JV Article: Lomiko Metals aims to supply essential minerals for a green energy future
Lomiko Metals (TSXV: LMR; US-OTC: LMRMF) has ambitions to become a billion-dollar company, says Gordana Slepcev, the company’s chief operating officer.
The Canadian junior is exploring graphite and lithium, critical materials needed for the global transition to a greener energy future. Both graphite and lithium are used in lithium-ion batteries for electric vehicles (EVs) and are essential to the expansion of the EV market and the green energy sector in North America.
Lomiko is currently focused on its flagship, 100% owned La Loutre graphite project in southeastern Quebec, approximately 180 km northwest of Montreal.
The project “has the potential to provide high-quality, low-cost natural graphite needed to manufacture spherical graphite for lithium-ion battery anodes,” Slepcev said.
“La Loutre is close to major industries on the East Coast of North America and less than 200 km from the Port of Montreal, which positions it perfectly to supply graphite to the supply chains of electric vehicles in North America. and in Europe.”
Benchmark Mineral Intelligence forecasts that the battery industry’s demand for graphite is expected to increase by 30% per year over the next decade. However, the market analyst said he expects a global graphite deficit from 2022 that will reach 8 million tonnes by 2040.
The La Loutre property, with an area of 28.7 km2, is located in the middle of several other graphite projects in a mineralized zone called Grenville Trend. These include the Lac-des-Iles mine and mill, the only graphite mine currently in operation in North America, about 50 km northwest of La Loutre, which was acquired by Northern Graphite (TSXV: NGC; US-OTC: NGPHF) of the Imerys group in December; and the Matawinie graphite project, owned by New World Graphite (TSXV: NOU; US-OTC: NMGRF), about 100 km northeast.
Slepcev says La Loutre benefits significantly from existing infrastructure and great geology. “It is easily accessible by highways, is powered by inexpensive, low-carbon hydroelectricity, and we believe we can develop modern, environmentally friendly key mineral mining in the region.”
The Project’s graphite occurs in two mineralized zones: the Electric Vehicle Zone and the Battery Zone, approximately 400 meters south of Electric Vehicle. To date, Lomiko has drilled 49 holes (6,942 meters) on Electric Vehicle and 62 holes (8,218 meters) on Battery.
A preliminary economic assessment for La Loutre in August projected an open pit mine producing 97,400 tonnes of graphite concentrate over a 15-year life for a total life-of-mine production of 1.4 million tonnes. graphite concentrate. All-in sustaining costs are expected to average US$406 per tonne of graphite concentrate over the life of mine.
Initial capital costs were set at $236.1 million, of which $37.7 million was budgeted for life-of-mine capital maintenance. The study estimated the after-tax net present value at $185.6 million, based on an 8% discount rate and US$916 per tonne of graphite concentrate, with an internal rate of return 21.5% after-tax and a payback period of just over four years.
The preliminary study was based on 23.2 million indicated tonnes grading 4.51% graphite for 1 million tonnes of contained graphite and on inferred resources of 46.8 million tonnes grading 4.01% graphite for 1 .9 million tons of graphite. The mineral resource estimate used a cut-off grade of 1.5% graphite.
The study “positions La Loutre as a potentially very profitable mine, especially given expected increases in graphite prices,” Slepcev said. “The operation will also be an environmentally friendly mine that will dewater tailings and dispose of them together with waste rock instead of using a traditional tailings storage facility.”
Further drilling on the project, she added, “will increase the quality of the mineral endowment and improve the resources in the measured and indicated category. We are currently permitting a planned exploration program and expect to release an updated resource estimate in the fall of this year. »
Lomiko plans to complete 18,700 meters of drilling comprising 114 infill holes (16,700 meters) and 13 extension holes (2,000 meters) along strike to confirm the shape and extent of the ore body. Drilling is expected to begin in the first half of this year.
“After drilling and upgrading resources, we will initiate a pre-feasibility study on the project which we expect to complete by the second quarter of 2023 and will include plans for a carbon neutral mine,” Slepcev said. .
The company, she continued, currently has approximately $3.8 million in cash and recently raised $3.6 million in private placements “so it is well funded to complete our planned work program for This year”.
Lomiko’s other asset is the 102.5 km2 Bourier lithium property in the James Bay region of Quebec, approximately 450 km northeast of Val-d’Or.
As part of a profit-sharing agreement with Lithium Critical Elements (TSXV: CRE; US-OTC: CRECF) signed in April 2021, Lomiko has the right to acquire an initial 49% interest in Bourier by paying $50,000 in cash, issuing 5 million common shares of Lomiko to Critical Elements Lithium and spending $1.3 million on exploration, of which $550,000 was to be committed or funded by December 31, 2021.
In January, an amendment to the agreement allowed Lomiko to defer and add a $251,772 shortfall in exploration expenditures in 2022 on top of the $750,000 the company is required to incur or fund by December 31, 2022.
Upon completion, Lomiko will then have the option to increase its stake in Bourier from 49% to 70% by paying an additional $250,000 in cash, issuing an additional 2.5 million common shares and spending $2 million in exploration.
Critical Elements Lithium will retain a 2% net smelter return (NSR) royalty on Bourier, of which Lomiko can purchase 1% for $2 million. Critical Elements will remain as operator of the project while Lomiko completes its integration.
The previous joint venture article is PROMOTING CONTENT sponsored by LOMIKO METALS and produced in cooperation with The Northern Miner. To visit www.lomiko.com for more information.