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Nevada's clay deposits play key role for domestic lithium supply: Cypress executive

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Nevada's clay deposits play key role for domestic lithium supply: Cypress executive

Highlights

Lack of interest prevented prior production in region

Existing technologies prove viable for clay samples

  • Author
  • Nick Lazzaro
  • Editor
  • Aastha Agnihotri
  • Commodity
  • Electric Power Metals

Nevada's clay deposits have always hosted significant lithium resources that could bolster domestic supply in North America, but many project developers have only recently begun to seriously consider the region's potential over the last decade, a senior executive at Cypress Development said.

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"The reason it's not in production [lithium assets in Nevada] is because there was no necessity for it," Spiros Cacos, vice president of investor relations with Cypress Development, said during a virtual presentation to investors Sept. 22 hosted by Torrey Hills Capital. "The price of lithium was nothing ten years ago."

Cacos said established lithium operations in Australia and Latin America have been in production for decades, mostly supplying a China-centric market, but the US and Canada "fell asleep at the wheel."

"We were just not focusing on that, and now we have put ourselves into a position where we are dependent on foreign energy," he added, noting that China accounts for about 80% of global lithium consumption and owns about 85% of the world's current lithium supply "directly or indirectly."

Historically, since there has not been much interest in Nevada's lithium clay resources, Cacos said this has caused a belief that production in the region is not viable compared with spodumene or brine projects in other parts of the world.

"There are currently no clay projects in production, so people think there is something wrong," he said. "But the reason there is no claystone projects in production is because clay projects predominantly occur in the United States, but there hasn't been a push to find lithium in the United States until quite recently."

Additionally, Cacos said there is a misconception that the direct lithium extraction technologies being employed by Cypress and other companies on Nevada clay samples are new and unproven.

"We haven't reinvented or invented anything else," he added. "We are doing something which has always been done and has been around for a hundred years."

The Vancouver, British Columbia-based Cypress recently achieved the production of lithium carbonate samples with 99.94% purity through the processing of claystone at its Clayton Valley Lithium Project in Nevada.

Cacos said the 99.94% purity represents an enhanced grade that exceeds the minimum 99.5% standard for electric vehicle battery qualification, and it allows the company's lithium to be considered for a broader range of EV applications.

Lithium rush

Cacos said Cypress acquired its Nevada project in 2015 as interest in domestic lithium was beginning to accelerate.

Cypress is targeting lithium carbonate equivalent production of 27,400 mt/year over a 40-year mine life at the Nevada site.

From 2015 to 2018, other companies also began to take ownership of potential lithium assets in North America and consider development plans before lithium prices lost momentum and projects were shelved.

The Platts assessment for lithium carbonate reached as high as $18,000/mt in 2018, on a CIF North Asia basis, before steadily declining and bottoming out at $6,300/mt in 2020, according to S&P Global Commodity Insights data.

Interest in North American lithium projects has since resurfaced as prices have surged, with the Platts lithium carbonate price reaching nearly $80,000 mt/year in April this year.