The Inflation Reduction Act Sparks Domestic Lithium Mining Boom

VANCOUVER – Energy Metals News – Production of domestic electric vehicle (EV) batteries is on the rise in North America, thanks to a surge sparked by a small clause in the 2022 Inflation Reduction Act. According to data from automotive website Edmunds, EVs made up 6.7% of all vehicle sales as of May 2023, up from 5.2% during the same month in 2022. If North American automakers are to break their dependence on Asia for lithium, the domestic lithium supply chain must accelerate. Because of the way that the Inflation Reduction Act is worded, domestic lithium can come from both the USA and Canada, where there are several new developments underway from miners such as Usha Resources Ltd. (TSXV:USHA) (OTC:USHAF), Lithium Americas Corp. (NYSE:LAC) (TSX:LAC), Standard Lithium Ltd. (NYSE-American:SLI) (TSXV:SLI), Livent Corporation (NYSE:OROCF), and Piedmont Lithium Inc. (NASDAQ:PLL).

Recently, the Vancouver-based mining company Usha Resources Ltd. (TSXV:USHA) (OTC:USHAF) reported the discovery of a second lithium-cesium-tantalum pegmatite swarm, named “Bingo”, at its White Willow lithium project situated in Ontario, Canada. Following a comprehensive 3-week site assessment, which included the collection and lab analysis of 287 samples, Usha confirmed that the new discovery effectively tripled the potential strike length of the project to over 25km, a range that remains open at both ends.

“As seen at Patriot Battery Metals’ Corvette Project, which has over 20 kilometres of trend, lithium pegmatite swarms occur in clusters, each of which has the potential to become a deposit,” said Deepak Varshney, CEO of Usha Resources, expressing his excitement over the initial results from the White Willow project. “With the discovery of the highly evolved pegmatite system at Bingo, we now have four primary target areas in our 25 kilometre plus trend, with significant ground remaining between Bingo and Maple Leaf for further exploration and follow-up on the initial LCT-pegmatites identified in between. With numerous potential spodumene-bearing targets, we believe Willow to be a flagship asset where Ontario’s next major lithium discovery will occur.”

Before the recent breakthroughs at White Willow, Usha’s primary asset was its Jackpot Lake lithium project based in Nevada, which continues to be crucial to the company. Usha also revealed that it has extended the basal sand and conglomerate zone at Jackpot Lake to a depth of approximately 1,950 feet through drilling, thereby augmenting the previously identified zone from an interval of 273 feet to a total of 423 feet. For context, similar coarse-grained basal units are being actively expanded at the Silver Peak lithium brine mine, the sole domestic lithium supplier in the USA.

Usha is currently endeavoring to finalize and develop a well for sampling at Jackpot Lake, and it also announced in June 2023 the initiation of drilling on a third hole at the site.

“We are thrilled to return to Jackpot Lake and resume drilling,” added Varshney. “The work to-date has demonstrated that Jackpot contains the right system for a major lithium discovery and by exploring to a depth of 2,000 feet, we aim to gather a more comprehensive understanding of the mineral potential within our project area, further enhancing the overall resource estimation and project feasibility of Jackpot Lake.”

In the case of another Nevada-lithium developer, Lithium Americas Corp. (NYSE:LAC) (TSX:LAC), the company will soon be split into two, with its South American assets in one entity, and its upcoming Thacker Pass mine in Nevada in another. For the North American assets, there’s plenty of excitement, as the company commenced its construction on the mine in March 2023, and is on track to be the second operating lithium mine in the USA.

“Starting construction is a momentous milestone for Thacker Pass and one we have been working towards for over a decade,” said Jonathan Evans, President and CEO of Lithium Americas. “We are excited about the prospect of generating economic growth in Northern Nevada and playing a major role in the domestic lithium supply chain for electric vehicles.”

In partnership with ICD Process Technologies, a division of Aquatech, Lithium Americas has already achieved over 99.9% purity of Li2CO3 from Thacker Pass lithium-bearing clays. The demonstration results will enable Lithium Americas to advance with Phase 1 of the Thacker Pass facility producing 40,000 tpa LCE.

Back in May, Standard Lithium Ltd. (NYSE-American:SLI) (TSXV:SLI) boasted it had drilled, sampled and confirmed the highest grade lithium brine in Arkansas from four zones at its South West Arkansas Project, with an average of 563 mg/L Li and a sample of 581 mg/L Li.

“We continue to be very pleasantly surprised by the lithium grades sampled from our projects in Arkansas and Texas,” said Dr. Andy Robinson, President and COO of Standard Lithium. “We previously developed the Preliminary Economic Assessment (PEA) for the SWA Project using a conservative assessment of the lithium brine grades across the project area. Using that conservative resource basis still yielded a PEA with very attractive project economics (after-tax NPV US$1.97 Billion and IRR of 32% at 8% discount rate. We are delighted that sampling from this recent well has led us to find lithium brine with the highest confirmed grade in Arkansas, and we look forward to incorporating these into the forthcoming PFS.”

After the merger of Galaxy Resources and Orocobre Limited, lithium giant Allkem Limited emerged with assets across multiple countries, including lithium brine and borax operations in Argentina, a lithium hydroxide conversion facility in Japan, a high-grade lithium operation located in Australia, and in this case most importantly, a hard-rock project in Canada. Now it’s set for another $10.6-billion mega-merger, this time with Livent Corporation (NYSE:OROCF).

Prior to the merger agreement, Livent’s assets were primarily located in Argentina. However, with the addition of Allkem, Livent’s shareholders would now have exposure to the James Bay Lithium Project in Québec, Canada, where the latest drilling update delivered intercepts with 114m at 1.73% Li2O and 94m at 1.87% Li2O.

“These outstanding drilling results confirm a material extension of mineralisation at James Bay,” said Allkem Managing Director and CEO, Martin Perez de Solay. “Work is now focussed on reviewing the Mineral Resource to include the additional results from the 2023 drilling program and an update is expected by the end of the month. James Bay is a Tier 1 lithium asset with the potential to grow even further as the boundaries of mineralisation are tested through an additional drilling program commencing later in the year.”

Also working in Canada is Piedmont Lithium Inc. (NASDAQ:PLL), which in early August 2023 announced the first commercial shipments from its North American Lithium mine, which the company co-owns with Sayona Mining. According to Piedmont President and CEO Keith Phillips, the first set of shipments marks a pivotal period for the Company as it continues to transition from a developer to a lithium producer. Piedmont is also developing two other North American projects, in North Carolina and Tennessee.

“For the last seven years, Piedmont Lithium has focused on developing a supply of crucial lithium resources, and we are excited to begin generating revenue and cash flow as we see our plans come to fruition,” said Phillips. “Our products will help our customers meet the requirements of the Inflation Reduction Act and, in turn, the growing demands of the U.S. electric vehicle and battery supply chains.”

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