Phase 1 Lithium Exploration Commences Near Quebecs High-Potential Tansim Project

Source: Streetwise Reports 11/27/2024

American Salars Lithium Inc. (USLI:CSE; USLIF:OTC; Z3P:FWB; A3E2NY:WKN) has commenced its Phase 1 exploration program at the 3,958-acre Lac Simard Lithium Project in Quebec, Canada. Read more about the Phase 1 program targeting pegmatite-rich claims near Quebec’s lithium hub.

American Salars Lithium Inc. (USLI:CSE; USLIF:OTC; Z3P:FWB; A3E2NY:WKN) has commenced its Phase 1 exploration program at the 3,958-acre Lac Simard Lithium Project in Quebec, Canada. This property is wholly owned by American Salars and lies adjacent to Sayona Mining Limited’s (ASX: SYA) Tansim Project, a site estimated to host between 5 and 25 million tons of lithium oxide (Li₂O) at grades of 1.2% to 1.3%.

The Phase 1 program focuses on the Lac Simard Nord block, with immediate fieldwork including reconnaissance, mapping, and sampling for pegmatite outcrops and high-priority targets. The exploration effort is in proximity to Sayona’s Viau-Dallaire and Viau lithium showings and approximately 1 kilometer from Refined Metals’ Ile du Refuge lithium showing, which reported results of 5.8% tantalum pentoxide (Ta₂O₅) and 83% uranium oxide (U₃O₈).

Nick Horsley, CEO and Director of American Salars, pointed to the strategic value of the Lac Simard Nord claims in the company news release, stating, “We’re moving forward quickly with our Phase 1 exploration program with immediate boots on the ground. The plan is to locate and sample potential Pegmatite outcrops and high-priority targets for a future Phase 2 program. The properties are located inside Sayona’s Tansim Project next to the Viau-Dallaire/Viau lithium showings. The recent merger of Sayona and Piedmont and the acquisition by Rio Tinto of Arcadium show there remains a strong appetite for M&A in the lithium space. We will continue to identify low-cost strategic acquisitions in the Lithium space, with our long-term thesis remaining the development of our NI 43-101 Lithium Brine Resources in Argentina.”

The Lac Simard Nord project benefits from geological similarities to nearby operations in the Abitibi Hub, which includes Sayona’s North American Lithium Mine, Authier Lithium, and Tansim lithium projects. The hub boasts a measured and indicated resource of 111 million tonnes grading 1.14% lithium, supported by an operating lithium concentrator and plans for a conversion plant. This infrastructure reduces capital and processing expenses for local operators, positioning the region as a lower-cost alternative to James Bay.

Why Invest In Lithium Mining?

On November 4, Carbon Credits emphasized the lithium market’s challenges with declining prices and weaker demand. The report noted that lithium carbonate prices had dropped to around US$10,000 per metric ton in October due to oversupply and seasonal demand fluctuations. However, the long-term outlook remained optimistic, with projected price recovery tied to the anticipated surge in electric vehicle (EV) adoption and renewable energy requirements. Benchmark data indicated that direct lithium extraction (DLE) technology could contribute 14% of the global lithium supply by 2035, highlighting its potential to unlock reserves previously considered difficult to exploit.

According to Alex Koyfman, writing for Energy and Capital on November 6, the U.S. faced a significant strategic disadvantage in lithium production, contributing only 1% of the global supply despite being the largest consumer of lithium-ion batteries. Koyfman highlighted the growing need for domestic lithium development, stating that “Trump’s America-centric ideologies promote the development of domestic lithium and lithium battery production” to reduce reliance on geopolitical rivals like China.

By November 18, The Daily Climate reported on the rise of lithium iron phosphate (LFP) batteries, which offered cost and sustainability benefits over traditional options. Klaus Rehkugler, head of sales and marketing at Mercedes-Benz Vans, stated that “cell degradation is lower than other batteries, ensuring durability and low maintenance requirements,” making LFP batteries ideal for light commercial vehicles. This shift in battery technology reflected broader efforts to make EV production more cost-effective and environmentally friendly.

Finally, on November 19, 2024, Mack DeGeurin, writing for Popular Science, addressed the increasing demand for critical minerals like lithium, with global consumption projected to grow 400-600% in the coming decades. DeGeurin noted that a single Tesla Model S required as much lithium as approximately 10,000 iPhones, underlining the scale of demand driven by the EV market. The International Energy Agency forecasted that the world would need ten times as much lithium by 2050 to meet renewable energy goals.

As Fastmarkets reported on November 27, the lithium-ion battery recycling sector faced economic challenges amid falling lithium carbonate prices, which averaged US$10.56-11.33 per kilogram in November, down sharply from the previous year. Despite these headwinds, significant growth in battery recycling was anticipated, with European scrap battery volumes forecast to rise from 96,000 tonnes in 2024 to 252,000 tonnes by 2029. Companies like Ecobat and SungEel HiTech announced plans to expand capacity in Europe, signaling confidence in long-term demand. SungEel, for instance, highlighted its need to establish hydrometallurgical post-treatment plants in Europe due to impending regulatory restrictions on black mass exports.

That same day, Allied Analytics reported that the global lithium-ion battery recycling market was projected to grow at a compound annual growth rate of 36%, reaching US$38.21 billion by 2030. The report noted that recycling offered a sustainable way to recover valuable materials, reducing reliance on mining and mitigating environmental risks. Asia-Pacific was expected to lead growth in this sector, while Europe remained dominant with a 35.7% revenue share in 2020. Key drivers included the rising adoption of electric vehicles and renewable energy storage solutions, highlighting the critical role of lithium recycling in supporting global energy transitions.

The Catalysts Driving American Salars Lithium

The Lac Simard Nord claims are strategically situated within Sayona’s Tansim Project, providing American Salars a foothold in a high-potential lithium-producing region. The proximity to established lithium infrastructure in the Abitibi Hub further enhances the project’s economic prospects by leveraging existing processing facilities and planned expansions.

Phase 1 exploration is designed to quickly identify pegmatite targets, with data informing a more detailed Phase 2 program. According to American Salars’s August 2024 investor presentation, this phased approach aims to maximize value with minimal upfront expenditure. [OWNERSHIP_CHART-11095]

The recent Sayona-Piedmont merger and Rio Tinto’s acquisition of Arcadium highlight the growing interest in Quebec’s lithium sector. American Salars is well-positioned to attract attention from potential partners or acquirers. The company’s management also noted a long-term strategy to pursue low-cost strategic acquisitions to complement its existing portfolio. This is in line with the company’s stated commitment to capitalizing on lithium market trends.

Ownership and Share Structure

American Salars said it has 28.8 million shares outstanding and 5.5 million warrants, according to the company.

As for insiders, the CEO Horsley owns about 1.83 million, or about 7.37%, with 4666,666 warrants. Strategic investor Hillcrest Merchant Partners owns 1 million shares or 4.03%. There are no institutional investors, and the rest is retail.

Its market cap is CA$2.01 million. It trades in a 52-week range of CA$0.45 and CA$0.06.

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Important Disclosures:

1. American Salars Lithium Inc. has a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of American Salars Lithium Inc.
3. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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( Companies Mentioned: USLI:CSE; USLIF:OTC; Z3P:FWB; A3E2NY:WKN, )

Source: https://www.streetwisereports.com/article/2024/11/27/phase-1-lithium-exploration-commences-near-quebecs-high-potential-tansim-project.html