Canada’s sweet on Lady Lithium and Aussie explorers are sharing the love
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ASX-listed mining companies are swarming into Canada’s emerging lithium precincts to take advantage of near-mine supply chains and a huge critical minerals market south of its borders.
Once widely recognised for its maple syrup racket, Canada – much like Australia – is globally renowned for its advanced and highly robust mining industry.
The nation is the world’s second-largest by area and a global leader in the production of potash, as well as consistently ranking among the top five global producers for diamonds, gold, platinum group metals, aluminium, titanium concentrate and uranium.
You may recognise this group of raw materials from Australia’s own major commodity portfolio – sans being a top iron ore and coal producer.
And the similarities run even deeper.
Both countries are very large and sparsely populated, with digging often occurring in underdeveloped regional areas where there are large proportions of Indigenous inhabitants.
Australia and Canada also share similar migrant ancestry, culture and language; making it easier to do business today.
They’re also rich in resources yet have somewhat underdeveloped infrastructure once you traverse into the interior. They are sparsely populated where large proportions of the inhabitants are Indigenous. Both are large physical areas with similar geopolitical environments and are well-endowed with minerals and resources.
Historically, both Canada and Australia are almost in a league of their own when it comes to resources extraction techniques and governance; bolstered by unique interoperability between mining companies doing business in each other’s jurisdictions.
Moving into the present, there’s currently a huge push from global market forces and governments to achieve net-zero carbon emissions targets up to 2050 and produce and refine battery-grade materials for energy storage, electric vehicles and a large number of other various technological applications where lithium is a key element.
It seems like it’s Canada’s turn to dance with Lady Lithium, and there’s a plethora of ASX-listed miners pouring in to join the party. We’ll get to them soon, but first, let’s find out exactly why and where.
Recognition of its endowment of mineral riches and astute government policies over the last couple of decades has made Canada unbelievably attractive for explorers with its variety of tax incentives including enhanced deductions, allowances, and credits that can be claimed against income from mining operations. There are also special tax incentives for investors in mining companies.
It’s also been facilitating lucrative trade agreements between countries to make it easier for Canadian mining companies to do business in resource-rich areas.
Moreover, the government is providing foreign mining firms the same opportunities; another very attractive factor for foreign mining companies to come to Canada.
The two nations also love doing business with each other. In its March Commodity Insights Report, S&P Global notes that in 2022 there were many mining M&A deals inked between Canada and Australia.
Canada made 13 deals and Australia 12, which made up ~45% of the companies and projects targeted for dealmaking in mining last year. Together they accounted for 69% of the total mining deal value – Canada at US$8.83 billion and Australia at US$7.96 billion.
The cherry on top though is Canada’s 2022 Critical Minerals Strategy released in December last year, backed by an eye-watering C$4 billion to support investments across the whole critical minerals supply chain, from exploration to manufacturing, including C$1.5 billion to support critical minerals exploration and development.
Vicinity to one of the world’s largest critical mineral markets – the US – makes a strong case for mineral exploration and development north of their border.
There are also a host of major manufacturers setting up shop in Canada to take advantage of having close-to-mine downstream processing and battery production capabilities in both Ontario and Quebec.
Circling further up the supply chain, car manufacturers such as Stellantis (who makes the Dodge, Jeep, Alfa Romeo, Citroën, Peugeot brands) are expanding in Canada. Add Ford and Honda to the mix.
While Australia is at the forefront of hard rock lithium production, the Canucks are fast-becoming major players themselves in this burgeoning market – with two concrete jurisdictions emerging in northwest Ontario and Quebec’s James Bay.
Mining in Ontario at the moment is Critical Resources (ASX:CRR) executive Alex Cheeseman, who believes Aussie miners stand to gain a lot from focusing their efforts into Canada.
“Canada’s been underexplored for battery minerals and lithium in particular,” Cheeseman told Stockhead.
“Canada’s fairly well resource endowed for critical minerals but it hasn’t been a focus.
“The style and approach of Aussie companies coming in, Aussie explorers, we seem to be a lot more robust and intense in our exploration efforts versus some of the TSX companies that have sort of tried these things and done relatively small programs, maybe mining the market more than actually mining the ground.
