Using Fossil Fuel Infrastructure to Extract Green Lithium
LithiumBank Resources Corp. is an exploration and development company focused on the direct extraction of brine lithium resources in Western Canada.
The company plans to take advantage of Alberta's long history of fossil fuel production, to create a local source of “green” lithium in North America.
LithiumBank's most advanced project is the Sturgeon Lake Project, which contains a substantial lithium brine mineral resource estimate, well suited to a direct extraction method of production.
Sturgeon Lake is situated within a petroleum field that has operated since 1952, with low levels of production continuing to the present day.
The petroleum field contains 242 existing oil and gas wells, the majority of which are now suspended or inactive, but provide LithiumBank with a rapid and low-cost method to extract and sample the lithium-bearing brines that are naturally associated with the petroleum.
LithiumBank signed a brine access agreement with a major petro-operator in control of the Sturgeon Lake South and Sturgeon Lake North oilfields that allows it to use the existing oil and gas wells to sample the lithium-bearing brines. This has allowed the company to rapidly advance the project at a relatively low cost.
Having established a maiden total NI 43101 inferred mineral resource estimate of 5.97 million tonnes lithium carbonate equivalent (LCE) at a grade of 67 milligrams per litre (mg/l), the company plans to undertake additional sampling on other formations to increase the size of the resource estimate with an upgrade targeted for mid-2022.
Alongside this, LithiumBank is also preparing a preliminary economic assessment (PEA), which will give us our first indications of the potential economics around the project, for mid-2022.
In addition to Sturgeon Lake (563k acres), LithiumBank also has a very large portfolio of other lithium projects, with 2.35 million acres of permits in Alberta and 326 thousand acres in Saskatchewan, and is examining the potential of British Columbia. While these projects are earlier stage than Sturgeon Lake they will be advanced along with the flagship project.
LithiumBank is well funded having raised C$6.84 million at US$1.5 per share in October 2021.
What is direct extraction?
Direct extraction of lithium is unlike conventional brine processing in that it requires a much smaller footprint and doesn't rely on evaporation to concentrate the lithium-bearing minerals within the brine.
Direct extraction is a much faster method of lithium extraction and is currently being backed by many companies including mining major Rio Tinto.
Direct Lithium Extraction Brines (DLE)
Direct extraction of lithium from brines is very different to convectional mining operations. No excavators, trucks, explosives, crushing or communition circuits or tailings dams are used in the day-to-day running of the operation.
Instead, the lithium-bearing fluid (brine) is extracted from a reservoir using pumps and then processed in a water treatment plant to remove the lithium; once the lithium is extracted the brine can then be returned to the aquifer (Figure 1).
Figure 1 - DLE Process
Source: LithiumBank Resources Corp.
DLE operations are considered to be more environmentally favourable as they:
- Have a much smaller footprint (c. 0.5km2) than a hard rock or clay lithium mining operation (c. 5km2) and conventional brine operations that use solar evaporation ponds to extract the lithium, and cause disruption to the land over huge areas (c. 15km2).
- Do not change the chemistry of the brine, so it can be returned to the aquifer around 10km from the extraction site.
- Have the potential for carbon sequestration to reduce the carbon footprint of the operation.
DLE is effectively a tried and tested water treatment process that has now been adapted for lithium extraction, to selectively extract the lithium and produce a high-purity product. This process is much faster (hours) than conventional brine processing which can take around nine months for the chemical fractions within the brine to be gradually removed.
LithiumBank will be using a third party DLE technology to extract the lithium from the brine; Hatch Engineering has been engaged by LithiumBank to evaluate a number of DLE technologies.
Once the brine has been through the DLE process it is expected that the concentrate will undergo traditional processing such as polishing and electrolysis to produce a high-purity, battery-grade lithium hydroxide on site, as the end product (Figure 1).
Figure 2 - Alberta Projects
Source: LithiumBank Resources Corp.
LithiumBank Resources Corp.
LithiumBank Resources Corp. has over 2.82 million acres of permits located in Alberta Canada, close to the British Columbia border, and 326,000 acres in Saskatchewan (Figure 2).
The company's most advanced project is Sturgeon Lake, where a preliminary economic assessment (PEA) is currently being prepared for publication in mid-2022.
In addition to Sturgeon Lake, LithiumBank has seven other 100%-owned lithium-brine projects, located in west-central Alberta: Swan Hills; Kakwa; Valhalla; Valleyview; Fox Creek; Simonette; and Nipisi (Figure 2).
Sturgeon Lake
Sturgeon Lake is located in west-central Alberta, Canada (Figure 2), directly southwest of the town of Valleyview, about 85 km east of the city of Grande Prairie.
Figure 3 - Existing Wells
Source: LithiumBank Resources Corp.
The area contains a producing petroleum field (1952-present day) that contains 242 existing oil and gas wells (Figure 3) the majority of which are now suspended or inactive. These wells pumped the lithium-bearing brines from depths of more than 2,350 metres, as wastewater associated with hydrocarbon production.
The Sturgeon Lake Property consists of 28 Alberta Metallic and Industrial Mineral Permits that collectively form a contiguous package of land that totals 563,000 ha.
