1. Project Summary
| Commodity: |
Battery-grade lithium carbonate |
| Location: |
La Corne Township, 60 km north of Val d'Or, Quebec |
| Size of property: |
12 claims, 405 hectares |
| Ownership: |
100% Canada Lithium Corp. |
The Quebec Lithium Project, operated under Quebec Lithium Inc., owned 100% by Canada Lithium Corporation, is located in the north-east corner of Lacorne Township, approximately 38 km south-east of Amos, 15 km west of Barraute and 60 km north of Val-d'Or. Access to the site is via a paved road from Val d'Or. The city of Val d'Or is a mining friendly community that has over 100 years of mining history and a population of some 35,000 people. The city hosts an airport and significant support infrastructure. Quebec is one of the top-rated mining jurisdictions in the world and electricity costs, a key input in mining operations, are among the lowest in North America.
The deposit was mined between 1955 and 1965, producing spodumene and lithium carbonate products for sale to the North American market. The project hosts a measured and indicated mineral resource of 31.6 million tonnes grading 1.11% Li
2 and another 38.9 million tonnes in the Inferred mineral resource category.
Canada Lithium Corp has completed a Pre-Feasibility Study (PFS) for the development of the project that anticipates production of up to 19,300 tonnes of 99.5% lithium carbonate product annually, commencing with commissioning in late 2012.
Pre-Feasibility Study Highlights:
| Stage 1 Open Pit Mine: |
2,950 tonnes per day (1 million tonnes/year) |
| |
| Average Annual Stage 1 Production: |
42.6 million lb (19,300t) Li2CO3 |
| |
| Average Annual Stage 1 Revenue: |
US$115 million |
| |
| Stage 1 Pre-tax NPV @ 8% discount: |
US$325 million |
| |
| Pre-tax Internal Rate of Return (IRR): |
33.6% |
| |
| Cash Operating Costs: |
US$2,815 per tonne (US$1.27/lb of Li2CO3) |
| |
| Total Initial Capital Costs: |
US$148 million (includes $27M contingency) |
Other highlights:
| Measured and Indicated Mineral Resources of 31.6Mt at 1.11% Li2O, representing an estimated 1.9 billion lb. (867,000 tonnes) of lithium carbonate equivalent |
| |
| An additional Inferred Mineral Resource of 38.9Mt at 1.12% Li2O (as previously reported on March 4, 2010), representing another 2.3 billion lb. (1.05 million tonnes) of contained lithium carbonate equivalent) |
| |
| Stage 1 of the development covers a production period of 14.8 years with significant additional Measured and Indicated Mineral Resources to expand production within the early years of operations and increase mine life to 30 years |
| |
| Producing high-quality, battery-grade product >99.5% Li2CO3 |
| |
| Discussions with North American end users indicate a potential market for up to 50,000 tonnes per year (tpy) of spodumene, an intermediate product in the proposed flow sheet. The project has the potential to produce this quantity of material. |
| |
| The project has excellent existing road, rail and power infrastructure and is located within a 14-hour drive of Detroit, the emerging North American centre for electric vehicle and battery manufacturers |
2. History
Between 1955 and 1965 the project operated as an underground mine, drawing ore from a system of spodumene-rich dykes. The mine, with its 150-m-deep shaft and lateral workings on three levels was operated under the former Quebec Lithium Corporation and included a surface concentration plant and refinery. It produced ceramic-grade and chemical-grade spodumene concentrates, lithium carbonate, lithium hydroxide monohydrate as well as a small quantity of lithium chloride and feldspar. Primarily marketed to the glass and ceramics industries, spodumene is an intermediate stage product in the processing chain. Alternatively, it can be further refined to battery-grade lithium carbonate for use in electric and hybrid/electric cars, in a myriad of consumer electronic products (laptops, digital cameras, iPods, cellphones, rechargeable hand tools and so on). Metallurgical tests by SGS Lakefield of samples from the Company's Quebec Lithium Project produced battery-grade 99.6% lithium carbonate (see press release dated Sept. 29).
When mining operations were suspended, the ore reserve was stated to be 15,612,300 tonnes at a grade of 1.14% Li2O in the proven, probable and possible categories calculated down to the 150-metre level. The reserve was calculated using an 85% recovery rate and a 7% dilution factor. Over a period of 10 years of operation, the ore hoisted from underground averaged a grade of 1.25% Li
2O.