“So that approach is delivering results for the Aussies who are rolling in looking for critical minerals.”
Historically known for gold mining, explorers in James Bay are blessed with huge caches of already mapped geological data to work off, making it easier and more cost-effective for initial exploration activities.
When Galaxy Resources and Orocobre merged to become Allkem (ASX:AKE) in 2021 and pushed on with its own James Bay lithium project, the US$10bn market-capped miner made a statement to the resources industry that the region was starting to mature.
At its projected US$333/t, Allkem recently poured US$283m into extending its mine life, but says James Bay would only take 2.4 years to pay back for an impressive pre-tax NPV of US$1.42 billion and an IRR of 45.8%.
Recharge Metals (ASX:REC) is making exploration headway into the region, notably at its Express lithium project – just 12km southeast of Allkem’s 321,000tpa deposit.
It’s got four high-priority targets it’s currently investigating and plans to start spinning the drillbit once it receives mapping data.
The explorer also just completed the acquisition of the Wapistan lithium project, also in James Bay and close to recent exploration success by Q2 Metals and Ophir Gold.
“The ‘belt-scale’ Wapistan project significantly enhances our James Bay footprint,” REC MD Felicity Repacholi-Muir said.
“The geology of the project, its proximity to other highly successful projects, and having geological teams available nearby that can start quickly, make this an obvious opportunity to create value for Recharge’s investors.”
Interpretation of spectral data identified a substantial number of potential pegmatite occurrences, outlining three significant targets within the project area.
All target areas will be evaluated on the ground during REC’s maiden field program this month.
Battery Age Minerals (ASX:BM8) has also dipped its toes into the Bay this year and is led by CEO Gerard O’Donovan of Pilbara Minerals (ASX:PLS) fame, so they definitely know something about hard rock mining.
In latest news, maiden drilling at BM8s Falcon Lake lithium project in Ontario intersected “very encouraging” spodumene-bearing pegmatites that highlights potential for significant mineralisation.
“We are extremely pleased with the initial results from our early holes at Falcon Lake. Our maiden drill program is off to a fantastic start with very encouraging visual observations from the first group of drill-holes,” O’Donovan said.
“Our experienced field team has logged a number of significant intervals of spodumene-bearing mineralisation from surface in 10 of the first 13 holes, validating our belief that Falcon Lake has the potential to host thick pegmatites and, subject to receipt of assays, significant lithium mineralisation.”
Recently acquiring the Wali and the Ernst Lake projects in James Bay back in May is Resource Base (ASX:RBX).
The project covers 100 mineral claims, or 51.12km2, and the greenstone belt (Guyer Formation) within the project is interpreted to be a ‘dismembered’ section of the same Guyer Formation belt that hosts Patriot’s impressive CV5 discovery.
Both greenstone belts occur at the contact between the intrusive tonalite to the south and granodiorite to the north, which may be the source granites for the unusually large lithium-caesium-tantalum (LCT) pegmatites in the area.
Fin Resources (ASX:FIN) is gearing up to start field work at its ~138km2 strategic suite of lithium projects in James Bay, which will include ground-based mapping, geophysics, rock and/or soil sampling.
Its Mt Tremblant lithium projects include two hard-rock lithium projects – Ross and Cancet West – along with the Gaspe project, prospective for lithium-in-clay mineralisation on the Gaspe Peninsula.
“The first field trip programme will focus on the Ross project and Cancet West, they’re our two pegmatite-hosted lithium projects,” FIN technical adviser Tom Ridges said.
“I think investors will find our $9 million market cap appealing, we have a really good enterprise value, and a fair bit of cash in the bank.”
The North West region of Ontario above Lake Superior is a fledgling lithium precinct that’s definitely picking up traction.
The province is encouraging project development and is seeing the start of what could be a major source of jobs and revenue for the region.
You’ve got Patriot Lithium (ASX:PAT) in Ontario, which has a portfolio of seven lithium projects across a total area of 1,164km2, notably its Gorman and Pak East projects in an emerging lithium district along strike from Frontier Lithium’s (TSXV:FL) Tier 1 PAK lithium project containing a 26Mt @ 1.6% Li20 Measured & Indicated resource and a 32.5Mt @ 1.4% Li20 Inferred resource.
