Looking for lithium

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This article was published 24/11/2021 (1164 days ago), so information in it may no longer be current.

The second lithium exploration company in less than two months has secured financing in the pursuit of a coveted lithium find in Manitoba.

Snow Lake Lithium raised about US$24 million in a very successful initial public offering. On its first day of trading on the Nasdaq Exchange on Friday, shares were up more than 150 per cent to close to US$18, but all the gains were lost on trading this week with the stock closing at US$7.40 on Tuesday.

The company has claims on property 20 kilometres east of Snow Lake.

Although company officials were not available for an interview, its prospectus said it intends to spend about $3 million on exploration over the next 12 months.

The creation of Snow Lake Lithium folds in a number of claims which had previously been held by a subsidiary of the Australian company, Nova Minerals Ltd.

The global hunt for mine-able lithium deposits is driven by the fact the mineral is a key element of the batteries used in many electronic devices, but more importantly, for the batteries used in electric vehicles.

Despite the fact lithium prices have come down over the past few years, the company’s research suggests demand for lithium will outstrip supply before the end of this decade.

Among other things, Snow Lake Lithium’s published materials tout its intentions to become the first lithium producer in the world to achieve Certified B Corporation.

In its prospectus, it states, “Snow Lake is committed to being the first fully renewable energy powered electric mine in the world that can deliver a completely traceable, conflict-free, net zero carbon, battery grade lithium to the electric vehicle, or EV, consumer market. We aspire to not only set the standard for responsible lithium battery manufacturing but we intend to be the first lithium producer in the world to achieve Certified B Corporation status in the process.”

MaryAnn Mihychuk, president of Manitoba Prospectors and Developers Association, said among other things, the Nasdaq listing sets it apart from other exploration companies active in Manitoba. She speculated that if it had been listed on the TSX Venture Exchange and raised its capital in Canada, it might have not have been quite so successful.

“People want lithium,” she said, but cautioned that despite the demand mineral exploration is a risky business.

“There is speculation and excitement around exploration, but you have to know the market,” she said.

In September, New Age Metals Inc., based out of Rockport, Ont., partnered with Australian lithium producer, Mineral Resources Limited, in an agreement that will see that company spend at least $4 million on exploration over the next few years on New Age’s property near Lac du Bonnet.

Among other features in the Snow Lake Lithium prospectus, the company notes it is close to the Hudson Bay Railway and the Port of Churchill where it would presumably ship the extracted lithium. It is a scenario that has long been imagined would create a winning business plan for the railway.

It has also a memorandum of understanding with a Quebec company to “deliver to us of the first all electric lithium mine in the world” and would build a hydroxide plant in Winnipeg.

In its material to potential investors it says based on current resource — that still requires much development work to verify — a lithium mine at its property could produce 160,000 tonnes per year of lithium concentrate over an eight-to-10 year period with the potential to significantly increase the resource through additional exploration drilling.

martin.cash@freepress.mb.ca

Martin Cash
Reporter

Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.

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