As the United States and Canadian governments invest tens of billions of dollars in creating a North American supply chain for lithium, ACME Lithium Inc. (CSE:ACME, OTCQB:ACLHF) is one option for investors seeking exposure to this generational opportunity.
Backed by top lithium investors such as Lithium Royalty Corp (TSX:LIRC). and Waratah Capital Advisors, ACME Lithium is well-positioned to take advantage of the increasing demand for this critical mineral.
It has a diverse portfolio of properties in areas known for lithium development, including in the epicentre for lithium production in the United States, Esmeralda County in Nevada. It also has projects in Manitoba and Saskatchewan.
“I believe we’ve got one of the best portfolios of exploration projects for lithium in North America,” president and chief executive officer Stephen Hanson tells Proactive.
“Having multiple projects gives investors more than one opportunity and it diversifies the exploration risk.”
Significantly, the company’s Clayton Valley lithium brine project is in the midst of a Phase 2 drill program and neighbours one of the largest global producers of lithium, Albemarle Corporation.
Albemarle’s Silver Peak Mine is one of the only lithium mines currently in production in the United States.
Nevada’s Silver Peak region was also the site of the first large-scale extraction of lithium brine, which took place starting in 1966.
ACME believes its Clayton Valley project has the potential to host lithium brines similar to those at Silver Peak.
Additionally, located about 25 kilometres to the west of Clayton Valley is ACME’s 4,139-acre Fish Lake Valley project, a sedimentary claystone site that the company says is ready to drill after having completed a multi-stage exploration program.
A Phase 2 geological field review and sampling program at the project returned lithium values exceeding 1,200 ppm, with the highest surface value to date coming in at 1,418 ppm. Boron anomalies up to 1,964 ppm occurred with and adjacent to the surface lithium anomalies.
Notably, the Fish Lake Valley project is located near Ioneer’s world-class Rhyolite Ridge lithium-boron project, which is in late-stage permitting and expected to go into construction in the first quarter of 2024.
Australia-based Ioneer recently signed offtake agreements with Ford, Toyota, Panasonic and EcoPro Innovation out of South Korea to supply lithium for the production of electric vehicles.
Across the border to the north, ACME holds a 100% interest in 37 claims totalling 17,000 acres in the Bird River Greenstone Belt in Manitoba.
ACME’s three projects in this area, Cat-Euclid Lake, Shatford Lake and Birse Lake, neighbour Sinomine Corporation’s Tanco Mine, where commercial production from LCT pegmatites (Lithium, Cesium, Tantalum) has taken place off and on for more than 50 years.
ACME continues to evaluate the project for future work after completing the 2023 winter drill program at Shatford Lake.
Rounding out ACME Lithium’s portfolio is the 41,694-hectare Bailey Lake pegmatite discovery area, which contains indications of spodumene-bearing pegmatites with potentially economic-grade lithium based on historic sampling.
Creating a North American lithium supply chain
ACME Lithium’s focus is on creating a North American supply chain for lithium, which Hanson believes has presented a generational opportunity for investors given the projected growth in the lithium-ion battery market.
The global lithium-ion battery market exceeded US$52.5 billion in 2022 and is expected to expand at a 16.5% compound annual rate from 2023 to 2032 spurred by momentum in the electric vehicle sector.
“The need to have a domestic supply of lithium has reached a level that we’ve never seen before as demand continues to skyrocket for battery metals driven by hybrid and electric vehicle demand as well as grid storage and use in our daily lives,” Hanson says.
The CEO highlighted that one component helping to propel the lithium sector is the backing of the United States and Canadian governments, which are both supporting its development through policies and investment.
He noted the Biden administration’s critical minerals strategy of October 2022 and the Inflation Reduction Act as significant moves in the United States, while the Canadian government unveiled its own critical minerals strategy in December 2022.
Importantly for ACME Lithium with its Bailey Lake project, the provincial government in Saskatchewan in late 2022 announced that it is expanding its investment and innovation incentive programs to include eligible lithium projects. The move is expected to accelerate the development of Saskatchewan’s lithium sector.
“We’ve seen now backing by the governments with not just changes in policy but also tens of billions of dollars invested in the supply chain for this critical mineral called lithium,” Hanson explains.
He also points out the need for investments in human capital to ensure lithium producers are supported in meeting the surge in demand and to make the most of this opportunity.
He notes that while historically there have been bottlenecks from a permitting standpoint, the permitting process should not be shortchanged.
“We need governments to invest in permitting offices and into the processes that allow for these projects to be given the green light, but the good news is we are seeing movement in that area,” Hanson says.
“In Manitoba, for example, it was announced this past fall that the permitting office is hiring 19 new people to assist with the red tape and to make sure things move along in an orderly fashion.”
Upcoming exploration milestones
In tandem with these investments in the broader lithium sector, ACME Lithium is set for an exciting few months ahead on the exploration front.
At its Clayton Valley project, the company is currently conducting a pump test to assess the hydraulic properties and brine chemistry of the lower gravel unit (LGU) as part of its Phase 2 expanded drill program at the property.
The LGU is an aquifer which returned lithium samples up to 130 milligrams per litre during the company’s Phase 1 exploration program.
The pump test is significant, as the results will be used as data for a future potential lithium resource at Clayton Valley, with Hanson noting it could be one of the company’s biggest milestones to date.
“We have commenced a lithium brine pump test at our TW-1 well and will have results coming out soon and look forward to providing that information to our investors over the next few months,” Hanson says.
ACME Lithium also continues to carry out exploration and development work across the rest of its portfolio, including exploration at its Saskatchewan project over the summer and into the fall.
“It’s a huge generational opportunity we’re seeing here for lithium,” concludes Hanson, “and ACME Lithium certainly hopes to be part of that.”
Contact the author at emily.jarvie@proactiveinvestors.com
Follow her on Twitter @emilyjjarvie