Liberty One Lithium Corp

(LBY:CA)

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Liberty One Lithium Corp. is an emerging exploration company focused on the acquisition and development of high grade lithium brine deposits around the world.

  • Initial prospect located in Utah’s Paradox Basin
  • Located in a historic source of high grade lithium-bearing oilfield brines.
  • Historic resource indicates potential to produce large volumes of brine on-site.
  • Decrease in lithium grades and resources, plus tightening water restrictions at Nevada’s Clayton Valley is prompting juniors to look elsewhere in North America for lithium brine reserves.
  • Brine in Utah appears to meet commercial concentrations.
  • Exploration & production-friendly jurisdiction (permits potash and extensive uranium mining)
  • Previous oil & gas exploration offers historic data and attractive re-entry economics utilizing existing exploration wells.
  • No complex water issues. Numerous exploratory wells in-situ offer excellent re-entry options.
  • Exceptional climate for evaporation purposes, existing infrastructure and year-round access to road and rail.
  • 750 miles west of Tesla’s ‘gigafactory’ battery production facility.
  • Experienced management, solid business and financial leadership.

Liberty One believes that access to strategic lithium resources are the key to a robust national energy strategy to protect domestic economic stability.

Why Lithium?

The Company believes that global resources are the key to a robust energy strategy to protect economic stability worldwide.Lithium accounts for only about 5% of the materials in some car batteries, and for less than 10% of their cost. But the element is a vital component of batteries that power everything from cars to smartphones, laptops and power tools. With demand for such high-density energy storage set to surge as vehicles become greener and electricity becomes cleaner, Goldman Sachs recently called lithium “the new gasoline”.

That has made it the world’s hottest commodity. The price of battery grade 99%-pure lithium carbonate imported to China escalated from around US$7,000/tonne in mid-2015 to over well over US$20,000/tonne as recently as June, 2016.

The rise mostly reflected concerns about the future liquidity of China’s spot market. China gets much lithium from spodumene rock in Australia, an alternative to South American brine. Albermarle, an American miner, and Tianqi, its Chinese joint-venture partner, plan to use spodumene from a big Australian mine to process more battery-grade lithium carbonate and hydroxide. That will mean less ore available on the spot market in China.

The current industry is concentrated, which adds concerns. Last year Albermarle, the world’s biggest lithium producer, bought Rockwood, owner of Chile’s second-biggest lithium deposit. It and three other companies—SQM, FMC of America and Tianqi—account for most of the world supply of lithium salts, according to Citigroup. What is more, a big lithium-brine project in Argentina, run by a joint venture of Orocobre, an Australian miner, and Toyota, Japan’s largest carmaker, is behind schedule. Though the Earth contains plenty of lithium, extracting it can be costly and time-consuming, so higher prices may not automatically stimulate a surge in supply.

Demand is also on the upturn. At the moment, the main lithium-ion battery-makers are Samsung and LG of South Korea, Panasonic and Sony of Japan, and ATL of Hong Kong. But China also has many battery-makers. Its government is stepping up the promotion of lithium-ion batteries and electric vehicles, with the biggest emphasis on buses. Sales of “new energy” vehicles in China almost tripled in the first ten months of 2015 compared with the same period in 2014, to 171,000.

Additionally, Tesla Motors, is building its “Gigafactory” in Nevada, which it has stated it hopes to supply lithium-ion batteries for 500,000 cars a year within five years. J.B. Straubel, Tesla’s chief technical officer, says the firm wants to secure supplies of many battery materials, not just lithium. “There’s so much hype in the lithium market right now…people look at it as this magical element,” he says. Nonetheless, in August Bacanora, a Canadian firm, said it had signed a conditional agreement to supply Tesla with lithium hydroxide from a mine that it plans to develop in northern Mexico. Bacanora’s shares jumped on the news—though analysts noted that shipping fine white powder across the United States border would need careful handling.

Bigger carmakers also have a growing appetite for lithium. In a recent shift, Toyota has begun offering lithium-ion batteries instead of heavier nickel-metal hydride ones in its Prius hybrid. Tougher emissions standards in Europe and America are likely to boost carmakers’ need for lithium.

Another big source of demand may be for electricity storage. The holy grail of renewable electricity is batteries cheap and capacious enough to overcome the intermittency of solar and wind power—for example, to store enough power from solar panels to keep the lights on all night. Tesla recently announced it will start installing “Powerwall” battery packs in American and Australian homes to store solar energy, at a cost of $3,000. Enel, an Italian utility, is launching similar storage products this year in South Africa, where homes and businesses suffer frequent black-outs.