The permits give LithiumBank the exclusive right to explore for metallic and industrial minerals for seven consecutive two-year terms (total of 14 years), subject to the submission of biannual assessment work to keep the permits in good standing.
In May 2021, LithiumBank formed a brine access agreement with a major petro-operator in control of the Sturgeon Lake South and Sturgeon Lake North oilfields. Under this agreement, LithiumBank can obtain brine samples from the existing oil and gas infrastructure.
This agreement not only saves the company the significant costs associated with drilling and preparing wells, it also saves a huge amount of time, allowing the company to rapidly advance Sturgeon Lake up the development curve.
Mineral Resource Estimate
Sturgeon Lake currently has a total NI 43101 inferred mineral resource estimate of 5.97 million tonnes lithium carbonate equivalent (LCE) at a grade of 67mg/l. LithiumBank plans to undertake additional sampling from other formations to increase the size of the resource estimate with an upgrade targeted for mid-2022.
Figure 4 - Peer Group grade/tonnage
Source: MMRC
Figure 5 - Regional Lithium Targets
Source: LithiumBank Resources Corp.
Figure 6 - Saskatchewan Projects
Source: LithiumBank Resources Corp.
Figure 7 - BC Lithium Targets
Source: LithiumBank Resources Corp.
Geology
Sturgeon Lake's lithium-bearing brines and historic oil and gas reserves are/were hosted within the Late Devonian dolomitized reef structure of the Woodbend Group, Leduc Formation, that conformably overlies the carbonates of the Beaverhill Lake Group.
The Woodbend Group is dominated by basin siltstone, shale, and carbonates, which surround and cap the Leduc Formation reef complexes. The reef complex at Sturgeon Lake has been defined to a depth between 2,337.6 metres and 3,050.6 metres below the surface and has a width between 230 metres to 380 metres.
These aquifers have displayed a long history of consistent fluid yields from oil and gas exploration and production, giving LithiumBank a high-confidence level in the ability to extract lithium-bearing brines from the aquifers.
Infrastructure
Sturgeon Lake Project benefits from 70 years’ worth of infrastructure upgrades including major and secondary highways and power lines associated with the development of the town of Valleyview and the energy resource sector.
The current energy resource-related infrastructure provides sufficient power and transportation connections throughout the entire Sturgeon Lake oil and gas field, including wells, pipelines, and plant facilities that are networked throughout the area.
DLE Peer Group
There are currently 13 companies we know of that are examining the potential of using DLE as a way of extracting lithium minerals from brines and seven of these are operating in Western Canada. These 13 companies range in development stages from pre-resource to preliminary feasibility studies (PFS).
These companies range in size from mining major Rio Tinto, which is in the process of acquiring private DLE company Rincon Mining for US$825 million to juniors such as E3 Metals Corp (TSX-V:ETMC) and Standard Lithium.
Of those companies that have completed initial economic studies, some plan to produce lithium carbonate while others are focused on lithium hydroxide products.
Compared to the other eight post-resource stage DLE projects, Sturgeon Lake is a large deposit that sits towards the lower end of the grade curve (Figure 4).
Of the six projects that have completed an economic study of some form (SS, PEA, or PFS) the post-tax NPV8 (net present value using an 8% discount rate) range from US$2.2 billion to US$748 million and the post-tax internal rates of return (IRRs) range from 22% to 36%.
The capital expenditure (capex) of these projects ranges from US$1.2 billion to US$437 million with operating expenditure (opex) figures that range from US$2,599 per tonne to US$4,178 per tonne.
All the proposed operations will be long life, with a range of 20-40 years and annual production levels of 20,000 tonnes to 50,000 tonnes. As a result, capex intensities range from US$1,450 per tonne of product to US$385/t.
Regional Alberta Potential
LihtiumBank holds 2.257 million acres in Alberta in addition to its Sturgeon Lake holding (563k acres). Historical work has suggested that the geographic extent of Li-rich formation water in west-central Alberta could cover around 75 000 km2 at prospective depths of between 2,700 metres and 4,000 metres.
LithiumBank has selected its regional projects (Figure 5) as they all fit the company's mandate of containing highly porous carbonate rock with a high transmissivity and have well-established oil and gas infrastructure.
Saskatchewan
LithiumBank successfully bid for and was awarded over 326 thousand acres in southern Saskatchewan (Figure 6). The company is currently evaluating these properties with a view to commencing exploration in the first quarter (Q1) of 2022.
British Columbia
LithiumBank has also signed a research collaboration with Geoscience BC, Natural Resources Canada, and Northern Development. The NEBC Lithium Formation Water Database Project will assess concentrations of lithium in brines contained within British Columbia (Figure 7) by taking samples from existing oil and gas wells.
A team from Canadian Discovery and Matrix Solutions has already prioritised a list of existing natural gas wells and is discussing access and sampling with operators. Communities and indigenous groups in the region have been informed and encouraged to provide feedback on the project.
The project team plans to collect hundreds of samples from up to 12 different subsurface formations. The samples will be analysed before producing a database and suite of maps for the sampled formations, including lithium concentration maps.
The initial data from hundreds of wells is expected to be received in the first half of 2022. LithiumBank receives first look rights along with the operators for six months prior to Geoscience BC being able to publish the data.