North American Lithium (NAL) - A Look at a North American Near-Term Lithium Producer
The future is sealed; batteries will rule the automotive industry as more and more countries outlaw combustion engines. Lithium (Li) is the lightest metal with the highest energy density, allowing the metal to supply the maximum charge per kilogram, which, in turn, makes it excellent for battery use.
Current global lithium production is not enough to meet future demand and with countries around the world increasingly shunning fossil fuels, demand for a secure supply of lithium will drive growth of lithium mining companies.
One company is already on its way to commercial production of lithium.
North American Lithium (NAL) acquired and is re-starting one of the only near-term viable hard rock lithium operations globally. North American Lithium is the 100-per-cent owner of the Québec Lithium Mine in Val-d’Or, Quebec, a mine site located within reach of North America’s largest markets and export terminals.
According to the 2016 Fraser Institute Annual Survey Mining Jurisdictions, Québec ranks as one of the top 10 mining jurisdictions in the world, with a low tax rate, low energy costs and a mining friendly government. NAL’s mine is situated about 60 kilometres north of Val-D’Or, a city with a population of 35,000 residents that provides an abundance of skilled mining labor for the region. The site also happens to be serviced by excellent regional and site-based infrastructure with access to natural gas, hydropower, highways, rail, and air. With security of supply a top priority for technology companies, businesses that require lithium will want to source their supply from safe and stable jurisdictions.
NAL’s lithium project is a past-producing mine with approximately $500 million already spent on the development of the property. Previous companies completed the necessary work to advance the project to the brink of commissioning. In addition, over $100 million has been invested by NAL shareholders over the last two years, shortening the timeline to production for a junior mining company.
Previous work at NAL’s mine site revealed significant mineral resource estimates for a long operating life. As of May 2017, the company has measured resources of 13.5 Mt tonnes at 1.08 %Li2, indicated 25.8 Mt at 1.02 %Li2 for a total of measured and indicated of 39.3 Mt tonnes at 1.04 %Li2. Also as of May 2017, the site proved 11.9 Mt at 0.94 %Li2 and probable reserves of 8.9 Mt at 93 %Li2. Infill-drilling confirmed previous drilling data and the 2016 drill campaign shows potential to extend reserve life from material within current mining lease. Currently, the project is fully permitted, in possession of all permits/licenses to restart the mine, processing facility and tailings.
The amount of previous work, in addition to the size of the resource and the improved market demand for lithium prompted NAL to acquire the asset in 2016. NAL is a joint investment venture between Jien International Investments Ltd. and Investissement Québec. Jien has a successful track record in Québec, having invested $1.6 billion in Northern Québec nickel, copper and PGM producer Canadian Royalties Inc. (CRI). The company has strong relationships with China and other Asian markets with an experienced, Canadian-based operational, technical and finance team. Management has experience with turning around mines in Québec and a unique access to Chinese lithium converter markets.
NAL is led by Chief Executive Officer and Director, James Xiang. James Xiang has had a successful track record as an entrepreneur, investor and savvy rescue artist since immigrating to Canada in 2001. In 2005, Xiang began pursuing a career in the resource sector and successfully brought a China-based nickel-copper project, GobiMin Inc, to list on the TSX. In less than one and a half years, GobiMin’s market cap grew by 10 times. Under his management during the financial crisis of 2008, GobiMin was able to sell its main project to a Chinese firm in an all cash-deal which proved his ability to take advantage of both North American market and Chinese markets.
James Xiang was also instrumental in the turnaround of Canadian Royalties Inc. As the company’s CEO, Xiang re-built the company’s senior management and corporate strategy, which was work that ultimately led to a company turnabout that caught the attention of the market, especially Investissment Québec, which partnered with Xiang at NAL.
Future plans for the company include developing and completing the improvement of its existing lithium processing facilities, becoming a commercial producer of lithium carbonate, and looking for expansion and acquisition in Québec and globally.