The Energy Report - Thu, Mar 30, 2017

Millennial Lithium's Exploration Progressing Rapidly in the Lithium Triangle

Millennial Lithium, which closed a private placement of nearly $6 million and is resuming drilling at Pastos Grandes in Argentina, has set its sights on producing lithium within three years as lithium demand is projected to skyrocket.

Millennial Lithium Project Map

Millennial Lithium Corp.'s (ML:TSX.V; MLNLF:OTCQB) announcement on March 27 that it has closed a private placement of nearly $6 million and is commencing phase 2 drilling at Pastos Grandes in Argentina demonstrates that the company is moving ahead rapidly on the project. The company reported that "Montgomery and Associates has designed a program that includes 11 additional drill sites to define the resource. . .the holes will be drilled to 400 meters or deeper based on drilling conditions and brine content."

The company also stated that "all of the resource definition holes will be completed as monitoring wells. Selected sites will be drilled with larger bores suitable for construction of production scale wells, initial pumping tests, and for NI 43-101 resource compliance."

Kyle Stevenson, president of Millennial Lithium, told The Energy Report that the company is "focused on proving up a 43-101 resource at Pastos Grandes by the end of second quarter of this year. Once the 43-101 is completed we expect to have our Preliminary Economic Assessment done shortly after, by mid-summer. We are focused on being in production in three years."

Millennial Lithium is also moving rapidly to drill three other high-impact exploration projects, Cauchari East, Cruz and Pocitos West. Stevenson noted that "the Cauchari East Project is contiguous to Lithium Americas Cauchari Project and Orocobre's Olaroz Project. The Cruz Project is at the north end of the Pocitos Salar; recent geophysics show a large brine target extending to at least 250m."

The company announced on Mar. 30 that it has made the initial payment under its option to acquire 100% interest in the Pocitos West project, located in Argentina's Pocitos Salar. According to Millennial Lithium, "Pocitos West is adjacent to ground recently acquired by Pure Energy Minerals Ltd. and is strategically located in close proximity to known lithium resources including the Rincon Project located 32km to the north and the Sal De Vida Project 90km to the south."

Millennial Lithium's projects are all located in the "Lithium Triangle," the lithium-rich area where the countries of Argentina, Chile and Bolivia meet.

Lithium demand is expected to rise at a fast rate. Morningstar, in a January 2017 report, forecasted "16% annual lithium demand growth over the next decade, faster than we've witnessed for almost any major commodity over the past century. We project 2025 lithium demand at 775,000 tonnes, well above the consensus outlook for 400,000-600,000 tonnes. To encourage sufficient supply, lithium carbonate prices would need to rise more than 40% to $10,000 per tonne from current levels of roughly $7,000 per tonne."

Dr. David Deak, CTO and Senior Vice President of Lithium Americas and President of Lithium Nevada Corp., in his keynote speech at the Cormark Securities 2017 Battery Value Chain Conference in Toronto on January 25, noted that within about five years, Tesla and VW alone "will be on target to produce 3-4 million EVs [electric vehicles], with 3-4 supporting Gigafactories worth of battery production. The lithium required for this kind of market is double what is produced by the lithium market today." He noted that this does not take into account the demands of "Ford, Daimler, Volvo, BMW, Faraday Future, Lucid, Apple, or the colossal demands of China."

"The rise of lithium," stated Deak, "means taking today's market size and multiplying it by 20. This is going to require about 60 to 100 new lithium mines to be built, starting now, and operating for +20 years."

Investment advisor Matt Bohlsen, writing in Seeking Alpha, noted that Benchmark Mineral Intelligence forecasts lithium-ion megafactories in China "to grow capacity by about 6x (actually 521%) between 2016 and 2020. This is very close to my latest forecasts, which have lithium demand for electric vehicles (EVs) growing by 5x by end 2020." Bohlsen also noted that "Benchmark forecasts by 2020, 62% of lithium-ion battery production will be in China, followed by 22% in the USA, and 13% in South Korea."

Millennial Lithium's Kyle Stevenson told The Energy Report that company officials "recently completed a trip through Asia and have signed multiple NDAs with end users who are eager to secure a supply of lithium."

1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Millennial Lithium Corp. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor's fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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