Elon Musk wants to mine his own lithium, but investors are looking at the early entrants that have already started drilling with impressive results.
No earthly metal is more of a security concern right now than lithium. This ‘white gold’ underpins the entire clean energy transition, which has now become even more urgent as a Russian war on Ukraine exposes the severe vulnerability of fossil fuels to supply risks.
There is no energy transition without lithium, the battery metal that serves as the backbone of the trillion-dollar EV industry–an industry on track to top $1.3 trillion in just a few years.
As long as it has enough lithium …
Battery makers are sounding the alarm bells as they face shortages and call on governments worldwide to challenge China’s dominance of the raw material supply chain.
North America is playing catch-up here, but the urgency has now become palpable. Last week, U.S. President Joe Biden invoked the Defense Production Act to encourage mining for battery metals. Lithium is also on Canada’s critical minerals list.
That’s the perfect setup for new lithium explorers.
But exploration and development takes time, and investors will be looking for the earliest entrants who promise the fastest and biggest impact on new lithium supply.
Canadian EMP Metals Corp (CSE:EMPS) (OTC:EMPPF) is one early entrant that seems to be on track to become a leading lithium producer in Canada’s prolific Saskatchewan region. This is one of the clearest new beneficiaries of the aggressive push to get new lithium supplies to the market.
EMP is focused on large-scale, direct lithium extraction (DLE) assets, boasting over 200,000 acres in prime southeast Saskatchewan, the hotspot for lithium exploration in Canada, with 21 lithium-brine permits in four main distinct geological locations.
The company has already successfully completed one well re-entry, and lithium test results were excellent, confirming high flow rates and strong lithium brine concentrations .
What comes next?
This is the defining year for EMP, with 3-5 new wells or re-entries planned in an aggressive drill campaign that intends to harness North America’s massive push for new lithium resources.
There has never been a more aggressive push for a critical metal than this, and the earlier entrants with the drill bit already in the ground will be at the forefront of the next wave of lithium millionaires and billionaires.
One of North America’s Most Important New Lithium Hubs
Canada’s Saskatchewan region has jumped on the lithium bandwagon with plans not just to mine new lithium supplies and help challenge China’s dominance, but to become one of the most important lithium hubs in North America, if not the world.
The provincial government is targeting the development of both lithium exploration and extraction technologies, and it is funding programs for miners to take advantage.
Lithium would add to the province’s already impressive lineup of critical minerals, including uranium, potash and helium.
It’s a region known to be rich in lithium, graphite, nickel, cobalt, aluminum and manganese.
That makes it the perfect hub for battery metals, at the perfect time.
For prospective lithium miners in Saskatchewan, the main geological layer of interest is the lithium-bearing Duperow formation.
The Duperow formation, which extends from Montana and North Dakota to Saskatchewan, has already seen wild success for petroleum explorers. This is exactly where EMP has acquired over 200,000 acres, with private land acquisitions still moving forward.
While the formation is laterally equivalent to the lithium-bearing Leduc formation of the Alberta basin, the Duperow has some distinct advantages, not the least of which is the fact that there are significantly higher grades of lithium being discovered in the Duperow.
The Duperow is a regionally extensive reservoir with aquifer support and the potential for less injection dilution, higher recoveries and longer project life. This formation also tends towards lower sour gas concentrations and shallower drilling depth than the Leduc.
That means potentially very attractive margins for EMP once it delineates a resource.
Impressive Results on Maiden Drill
EMP has already completed one re-entry well showing high-grade levels of lithium.
In one zone, initial showings were for 85mg/L, and in two additional zones indications were of up to 96.3mg/L.
Against the backdrop of a growing sense of urgency on a national security level, EMP plans to attack exploration over the coming months very aggressively, with plans to drill up to 5 new wells or re-entries in targeted areas this year.
And they’re doing it with a focus on DLE (direct lithium extraction), a lithium extraction process that reduces the environmental footprint by 90% compared to traditional methods. DLE is a process that employs a highly selective absorbent to extract lithium from brine water using geothermal or renewable energy sources.