3. Geology and Resources
The Quebec Lithium Project consists of 12 contiguous claims covering 404.69 hectares. The rocks exposed on the property are Precambrian and consist of volcanic, sedimentary and intrusive rocks. The northern part of the property is underlain by volcanic rocks of a basic to intermediate composition, recrystallised in places to hornblende schists near their contact with the intrusive rocks. The contact has a general east/west direction and a flat dip to the north. Biotite schists of a probable sedimentary origin are found in the western part of the property. Rocks ranging from peridotite to granitic rocks in composition are intruding the volcanics. Peridotite occurs mainly alongside the contact between the volcanics and the more acidic intrusive rocks.
The southern part of the property is underlain by the acidic intrusive rocks which form
the Preissac-Lacorne batholith. These acidic rocks have been locally divided into the following types:
- Muscovite granodiorite, coarse grained, containing numerous pegmatites
- irregularly shaped and low in content of spodumene.
- Biotite granodiorite, fine grained, gneissic.
- Hornblende mica granodiorite, medium-grained and containing most of the spodumene pegmatite dykes of commercial importance.
Fig 1. Pegmatite Dyke System
The deposit outcrops on surface and the original owners drilled over 400 diamond exploration holes from surface and underground. Drilling has intersected mineralised pegmatites to depths of over 320m. Canada Lithium is currently drilling to depths of up to 500m to increase the size of the deposit.
Fig 2. Surface Geology
In October 2009, Caracle Creek International Consulting Inc. (CCIC) completed the digitizing and modeling of all historical data from the former Quebec Lithium mine. The modeling by CCIC increased the target estimate for the mine area to 29-30 million tonnes grading 1.1%-1.2% Li
2KO.
In order to upgrade the conceptual estimate to a National Instrument 43-101 compliant, classifiable resource estimate, the Company recently completed a 7,000-metre verification/delineation drill program at the Quebec Lithium site. This program "twinned" approximately 28 of the more than 400 historic surface and underground holes. Additionally, a number of holes were drilled to approximately 500 metres vertical depth to demonstrate ore continuity at depth in the area of the existing mine workings.
Core from this drilling program is currently being used as a bulk metallurgical sample for ongoing metallurgical testing. This work program is part of the pilot metallurgical test work that will be used for a Bankable Feasibility Study and also to deliver additional marketing samples to Mitsui in Japan.
The 29-30 million tonne potential tonnage estimate by CCIC was based on previous drill results that defined the approximate length, thickness, depth and grade of the historic estimate. This incorporated over 60 surface diamond drill holes, 340 underground drill holes and 21 underground stopes. A three-dimensional geological model was developed from this data to aid in deposit evaluation.
Late in the first quarter 2010, the Company annnouced a 43-101 compliant mineral resource estimate as follows:
Table 1: Measured and Indicated Mineral Resources
| Category |
Tonnes |
Li2O % |
| Measured |
6,896,000 |
1.10 |
| Indicated |
24,740,000 |
1.11 |
| Total M+I |
31,636,000 |
1.11 |
Table 2: Inferred Mineral Resource
| Category |
Tonnes |
Li2O % |
| Inferred |
38,940,000 |
1.12 |
(Inferred Mineral Resource is exclusive of total Measured and Indicated Mineral Resources.)
(The Measured, Indicated and Inferred Mineral Resource and Proven and Probable Mineral Reserve estimates in this press release were prepared in accordance with the CIM "Definition Standards on Mineral Resources and Mineral Reserves" adopted by the CIM Council on December 11, 2005, and the CIM "Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines," adopted by CIM Council on November 23, 2003, in compliance with NI 43-101 guidelines, using the polygonal method.)
4. Mining
Canada Lithium has completed a pre-feasibility study (PFS) for the development of the Quebec Lithium Project. The scope of this work is based on mining and processing 15 million tonnes of ore over a 15-year period, to produce up to 19,300 tonnes of 99.5% lithium carbonate product annually, commencing in late 2012. This work was carried out by BBA Engineers in Montreal.
It is anticipated that the initial operation will consist of open pit mining to a depth of 150 metres below surface, utilising 150-tonne haul trucks and hydraulic excavators. Mining will be carried out at a rate of 2,950 tonnes per day. Mined ore from the pit will be crushed and stockpiled for treatment in the lithium carbonate processing plant.
