Mar 8, 2021
How this lithium company is riding the EV trend to new heights
- The surge of interest in electric vehicles (EVs) over the past few years is driving lithium demand
- Iconic Mineral’s flagship lithium project is in Nevada — in Tesla’s backyard
- Recent moves have put Iconic in a unique position among Nevada-focused lithium companies
Behind the notable surge of interest in EVs over the past few years is the building global consensus that green, emission-free solutions are needed to address climate change. It’s an environment that just last month had General Motors publicly setting an aspirational goal to have its light-vehicle fleet be emission-free by 2035.
As most car companies continue to release new EV models, they are also moving to lock up their supply chains, including the lithium that powers EV batteries. While China will likely remain the dominant player for lithium battery manufacturing, carmakers are very much interested in securing domestic sources of lithium for the North American market.
With Deloitte forecasting a 29 per cent compound annual growth rate for EVs in the next 10 years, lithium companies with projects near manufacturing facilities will have a decided edge on the competition.
That’s the hope of Iconic Minerals (TSXV: ICM | OTC: BVTEF | FSE: YQGB), a junior exploration company with a flagship lithium project not far from the battery gigafactory Tesla is building in Nevada.
“We’ve got the largest lithium resource in the state, and we’re on the way to proving it’s economic.”
— Richard Kern, President & CEO, Iconic Minerals Ltd.
An advanced-stage lithium project in Nevada
Iconic Minerals actually has two lithium projects in the state — Bonnie Claire and Smith Creek — although Bonnie Claire is by far the most advanced of the two.
The world’s current supply of lithium comes from either brine-hosted or hard rock sources. Chile’s corner of the Lithium Triangle formed by its borders with Argentina and Bolivia is the main source of brine-hosted lithium. However, South America is notoriously expensive to operate due to properties being located in high altitudes and lack of infrastructure. Australia is the primary source of hard-rock lithium production.
Bonnie Claire is a lithium rich sediment deposit the end goal is extract the lithium from the sediments through newly developed technology and methodology, focusing on environmentally friendly methods, at low economic costs. Iconic’s partners have had success in extracting 100% lithium from sediments at lab level, the next step is to prove these extraction capabilities at a larger scale.
Iconic’s project has a key advantage over other lithium projects in the Nevada — its mineralization isn’t tied up in the clay that hosts much of the lithium in the state, which can be more difficult and costly to process. Instead, the Bonnie Claire has a sediment which is much a younger mineralization than other lithium clay deposits in Nevada, giving the company a major advantage to extract the mineral at lower costs.
Iconic Minerals’ president and CEO, Richard Kern, elaborates, “Bonnie Claire is the largest lithium resource in Nevada that isn’t tied up with clay. It’s in a form that’s quite leachable.”
That advantage will likely translate into processing cost savings down the road, using greener tech.
Domestic lithium sources favored by manufacturers like Tesla
Having a ready source of lithium near its gigafactory in Nevada would likely be music to Tesla’s ears.
Last year, the North American EV market share leader signed a deal to take one third of the future lithium supply of a company with a North Carolina-based project. It seems likely that, if Iconic can further establish the value of its project, Bonnie Claire’s proximity to Tesla’s battery-making operations in Nevada will attract the Elon Musk-led company’s attention.
Adding to the project’s allure is a new U.S. administration that’s intent on moving the country in a greener direction. “The Biden administration is on record as wanting to move away from fossil fuels and toward renewables. It has been and, I think, will continue to be easy to permit lithium projects in Nevada,” Kern notes.
Because Bonnie Claire already has a defined resource and has already had some key metallurgical work done on that resource, Iconic is in a good position to advance the project substantially in the coming year. With 11.8 billion pounds of elemental lithium and lithium starting as shallow as 40 ft, and as deep as 1,900 ft, the company could potentially be well-positioned to have one of the largest lithium deposits in North America.
Iconic clears the deck for a complete lithium focus in 2021
As part of that effort, the company recently announced that it is spinning out its gold assets into a separate company, which will give dividends to shareholders at the time it is completed. This will allow Iconic to focus on moving Bonnie Claire forward to its pre-production state target.
Iconic recently closed a private placement that raised $1 million in gross proceeds. Combined with a recent joint venture agreement with Nevada Lithium — which will allow that company to earn up to a 50 per cent interest in the project — Iconic will move to aggressively de-risk Bonnie Claire in 2021. The company’s new JV partners have agreed to put USD$5.6 million towards taking the Bonnie Claire property to a pre-production stage in 18 to 24 months, with the first USD$1.6 million delivered before March 8, 2021.
Additionally, the receipt of this funding will enable the company to move Bonnie Claire at an accelerated pace toward production. Allowing work such as additional resource definition drilling and bulk sampling to be done.
That process will include additional drilling to bring the project’s lithium resource into a higher confidence category. It will also include more metallurgical testing to optimize the processing plan for any operation eventually built at Bonnie Claire.
“We’re going to take our time and study all the possibilities,” says Kern.
With key project expenditures funded by Nevada Lithium this year, Iconic can operate on a low cash-burn-rate while still moving Bonnie Claire forward.
It will also have time and funds to start evaluating Smith Creek for its lithium potential. This project covers 1,507 sq km, which is slightly larger than Clayton Valley Basin where lithium brines are produced. The Smith Creek basin itself is composed of alluvium surrounding a mud flat, a remnant of a paleo-lake.
A near-term catalyst for Iconic’s share price will be the preliminary economic assessment (PEA) it plans to put out on Bonnie Claire. With that study in hand to establish the project’s economics, Iconic will be in a unique position among companies with lithium projects in Nevada.
Kern states, “We’ve got the largest lithium resource in the state, and we’re on the way to proving it’s economic.”
Visit Iconic Minerals’ website to learn more.
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