Not only is most of North America’s lithium imported and sourced from South America and China …
But that lithium is processed from open-pit mines or saltwater flats from which it is pumped into huge basins to evaporate by the sun. Both open-pit mining and brine mining leave troubling environmental footprints, either by destroying the land, contaminating water or contributing to drought.
EMP is an ESG company, all the way.
It plans on using DLE methods that will provide for a more sustainable lithium supply. What makes it so much more sustainable is that it seeks to extract the lithium before the brine is pumped back underground.
With ESG a clear focus and up to 5 new wells or re-entries planned for this year, we expect the news flow to be fast-paced in line with today’s constant barrage of appeals from giant automakers and battery gigafactories.
Billions Being Poured into Batteries
North America is fast becoming a mega-center for EV and energy storage batteries–the lynchpin of our clean energy future.
In the United States, 13 gigafactories are in the works, almost all of them slated to be operational by 2025.
They will require an enormous amount of raw materials, and everything depends on new lithium discovery and development.
Canada, too, is seeing an aggressive push into this domain.
Just recently, LG Energy Solutions announced a $5-billion EV battery plant in Ontario in partnership with Stellantis, and giant GM agreed to build a $500-million factory in Quebec to manufacture integral components of EV batteries.
At its current pace, supply simply cannot meet soaring demand.
By 2025, that demand will be out of this world.
Everyone Wants Lithium and Relationships Are Key
Car-makers and battery makers around the world are scouring the planet for more lithium supply and scrambling to secure off-take deals.
EMP is a team of veterans who already have key relationships with developers up and down the EV and battery supply chain–all of them will require major lithium resources.
EMP’s President, CEO and Director, Rob Gamley, is a finance and capital markets veteran, supported by an exploration and development team that has experience with the biggest names in the business, including American Lithium Corp.
The operational team has been running large oilfield brine lifting operations in southeast Saskatchewan since 2001. Cam Taylor, Bryden Wright and Jared Lukomski are all former senior management from Villanova 4 Oil Corp. and collectively have decades of experience in Saskatchewan’s Williston Basin building large scale brine lifting and disposal infrastructure as well as drilling wells to all depths within the basin.
Peter Polland, Ph.D., is EMP’s chief geologist and director with over 30 years mineral exploration experience, while Advisor Mike Kobler is the former present and current general manager of U.S. operations for American Lithium Corp. He’s responsible for advancing the company’s TLC lithium project in Nevada–the only place in the United States where lithium is produced.
Advisor Brian Balazs also has more than three decades of experience in oil and gas exploration and development in western Canada and around the world, as does Director Greg Bronson.
This is a team that has the necessary experience and industry relationships to move fast on its Saskatchewan drilling and bring this to the finish line at the height of a lithium supply frenzy.
Everyone Wants Lithium
The land rush for North American lithium started a few years back when the first alarm bells started sounding with respect to a future supply shortage. For investors, that earlier rush was premature. The timing wasn’t quite right. It left new lithium entrants without enough funding to see their projects through because the “shortage” was still a few years off.
Several years have passed since that initial false start. In addition, the COVID-19 pandemic and now Russia’s war on Ukraine have sped up the clean energy transition exponentially, and market conditions are now fully on board with new lithium exploration and development.
While it’s still a crowded space, with all kinds of junior miners trying to get in on the coming largesse, investors are looking for earlier entrants with the right management teams–that’s what makes or breaks a new lithium project.
EMP ticks all of those boxes, with a lineup of world-class geologists with specific lithium experience in North America, and capital markets experts who have closed all the right deals.
This is all going down in Canada’s new “lithium hub” in Saskatchewan, where EMP has been busy scooping up acreage that is surrounded by infrastructure in a basin that is already showing high grades high-grade lithium.
The drill bit is already in the ground on this one and first results are already in. Up to five more wells or re-entires are planned this year, making this a fast-moving lithium play that is more likely to start pinging investor radar than some of its peers.
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