Fig 3. Long Section
Optimisation studies will continue as the current drilling data provides additional information. It is anticipated that mining below the 150-metre level will be evaluated during the Bankable Feasibility stage of the project.
Fig 4. Preliminary Open Pit Design
5. Processing to Produce Lithium Carbonate on site
BBA and SGS Lakefield are currently finalising the flowsheets and design criteria to design a lithium carbonate production facility on site. This facility will treat an estimated 1 million tonnes per annum of crushed pegmatite ores to produce an intermediate 6.5% spodumene product that will be upgraded, on site, to produce approximately 19,300 tonnes of 99.5% battery-grade lithium carbonate.
The following steps will be utilised in the process, using conventional processing technology and equipment:
- Grinding
- Flotation
- Feed Preparation
- Sulphating Roast
- Leaching and Residue Removal
- Precipitation
- Li2CO3 production
- Marketing and sales
(The figure above shows part of the preliminary flowsheet)
Hydromet Flowsheet
6. Quality
In April 2009, Canada Lithium signed a Marketing Agreement with Mitsui Corp relating to the distribution of battery-grade lithium carbonate in Japan, China and Korea.
In September 2009, the first marketing samples were dispatched to Mitsui in Japan for marketing purposes.
| |
|
CLQ Product |
| Li2CO3 |
Min |
99.60 |
| Cl |
Max |
0.0048 |
| Na |
Max |
0.016 |
| Ca |
Max |
0.016 |
| Mg |
Max |
0.0081 |
| S |
Max |
< 0.01 |
| Fe |
Max |
< 0.0002 |
7. Environment
In August 2009, the Company appointed Genivar Inc. of Amos, Quebec, to undertake an Environmental Impact Study (EIS), which is anticipated to take approximately one year to complete and will outline all environmental concerns and constraints for the Company's proposed development of a 2,950-tonne-per-day lithium mining operation. The environmental study will be conducted in conjunction with the pre-feasibility study recently initiated by BBA Inc. of Montreal.
8. Timetable and Consultants
Canada Lithium Corp.'s Quebec property is an advanced stage, open-pit lithium project that the Company believes could be in production by late 2012, based on the following milestones:
• First Quarter 2010: Pre-Feasibility Study (completed)
• First Quarter 2010: 43-101 Mineral Resource Estimate (completed)
First Quarter 2011: Bankable Feasibility Study
• First Quarter 2011: Engineering/construction under way
• Fourth quarter 2012: Commissioning/production under way
In order to achieve these milestones, the Company has a number of international consulting groups working with its personnel:
SGS Lakefield, during metallurgical tests early in the fall of 2009, produced battery-grade lithium carbonate (Li2CO3.) The tests were designed to achieve the standard 99% lithium carbonate; however, the program exceeded initial design criteria and actually achieved a grade of 99.6% Li
2CO
3. Additional polishing is expected to produce a higher grade product.
The samples were processed and analyzed in several batches and consistent results were achieved. The processed material will be shipped to Mitsui and Co. Limited in Japan. Mitsui is an international trading house that signed a marketing agreement with Canada Lithium in April 2009, granting Mitsui exclusive rights to market lithium (produced from Canada Lithium's Quebec Project) in Japan, Korea and China until April 2010. Mitsui retains an option to extend the agreement annually for six subsequent years.
As a result of this early metallurgical success, Canada Lithium is working with SGS Lakefield to develop a pilot-scale test, planned to commence in January 2010, to produce additional battery-grade material for pre-marketing purposes. (As noted above, test samples were processed by SGS Lakefield. )
BBA Inc. of Montreal is currently working on the pre-feasibility study of the Quebec Lithium Project. This study is expected to lead to a preliminary engineering and flow sheet design, integrating all historical data with recently completed metallurgical testing and on-going mine-site infrastructure work. It is anticipated that this will form the initial step in preparation for a full feasibility study in 2010. BBA Inc. is a highly regarded Quebec engineering consulting firm that has successfully undertaken numerous large engineering studies of both operating and development-stage mines in Canada and internationally.
Caracle Creek International Consulting Inc. has completed the digitizing of all historical Quebec Lithium Mine data and is in the latter phase of three-dimensional resource modeling to aid in further deposit evaluation. This work will be integrated with a drill program and is expected to lead to the completion of a NI 43-101 report on the deposit by the end of the year.
