developing Root and exploring options for downstream processing.

Patriot Battery Metals Inc, listed on the TSX Venture Exchange, has “Tier 1 resource potential” at the Corvette discovery in Quebec, within a large, untested land package. Canaccord wrote that Corvette could become “a global Top 10 deposit.”

Critical Elements Lithium Corp (TSX-V:CRE, OTCQX:CRECF) also got a mention for progressing the advanced Rose project in Quebec.

“We see potential for strategic partnerships and Stage 2 plans including downstream LiOH conversion,” Canaccord wrote.

Other early-stage lithium projects include the Barbara Lake lithium property near Thunder Bay, Ontario, which is being advanced by United Lithium, and the Georgia Lake and Forgan Lake pegmatites project in the same region, owned by Ultra Lithium.

Forgan Lake consists of about 256 hectares of land in 20 mining claims located in the Thunder Bay Mining District and is adjacent to the north of Ultra Lithium’s Lucky Lake claim block comprised of 15 mining claims. 

Historic work showed that lithium mineralization on the property is comprised of six spodumene-bearing lithium pegmatites that are mostly parallel to the metasediments, according to the company, with three 2019 grab samples that showed lithium values of 6.93% lithium oxide (Li2O), 6.90% Li2O and 4.88% Li2O.

Lithium demand to quickly outpace supply

Meanwhile, activity in the space is starting to ramp up in Canada, which is “located on the doorstep of the world’s second largest auto market,” analysts noted.

While there are several emerging projects in the US, those might not be enough to deliver supply independence, according to Canaccord.

To date, more than US$25 billion in investment in US battery manufacturing capacity has been announced, with Ontario and Quebec now also an emerging hub with over US$12 billion recently committed.

Canaccord is estimating that implied North American lithium carbonate equivalent demand could increase over 1,000% to nearly 650,000 tons in 2030, compared to 2022 global demand of 632,000.

Canaccord sees significant growth potential

Even if all potential domestic US production were to double, demand would still exceed supply by nearly 40% by 2030, according to the firm.

“EV (electric vehicle) sales in North America have lagged China (and Europe), but we believe recent electrification targets and financial commitments by auto OEMs and governments point to significant growth potential this decade,” Canaccord analysts wrote.

“We highlight a growing number of active development and exploration projects, which we believe could see Canada emerge as an important lithium producing nation in the medium-longer term.

“In our view, sustainability credentials (i.e. hydropower) and cost benefits (proximity to end users) of Canadian lithium supply is likely to be of strategic value to the EV/battery supply chain.”

Source: Proactive Investors

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