Power utilities will increasingly use giant battery packs, charging them at times of low demand and tapping them to provide short bursts of electricity at peak times, an alternative to building a fossil-fuel plant that will sit idle the rest of the time. AES Energy Storage, a big provider of energy storage, won a contract in 2014 to provide a “peaker plant” in Southern California that will provide up to 100 megawatts (MW) of power into the grid at moments of maximum demand. In December, the firm agreed to buy, over several years, enough lithium-ion batteries from LG to provide ten times this level of peak power—that is, 1 gigawatt, or more than the output of an entire, typical-size coal-fired power station. “We’re hybridising the power grid,” says John Zahurancik, its boss.

In summary, a number of market forces are at work that all link to lithium as an in-demand metal for the foreseeable future. Liberty One Lithium Corp. sees it as an opportunity to participate in the diversification and continued growth (and protection) of a robust global energy policy.

Liberty One aims to aid a strategic policy that assures access to lithium, for a better future for everyone.

With edited notes from “An increasingly precious metal” – The Economist, (2016)

Why Now?

According to data collected by Benchmark Mineral Intelligence, the price of lithium carbonate so far in 2016 is 47% higher than last year’s average.

A recent report from Goldman Sachs Group Inc. calls Lithium the” New Gasoline,” while another report by Goldman notes that lithium demand could triple by 2025 to 570,000 tons, driven principally by smartphone and electric-car applications.

Against the backdrop of year-over-year increase in demand for Lithium, principally fueled both by insatiable demand for handheld technology, as well as the growth in electric vehicles, the biggest game-changer in the nation is Tesla Motors massive battery factory in Nevada.

Goldman Sachs estimated that Gigafactory #1 could require the equivalent of 15,000 to 25,000 t of lithium carbonate annually at full capacity, which is ~17% of current lithium output globally. This massive lithium-ion battery-cell factory is projected to cost $5 billion, slated to be fully operational by 2017/2018. Additional lithium demand in Nevada may come from new endeavors such as the proposed electric vehicle startup company Faraday Future (“FF”), which announced a $1 billion investment into phase-1 of its “groundbreaking,” “state-of-the-art automotive production plant” in North Las Vegas. While recent news indicates Faraday’s plans are on hold, the fact remains that there is global potential for future growth in the sector (see graphic below), and America is ideally suited to address a growing national demand with a uniquely domestic resource.

Both Tesla and any future American competitor would currently have to import most of their required lithium compounds from Mexican, South American and/or Asian sources, a demand projected to be 15,000-25,000 t of lithium carbonate required annually by Tesla alone, starting next year.

“In August Bacanora, a Canadian firm, said it had signed a conditional agreement to supply Tesla with lithium hydroxide from a mine that it plans to develop in northern Mexico. Bacanora’s shares jumped on the news —though analysts noted that shipping fine white powder across the United States border would need careful handling.” (The Economist)

Several companies are working on the development of alternatives to conventional solar evaporation production processes which may offer improved options to improve production economics as new technologies become available.

Paradox Basin

The geology and controls of mineralization in the immediate area of the Liberty One Lithium property are reasonably well known as a result of mapping and extensive oil and gas drilling. The presence of the adjacent Cane Creek mine which has been producing potash for 45 years uses a similar process as envisioned for mining lithium at Liberty One indicates that this form of production should be feasible. The recovery of lithium and other products from the supersaturated brines should also be feasible since globally, similar brines are the primary source of the world’s lithium.

While not yet sufficiently well-defined for mining purposes, the lithium resource appear to be extensive, based on historic oil and gas well data, and on brine studies from the 1960’s.

Available data, indicates clearly that mineralization exists and represents a substantial resource as shown by the drilling, sampling and geologic modeling done by prior operators on the property. Historic resource estimates are not currently NI 43-101 compliant, but the Company aims to work towards compliance by additional drilling and examination of additional data by a “Qualified Person.”

As a result of a review of current prices and near-term market projections for the anticipated products, particularly lithium, as well as advances in recovery technology beyond the basic methods used at the adjacent Cane Creek potash mine, it is the Company’s opinion that this property has a reasonable likelihood of being profitably exploited.

The available data from the area of the Liberty One Lithium property is a strong indication of the potential for it to become a producer of lithium and other products. In order to confirm those indications, additional work will be necessary.

Location

The Liberty One Lithium “North Paradox” property consists of 233 placer claims encompassing 4,480 acres located upon the Paradox Basin in Grand County, Utah, 15 km west of the town of Moab, in southeastern Utah. The property can be reached via a dirt road heading west from the Colorado River 1.5 miles north of the Intrepid potash mine site. The nearest commercial airport is at Grand Junction, Colorado, approximately 1.5 hours drive to the north and east.

The property is accessible to a point within a few miles by an all-weather paved road from Moab, Utah which becomes an access road to Dead Horse Point State Park. The center of the project area has numerous oil pump jacks and storage tanks, all of which are serviced by a network of all-weather dirt roads.

The Liberty One property is largely on the top of a large nearly flat plateau or mesa with an approximate elevation of 6000 feet (1850 m). In the northeastern portion of the property, there are several steep NE-trending narrow canyons cutting in to the plateau. Much of the plateau is open flats with sparse sagebrush and grasses. Approximately 30% of the area is covered by open juniper-pinion forest typical of the region.

