When it comes to mining, Nevada is the hot spot of the United States. Historically best known for gold and silver, it’s entirely possible that the history books are going to get several chapters added to them on the state’s massive contribution to lithium mining. After all, Nevada is home to the only currently producing lithium mine in North America, Albemarle’s (NYSE: ALB) Silver Peak lithium mine in Clayton Valley.
It’s also home to Tesla’s (TSLA) gigafactory, a $5 billion electric car manufacturing plant in Reno where Elon Musk’s company is expected to consume ever bit of lithium that is presently produced annually. It’s this anticipated surge in demand that is resulting in miners jockeying for highly speculative properties in Nevada (and surrounding states) to stake their claims and get busy exploring to prove reserves.
Let’s not also forget that Faraday, an upstart electric car company financed by a Chinese billionaire who has been called the Elon Musk of China, is also building its electric car assembly plant in Nevada. Last April, Faraday broken ground on its plant north of Las Vegas.
Although lithium has countless uses, rechargeable lithium-ion batteries for electric vehicles is the clear growth driver for the foreseeable future. Value is underpinned by the most basic rule of economics, where demand will outstrip supply, forcing lithium prices higher and higher.
The potential of wealth to be made is reminiscent of the gold and silver rushes over a century and a half ago.
2017 is a year of change for Barisan Gold Corp. (TSX-V:BG) as it shifts gears from its operations being centered on its Upper Tengkereng copper-gold porphyry prospect on the island of Sumatra in Indonesia to mining for lithium in the U.S., a transformation that should reward shareholders far quicker than the prior.
Vancouver-based Barisan took many steps in 2016 to put the plan in motion. Namely, the company is in the process of completing the acquisition of the Railroad Valley Lithium Property in Nevada and the Black Canyon Lithium Property in Arizona from DG Resource Management. Reflective of the business shift, Barisan will soon be known as Lithion Energy Corp. and trade under the ticker LNC as soon as approved by the Toronto Venture Exchange, likely early this year.
If you want to hunt big game, go where big game have been seen before
This old axiom explains why lithium miners want a piece of property in south/south-central Nevada to unearth the world’s lightest solid element. The Railroad Valley Lithium Property is comprised of 199 placer claims covering 9,835 acres considered analogous to Albemarle’s lithium mine. Soil samples documented by the U.S. Geological Survey from the property show elevated concentrations in excess of 500 ppm lithium oxide.
The property is what’s called a lithium brine deposit. When it comes to economical mining, lithium brine deposits, which are found in salt flats, are the way to go. Compared to hard rock mining, lithium brine deposits contain far greater lithium concentrations, are much quicker to bring to production and, require millions of dollars less throughout development, from discovery to production. Nevada is famous for its salt flats (dry lake beds), which are called “playas” in certain parts of the world, including the western U.S. Albemarle’s Silver Peak is considered a world-class playa and is likely that others in Nevada are going to be characterized as such too.
The Black Canyon Lithium Property, which consists of two exploration permits applications, spans about 890 acres in central Arizona. The property is a lithium clay exploration next to the Lyles Hectorite Deposit. Hectoriate is known as a magnesium and lithium rich clay material and the Lyles deposit is reported to have extremely high lithium content of 5,300 ppm lithium oxide. Geological mapping and satellite photo analysis indicate that the properties of Black Canyon’s ground have the same qualities.
Clay materials are the latest source of lithium discovered. Currently, less than 10 percent of the world’s lithium production comes from clay, but the high concentration levels possible and fact mining is less expensive that pegmatites (hard rock) are making it a very attractive new mining target.
Right Property, Right Team, Right Structure
With the property acquisitions in sight, Barisan has shuffled the management team and brought in some new seasoned leadership. Out went CEO Alex Granger, replaced initially by acting CEO Shawn Westcott (formerly President of Barisan), although Westcott will be working together with teams via service agreements with Dahrouge Geological Consulting Ltd. and King & Bay West Management Corp. Westcott is currently VP Corporate Development for King & Bay West, a company led by Mark Morabito, who has raised nearly three-quarters of a billion dollars to finance junior companies. This unusual group dynamic ensures that the company is guided through the transition into Lithion Energy by industry and finance veterans that have deep experience in mineral exploration and capital raises.
Certain officers have already been appointed blending the old Barisan with Dahrouge and K&BW, including Darren Smith as a Director and Vice President of Exploration and Karen Dyczkowski as Chief Financial Officer.
The Board of Directors of the new company is comprised of four members. Smith and Westcott are affiliated directors, while Jenna Hardy, P.Geo, the principal at metal and mining consultancy firm Nimbus Management, and Scott Eldridge, co-founder and President at Euroscandic, are serving as independent directors.
In addition to a name and symbol change, shareholders approved a 1-for-5 share consolidation in November, meaning that the number of outstanding shares upon execution will be approximately 13.1 million. A miner needs capital and the low share count is far more conducive to attracting investors and dovetails with a non-brokered private placement announced to raise gross proceeds up to $700,000 to get operations underway.
The aggregate of these moves as 2016 wound down should jump start corporate value when Barisan Gold becomes Lithion Energy against the backdrop of increasing demand as the electric car revolution gets underway.
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