Another ASX-listed lithium explorer is poised to roll the dice in Canada’s battery ecosystem
The new CEO of ASX lithium hopeful Battery Age Minerals (ASX:BM8) Gerard O’Donovan has seen it all since he first stepped into lithium in 2015, eventually becoming the project manager on the concentrator at Pilbara Minerals’ (ASX:PLS) Pilgangoora mine.
From there he saw the downturn as the new supply brought on by WA miners like Pilbara flooded the market, before leaving to work on Rio’s Winu’s copper-gold discovery, and returned to oversee the rebuild of the Ngangaju plant at Pilgangoora, acquired from PLS’ collapsed neighbour Altura, as the lithium market rose like a phoenix to new heights.
With over seven years at the coalface, O’Donovan is well placed to comment on predictions the lithium market, stirred to record levels amid a supply shortage prompted by an explosion in global electric vehicle sales, could face a crash.
“There’s a big misnomer and there’s a massive amount of investment in gigafactories,” he said.
“But a gigafactory can be built in half the time, even less, than it takes to develop a raw material mine.
“There is a disconnect. I just can’t agree with Goldmans and these guys with respect to their price forecasts for years to come. I can’t see it happening — US$800/t SC6.
“Calling a spade a spade, if it goes that way half of us might as well pack up.”
And O’Donovan has no intention of doing anything like that.
He has been tasked with steering the former Pathfinder Resources, suspended since April last year, through its reinvention as a lithium explorer.
The prize is the Falcon Lake project in Ontario, Canada, where historic drill intercepts of 24.4m at 1.48% Li2O from 10.9m and 21.7m at 1.09% Li2O from 48m from 2016 present a convincing case to revisit the lightly explored property.
On relisting BM8 will be earning up to a 90% interest in Falcon Lake, along with an 85% interest in the Tidili copper-lead project in Morocco and 15%, earning up to 80% in the Bleiberg zinc-lead-germanium project in Austria.
The latter two are early stage gambits, but Falcon Lake is a tantalising prospect, over 3000 hectares of prospective tenure in the Thunder Bay mining division to the east of Green Technology Metals’ (ASX:GT1) 9.9Mt at 1.04% Li2O Seymour resource.
Along the same Greenstone Belt sits GT1’s Root asset where a resource is expected this year after bonanza hits like 4.06% Li2O, along with Critical Resources’ (ASX:CRR) Mavis Lake project.
Given those facts, Canada’s hunger to develop its local battery supply chain, Ontario’s own five year critical minerals strategy and the incredible surge in demand for lithium, it seems remarkable the asset hasn’t been explored further.
“We all know the government in Canada is rolling right in behind what they’re calling the battery ecosystem, so their critical minerals strategy, everything that goes along with that is really supportive,” O’Donovan says.
“There was some historical exploration on our asset, which I really liked. It was explored in the ’50s by a company called British Canadian Lithium Mines.
“It was then explored again by a company called Argonaut, who are based in Adelaide, an Australian company. They put maybe 10 to 12 holes in around one asset they had, they had one extremely good intercept of 1.43% over 24m from 10m, so pretty much at surface.
“If you looked at the 2022-2023 intercepts to date that’d be right up there. So that really attracted me to the project.”
Canada has emerged as one of the hottest markets for ASX lithium companies.
Not only do Australian mining execs seem to be roaming Toronto’s streets at an ever growing rate, but many are the trailblazers who worked with Irish-born O’Donovan to build the modern Australian lithium industry.
His mentor Ken Brinsden, who O’Donovan first worked with at Atlas Iron during the iron ore boom, is the chair of Patriot Battery Metals (ASX:PMT) which looks to be onto a major discovery in Quebec’s James Bay region.
The former general manager of Altura, ex-Atlas Iron man Chris Evans, is there as the MD of Winsome Resources (ASX:WR1).
The idea of building what the Canadian Government wants to see as a battery metals ecosystem has its allure for Australians who see Canada as an exciting new frontier for hard rock lithium producers.
“I love WA and the Pilbara, it’s got a place in my heart that I’ll never ever forget, but unfortunately, we’ll always be putting things on boats here, right? It’s just the way it is. Whereas Canada is pushing towards this … ecosystem is the terminology they use and I love it,” O’Donovan said.
“That sort of philosophy or drive has never really existed in Western Australia or Australia, we’ve always sort of leveraged that OK we’ll ship it to China, sell it to India.
“Whereas Canada now is going ‘we’re going to retain all the supply chain, we’re going to retain all the value’ and it’s obviously going to lift the country as a whole and for that reason, I think the investment will come.
“That’s why I’m keen on Canada, and that’s why I would hedge a bet Ken is there, Chris Evans is there, Evan Cranston was walking around with Vital Metals the other day with Trudeau.
“All these boys are in Canada for a reason, they’re the visionaries of this business, they’re the guys who saw it coming years ago, where are they now? There must be a reason behind it.”
Just down the road from the Thunder Bay asset is Windsor, Ontario, where auto giant Stellantis and LG are developing a C$5 billion electric vehicle battery plant.
Just across the border, the legendary US carmaking hub of Detroit.
“So if you look at where we’re located, within a 1000km radius of our asset, you’ve got all the major players,” O’Donovan said.
“GT1 are talking about a concentrator in Thunder Bay, which is a great prospect and then you’re only a stone’s throw from Windsor and Detroit, which were historically the two biggest car manufacturing regions in the world for decades and decades and decades.
“All the big companies, Stellantis, LG Chem, they’re all located in that area.
“They need supply.”
Battery Age Minerals announced on January 10 that it has cleared the $6.5m minimum subscription for the $6.5-7m raising to restore BM8 to ASX trade, with an expected requotation date of February 1 pending the exchange’s timetables.
The extended 40c per share offer closed last Friday.
Having already carved out Pathfinder’s Hamersley Iron project into 2021’s Equinox Resources (ASX:EQN) float, where it still holds a more than 36% stake, BM8 will be fully focused on battery metals.
According to its prospectus, up to $2.47 million has been committed to investing Falcon Lake over the first two years after relisting, with up to $1.4m to go towards drilling and assaying.
O’Donovan says BM8’s plan is to marry local knowledge with the lessons of the Australian lithium experience.
“We will bring some Australian expertise to Canada. We have a few people lined up to join the company,” he said.
“They haven’t joined us as yet, because we wanted to formalise all our ASX items, but they’re heavily experienced lithium boys who will add a wealth of knowledge and exploration expertise to drive that program.
“And then we’re also partnering with a company called Coast Mountain Geological, who are a Canadian-based geological company who for years have (had) pegmatite experience in the region.
“So we’re trying to mesh together the expertise of Australian exploration and local knowledge to make sure that we’ve got a competent team to actually go and explore this in a targeted fashion.”
With Ken Brinsden looking like he’s onto another good thing at PMT, his successor Dale Henderson taking the $15b Aussie miner to new heights and another famous Atlas Iron name blazing a path in lithium in Red Dirt Metals (ASX:RDT) executive chairman David Flanagan, O’Donovan is understandably hoping lightning strikes again.
“I’d love it to go like Pilbara, right? That’d be fantastic. Is it going to be? Who knows,” he quips.
“We’ve got to get in there and start turning a drill rig and understand what’s in the ground.
“I can talk about historical stuff all I want, and it’s really good and encouraging, but the proof is in the pudding when we get on the ground.”