Swimming around Seymour Lake is Green Technology Metals (ASX:GT1) which recently secured a $20m investment from Korea’s LG in May. It’s sitting on a 22.5Mt resource and is currently in the middle of a large diamond drilling exploration program across the Root Bay deposit and other project areas.
3,741m and 19 holes have already been completed as part of an initial 22,000m diamond drilling program focused on adding tonnes to the existing resource and will be followed by extensional drilling over 3km of untested, highly-prospective extensions of the deposit.
Sultan Resources (ASX:SLZ) is a relative newcomer to Canadian lithium after the late May purchase of the Kember Lake and Ruddy lithium projects – just north of GT1’s tenements.
Exploration at Ruddy is focused on an interpreted “LCT Goldilocks Zone” identified by other lithium explorers in the region, which covers about 3.5km of east-west strike in the centre to south of Ruddy.
Helicopter-supported geologists have already noted multiple pegmatite occurrences of up to 30m outcrop and up to 15m in width within this zone.
Another advanced project in Ontario is Critical Resources’ (ASX:CRR) Mavis Lake, where its team has quickly drilled out a JORC 2012 compliant resource of 8Mt at 1.07% Li2O.
Many Peaks Gold (ASX:MPG) has diversified into lithium in Newfoundland at its Aska project. The company is planning field programs, including reconnaissance mapping and rock chip sampling supported by interpretation of various satellite imagery datasets to better define the metallogenic zonation of the pegmatite field within the project area.
“This mapping and sampling campaign is anticipated to vector exploration activity into the targeted metalliferous zone(s) for lithium often referred to as the ‘Goldilocks zone’ where Many Peaks will provide regular updates for results and follow-on exploration plans as they develop,” the company stated.
Meanwhile, Arizona Lithium (ASX:AZL) is busy in Saskatchewan, having commenced works to upgrade the Prairie JORC Inferred mineral resource of 4.1 million tonnes of lithium carbonate equivalent (LCE) at 111mg/l Li, which stands as the highest quality inferred lithium brine resource in Canada and a world-class lithium resource.
So far, AZL has completed the first two phases of offsite testing on selected DLE technology at the Prairie lithium project and has elected to move forward with a larger third-phase DLE pilot in Saskatchewan planned for November.
The company’s goal is to use the data to scope and design how a commercial DLE facility may function on its Prairie Project.
And Manhattan Corp (ASX:MHC) says samples from spodumene show the potential of a major economic lithium discovery at is Chebogue project in Nova Scotia.
The analytical results from samples collected of the spodumene-bearing pegmatite boulders, reported on June 5, have returned high-grade Li20 with standout grades including 2.24% and 2.22% from the ‘Rainy Day’ pegmatite train.
In total, 18 pegmatite samples identified as containing spodumene were sent for analysis with 13 of these samples returning >1% Li2O.
Burley Minerals (ASX:BUR) is making headway into the region with its new Chubb lithium project in Quebec’s Val-d’Or region that it purchased back in February.
Recently drilled intersections support previous high-grade (>1.2% Li2O) spodumene mineralisation results which also returned up to 1.93% Li2O.
“The 2023 drilling results at the Chubb Central deposit build on a high-grade spodumene zone identified in mapping and subsequently in drilling undertaken in 2021 and 2022,” Burley Minerals chair Bryan Dixon said.
“The drilling has now proven continuity of more than 560m in the main dyke structure, and to a depth of 200m down dip.
“The next drill holes will focus on chasing the Main Dyke down plunge where we are seeing a thickening of the spodumene mineralisation.”
More diamond core drilling is currently underway at the Central Main Dyke project area to further prove up the project.
At Stockhead we tell it like it is. While Arizona Lithium, Manhattan Corp, Many Peaks Gold, Sultan Resources, Green Technology Metals, Patriot Lithium, Fin Resources, Resource Base, Burley Minerals, Battery Age Minerals and Recharge Metals are Stockhead advertisers, they did not sponsor this article.