The climate is high semi-desert with about 10 inches (33 cm) of rainfall per year, mainly as sparse winter snow and summer thunderstorms. Summers are hot and dry although temperatures rarely exceed 100 degrees F (38 C). Winters are moderate with temperatures rarely less than 10 degrees F (-12 C) and modest snowfall accumulation. The area is suitable for year-round operations.

Geology

The Liberty One Lithium Utah property is underlain by a thick series of Mesozoic and Paleozoic sedimentary rocks which make up the Paradox Basin of the north central Colorado Plateau. The Paradox Basin is a large sedimentary basin with a NW-SE long axis. Economic interest in this area has centered on oil and gas production from strata of Devonian, Mississippian and Pennsylvanian age. Regional subsidence in early Pennsylvanian time created a large sedimentary basin with a restricted marine environment, resulting in multiple thick deposits of evaporate minerals including salt and potash. This Pennsylvanian stratigraphic unit is named the Paradox Member of the Hermosa Formation, which contains salt and potash and interbedded dolomite, shale and siltstone. There are several salt and potash horizons in the Paradox, but only one potash mine has been developed, the Cane Creek Mine.

During oil and gas exploration there were several blow-outs caused by the intersection of brines under significant pressure within the Paradox unit. These brines were initially considered a nuisance to drilling but were found to often be super-saturated brines containing high amounts of potash, sodium chloride, magnesium chloride, lithium, bromine, boron and other potentially payable minerals. Only a few holes were drilled specifically to test these brines and all supported the conclusion that these brines could be an economically important resource. The Liberty One Lithium property could potentially produce from both the brines and from solution mining of the potash beds.

Management

Bradley Hoeppner, President & Director

Mr. Hoeppner has participated in a variety of roles within the public markets sector and with a number of publicly listed companies for over 10 years. During this time, he has been instrumental in the successful closing of more than 100 million dollars of public company financing’s. Bradley has played a key role in re-structuring public companies and has been a director of King’s Bay Gold Corp., a TSX-V listed company focused on the exploration of cobalt and other specialty and rare minerals in eastern Canada, principally slated for commercial activities within the burgeoning technology sector (February 2016 to present). Bradley is also a director of Berkwood Resources Corp., a TSX-V listed company involved in the exploration for graphite in Quebec. Previously, he enjoyed a period of service with a Member of Canada’s Parliament, and a turn spent successfully speculating in the real estate market.


Morgan Tincher, Interim CFO & Director

Mr. Tincher brings +20 years of corporate finance experience and +12 years of finance advisory expertise in the technology, entertainment and natural resources sectors with a focus on public and private financing, corporate governance, merger structure, acquisitions and IPOs. Mr. Tincher’s responsibilities include all financial operations management, stakeholder engagement, compliance and regulatory matters. Prior to Liberty One Lithium Corp., he served as CEO, President and Director of Oculus Ventures Corporation (2012 to 2014) through reverse merger acquisition and capitalization ($20MM) of Toronto based Slyce Inc. (now Pounce Technologies Inc.). During the same period, Mr. Tincher assisted in the capitalization ($10MM) of Trace Intelligent Systems of Venice, CA, which led to the acquisition of Draganfly Innovations Inc. Mr. Tincher served (2007-2011) as VP Finance at Probe Resources Ltd. (now Rooster Energy Ltd.) assisting in raising >$50MM in capital via both debt and equity offerings. Mr. Tincher also served as a Director of Inform Resources Corp. (September 2013 to October 2015) and currently serves on the boards of two privately held companies.

Additional Information


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Liberty One Lithium Corp

Profile

Liberty One Lithium Corp. is an emerging exploration company focused on the acquisition and development of high grade lithium brine deposits destined for use by global business interests. The Company believes that strategic resource access is the key to a robust energy strategy to protect economic stability worldwide.

Contact Information

Website: www.libertyonelithium.com
Email: info@l1lithium.com
Main Phone: +1 604 343-4547
Address: 1920 - 1177 W Hastings Street
State: BC
City / Town: Vancouver
Country: CAN
Postal Code: V6E 2K3

Issuer Information

Exchange: TSXV
Issuer Type: CS - Common Stock
Sector/Industry: Energy
$ 0.55 $ 0.01 (1.85%)
Last Price 0.55 Change $ 0.01 Change % 1.85 Tick N/A
Bid 0.54 Bid Size 6,000.00 Ask 0.55 Ask Size 500.00
Open 0.54 High 0.55 Low 0.54 Prev Close 0.54
Last Trade Volume 21,006 52 Wk Hi 0.70 52 Wk Low 0.02
Market Cap 24.6 mi Ex-Div Date N/A Div Rate N/A Yield N/A
Shares 44,664,800.00 EPS (TTM) 0.01 PE Ratio 65.90 Exchange TSXV