The Democratic Republic of Congo (DRC) is rich ground for lithium, a metal that is in increasing demand as the electric vehicle (EV) revolution gains traction.
As automakers including Stellantis and Ford announce aggressive production plans, demand for the metal that is a key component in EV batteries is likely to grow exponentially, resulting in a potential supply deficit by 2025.
By 2030, global demand for lithium is forecast to surpass two million metric tons of lithium carbonate equivalent, more than doubling the demand forecast for 2025, according to market data specialist Statista. Increased battery demand for electric vehicles is expected to be the main driver of lithium consumption in the next decade.
With a long history in the DRC and deep knowledge of its mining sector, exploration company AJN Resources Inc (CSE:AJN) is in a prime position to take advantage of the expected demand for the metal.
The company has staked out some of the country’s potentially most lucrative lithium deposits in the Eastern DRC.
“We started looking for projects in the Congo more than three years ago,” director and CFO Mark Gasson told Proactive.
“We signed an agreement with the state which outlined a new model for Congo. The idea was that the state would transfer 21 gold licences and one lithium license, the extension of the Manono pegmatites, into a local subsidiary, Congo Resources. AJN would acquire 100% of Congo Resources and the state would receive 60% of AJN's share capital.”
While the agreement with the DRC government has stalled, AJN’s own progress hasn’t.
On-the-ground knowledge
Gasson, a geologist with 33 years of experience, has been active in South Africa, Tanzania and the DRC since 1986 in gold and base metals exploration and resource development.
AJN CEO Klaus Eckoff, also a geologist, has been active in the DRC for about 25 years. He spearheaded AVZ Mineral’s acquisition of the world-class Manono lithium project in 2017, right next to where AJN has acquired a number of licenses on spodumene-rich ground, with plans for further consolidation.
“Klaus and I have a long history in Congo, where Klaus started off with Kibaliand discovered 20 million ounces of gold. We then discovered one million tonnes of copper at Kipoi with Tiger Resources followed by Alphamin's Bisie tin project, which is now a billion-dollar company with the highest grade tin mine in the world,” Gasson said.
“Due to delays from the State we decided it was time to go and find something else for AJN and we focused on lithium, simply because we know the lithium space very well.”
AJN’s prospective lithium projects in Eastern DRC are focused within a 500-kilometre zone roughly 120 kilometres wide, which goes from Katanga in the south of the country all the way up to Kalemie on Lake Tanganyika.
Most of the fieldwork so far has centred on the Kabunda South project, where a reconnaissance mapping and sampling program has revealed Spodumene within pegmatites visually identified across the full seven-kilometer (km) strike extent of the permit.
“We are in the process of sorting out our permitting for drilling at Kabunda and hope to be on-site within a month, and drilling at the latest by the end of October,” Gasson said.
New licenses
Two more recently acquired licenses are on the Manono trend where AVZ Minerals defined 401 million tonnes grading 1.65% Li2O (lithium dioxide) at its Roche Dure prospect.
AJN has entered an option to acquire up to a 70% indirect interest in the lithium exploration permit PR 14537, which borders the recently optioned PR 15282 exploration property to the west and potentially covers four kilometres of a second pegmatite interpreted to crosscut the central licence area.
By conducting shallow drilling programs, it hopes to identify the extension of the Manono pegmatites onto both licences under agreement.
“It's interpreted that there are two pegmatites: one follows the granite contact, which runs all the way onto the PR 15282 license and the second interpreted pegmatite, has more of a northerly trend and that continues onto the latest acquisition, PR 14537.”
Gasson noted that AJN has both trends covered with the new licenses, with the possibility of acquiring an additional license between Manono and PR 14537.
Additionally, if the deal with the State and Congo Resources proceeds, he said AJN could tie up the whole northern extension of the Manono pegmatites.
In the meantime, the company is organizing drilling permits for the new license areas to carry out shallow RC drilling to identify the occurrence of pegmatites within the project areas.
To date, capital outlay has been minimal and the company has funds available as it prepares to get the drills turning at Kabunda South and the new Manono licenses.
“The cost of operating in that part of the world is not very high,” Gasson said.
“Also, being pegmatites, you don't need the close-spaced drilling that you would have with a gold project, for example. We will be doing broad-spaced drilling, understand what we have, and could define a resource within six months of drilling those main targets. They are top-quality projects and operating in that area is pretty reasonable compared to other areas in the Congo.”
Attractive proposition
With a huge appetite for new projects in the DRC, Gasson said exploration success with its projects is likely to attract attention, particularly from Chinese investors and lithium producers in the region who are trying to buy up as much prospective ground as possible.
“Congo is one of the countries where you have exceptional deposits and Manono is an excellent example,” he said.
“The infrastructure is already improving as a result of the earlier discoveries. I think it’s just a matter of time before there’s going to be a big acquisition drive for the bigger companies and we are in a prime position to be noticed.”
Attracting attention from larger players with deep pockets is part of AJN’s strategy. It takes projects up to the feasibility stage before bringing on a strategic partner to help fund development.
Apart from the lucrative licenses, Gasson said AJN’s on-the-ground knowledge and early mover advantage also work in its favour.
“We have a very big advantage, simply because both Klaus and myself have kept very good contacts with all the authorities; everybody knows who we are,” he said.
“At least one of us travels to Congo every two to three months, just to make sure that people know who we are. You have to show a presence to gain trust; you can't just operate remotely.”
Contact the author at stephen.gunnion@proactiveinvestors.com