America’s lofty electric vehicle (EV) sales goals may not be as far-fetched as initially thought now that the US government has stepped in with some serious cash.
The Biden Administration is on the hunt for domestic lithium sources to feed the nation’s thriving EV and battery market and is committing $700 million to ioneer’s Rhyolite Ridge Lithium-Boron Project a lithium mine in Nevada.
The Rhyolite Ridge Lithium-Boron Project, which is one of only a handful of lithium mining developments in the US, is a prospective supplier to Ford Motor and Toyota that could produce enough lithium for 370,000 EVs a year.1
Of course, this isn’t the US government’s first step towards meeting these goals. In August, the US Department of Energy (DOE) earmarked US$675 million to expand domestic critical materials supply chains2 and another US$12 million to help shore up a domestic supply of battery-grade lithium.3
Once Ioneer Ltd. gets US approvals, it expects to begin construction at the Rhyolite Ridge Lithium-Boron project in 2024.
In the meantime, the only active lithium mine in the US is Albemarle’s Silver Peak, also located in Nevada. Silver Peak is undergoing expansions and is expected to double its production from 6,000 tonnes per year of LCE to 12,000 tonnes in the near future, but more domestic supply is needed to meet ever-rising demand.
Fortunately, a well-financed junior called Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) is developing its high-grade Zeus lithium project that is located within 1 mile to Silver Peak. The Zeus project already has a robust Preliminary Economic Assessment (PEA) in place,4 which is a crucial analysis of the potential viability of mineral resources at the mining project and is advancing towards a Pre-Feasibility Study.
The results of the PEA were very promising, revealing an after-tax NPV(8%) US$2.67 billion, an IRR of 52%, a CAPEX of US$528 million, and over a 40-year life of mine (LOM), using US$14,250/tonne LCE establishing Noram among limited peers as the newest low-cost, high-grade, near-term lithium producer in North America.5
Breaking News
7 Reasons
Investors Should Strongly Consider Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF)
1
ROBUST PEA (After-Tax) in Place for ZEUS Lithium Project: Through the Zeus Project, Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) has set up a shallow, low-cost sedimentary extraction operation that takes advantage of minimal crushing/grinding requirements, a low stripping ratio, that can scale to support a long mine life. The PEA highlights an after-tax NPV(8%) US$2.67B, an IRR of 52%, a CAPEX of US$528M, and over a 40-year life of mine (LOM). This calculation uses a modeled lithium carbonate equivalent (LCE) of US$14,250/tonne, well below the long-term forecasted price and the current price.
2
Solid 43-101 Resource (LCE) in Place: 1.78 MT Measured & Indicated with 3.89 MT Inferred of Lithium Carbonate Equivalent (“LCE”). Noram Lithium completed a very successful drill program in 2022, which based on the announced results, should significantly increase the Measured & Indicated tonnage in the planned mineral resource update. For reference the entire country of Canada has an estimated 2.9 million tonnes of lithium resources (measured & indicated inclusive of reserves).6
3
Top Ranked Mining Jurisdiction: Nevada is consistently ranked among the top mining jurisdictions in the world, recently being ranked #1 by the Fraser Institute in 2020, and #3 in 2021.7 By setting up in a globally-recognized mining jurisdiction, Noram Lithium is incredibly well-positioned ahead of the current ‘Lithium Supercycle’. The Zeus project is located next to a paved highway, with power lines running through the middle of its project, and adjacent to the ONLY currently producing lithium operation in the USA.
4
Optimal Timing Within Global Lithium Scramble: With the lithium market predicted to remain in structural shortage until 2025,8 and shocking acute lithium shortages forecast by 20359 Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) is strategically positioned with great timing ahead of the perfect storm for an emerging ‘Lithium Supercycle’.10
5
Well Funded: With ~$15.3 million (as at October 31, 2022), Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) is well-funded with no debt, and a low burn rate. The company is advancing towards the pre-feasibility stage and its 6th Resource Model update pending. The company is well funded to advance towards a Feasibility Study, which is the single most important study in the industry for any company, with no additional dilution anticipated until ~2024.
6
Favorable Share Structure and Stakeholder Make-Up: Among the shareholder make-up of the company’s outstanding shares, ~12% of issued shares are held by Management, and ~16% strategic investment put in place in Q1 2022. As it stands, the company has less than 90 million shares issued, with significant re-rate upside as it pushes to complete two of its biggest catalysts.
7
Expert Leadership Team: Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) has a highly-capable team that includes resource industry experts, with international mining experience in engineering, geology, and capital markets including newly appointed CEO Greg McCunn who brings 30 years of experience in mining leading companies like Galiano Gold, and Alio Gold;11 and Marcus Tomlinson, a technical expert that has over 30 years of experience in metallurgical process development, engineering and operations support. His experience includes providing technical services for Goldcorp, Barrick Gold, and Newmont.12
Global Scramble for Lithium Assets Firmly Underway, Amid Increasing Demand
If the USA wants to achieve its ambitious climate goals, it’s going to need all hands on deck. The White House has committed to deploying $3 billion to boost domestic production of EV batteries and the minerals that make them.13
Tesla announced plans in October to build a lithium refinery on Texas’ Gulf Coast to help supply his company’s Gigafactory in Nevada.14
But the USA isn’t alone in working to ramp up its capabilities. Since 2010, lithium consumption has quadrupled.15
Situated in the same state as both the Tesla Gigafactory and the only lithium mine currently producing in the USA, Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) and its Zeus Lithium Project are in the eye of the storm. With its PEA in place, and an all-important Pre-Feasibility Study16 on the horizon, Noram’s future looks very bright indeed. No better time to take a look at this developing story as they push aggressively to their potentially biggest year in their corporate history.
Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) is Adjacent to the Only Lithium Producer in the USA
In the United States in early 2021, the then-Trump administration approved plans for a $1 billion open-pit mine at Nevada’s Thacker Pass. The project is expected to receive all final permits in early 2023 and be well into construction soon after in Nevada.
Right now, the USA’s only producing mine is the Silver Peak mine, owned and operated by Albemarle.
Within Albemarle’s latest Q3 2022 financials, the company stated that new wells and expansion projects at Silver Peak continue to progress ahead of schedule, where the mine is expected to double production in the very near future from 6,000 tonnes per year of LCE to 12,000 tonnes. Of note, Noram Lithium’s Zeus project highlights close to 32,000 tonnes per year when it gets into production with a mine life of 40 years.17
Noram Lithium Corp.’s (TSXV:NRM) (OTCQB:NRVTF) Zeus Lithium Project claims are located within just 1-mile of Albemarle’s lithium brine operations.18 Noram’s land position in Clayton Valley, Nevada, consists of 146 placer claims and 136 lode claims, covering 1,133 hectares (2,800 acres).
Press Releases
- Noram Lithium Appoints New Chief Executive Officer to Lead Next Stages of Development of Zeus
- Noram Highlights Milestones During 2022
- Noram Announces Strategic Addition To The Advisory Board; Pre-Feasibility Study In Final Stages
- Noram Highlights Milestones During First Six Months Of 2022, Provides Corporate Outlook, And Expands Management Team
- Noram Receives Results For CVZ-81 With High-Grade Long Intercept Of 330ft With Weighted Average 1169 Ppm Li And Li High Of 1810 Ppm
Between Albemarle’s operations and Noram Lithium’s (TSXV:NRM) (OTCQB:NRVTF) land position lies a property comparable in size to the Zeus Property, that’s held by Cypress Development.
In February 2022, Cypress commenced its own Feasibility Study on its Clayton Valley Lithium Project, engaging Wood Plc as its independent lead author,19 and later engaging Thyssenkrupp Nucera for design and engineering of its Chlor-Alkali Plant also as part of the Feasibility Study.20
Given its favorable positioning, Noram Lithium is gearing up for its own Feasibility Study, working towards increasing its Resource along the way.
Taking into consideration Noram Lithium’s (TSXV:NRM) (OTCQB:NRVTF) optimal location of the Zeus Lithium Project, and the respectable resource already estimated so far, it’s worth looking at the sector and potential comparables also operating in the United States.
The Company has a Preliminary Economic Assessment (PEA) and a solid 43-101 Resource estimate of 1.78 MT Measured & Indicated and 3.89 MT Inferred of Lithium Carbonate Equivalent (“LCE”), but its market valuation is considerably lower than its competitors’.
While American Lithium’s stock is trading at a premium of over 8 times that of Noram Lithium (TSXV:NRM) (OTCQB:NRVTF), its inferred resource in Nevada is 2 times larger.
Meanwhile, Lithium Americas’ stock is trading at over $22, which is 45X larger than Noram’s despite having only a slightly larger domestic inferred resource.
As of January 26, 2023, shares of Noram Lithium (TSXV:NRM) (OTCQB:NRVTF) were selling for $0.49, which is considerably lower than the average price of its peers.
Looking at the six-month stock price performance of Noram Lithium compared to some of its contemporaries, it is clear that this firm can weather market storms coming back up from a low of $0.31 in November.
Onward March To Feasibility:
The Industry’s Single Most Important Study
As mentioned above, neighboring Noram Lithium Corp.’s (TSXV:NRM) (OTCQB:NRVTF) Zeus Lithium Project is Cypress Development’s Clayton Lithium Project which has a Feasibility Study underway.
Because Feasibility Studies are crucial along the journey towards building an operating mine, it’s worth looking at how serious Noram is about reaching that stage in the near term.
Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) already has a Preliminary Economic Assessment (PEA) in place, which was so significant that the company immediately commenced engineering and resource modeling to push to a PFS and a subsequent Definitive Feasibility (FS) study.
According to the robust PEA, Noram Lithium’s Zeus Lithium Project (After-Tax) has a US$2.67 Billion NPV (8%), 52% IRR, CAPEX of US$528 Million, for a 40-year Life of Mine (LOM).
This is based off of the 43-101 Resource (LCE) in place of 1.78 MT Measured & Indicated, and 3.89 MT Inferred.25
Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) completed its Phase VI exploration program consisting of 12 holes on time and within budget in the summer of 2022. The program focused on upgrading the existing inferred resources into the measured and indicated categories to be utilized in the company’s upcoming Pre-Feasibility Study (PFS).26, 27
ALL of the drill holes from the program intersected high grade lithium over significant lengths, and upon completion in the upcoming weeks, Noram anticipates a robust 6th resource model that may align the company with its peers regarding contained M&I resources of lithium carbonate equivalent (LCE).
Well-Funded for Upcoming Milestones To 2024
Thanks to closing a US$14 million strategic financing in Q1 2022, at a premium to market, with no warrant and no finder’s fee or commission, Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) is well-financed through 2023.
Solid Share Structure with Key Strategic Investors
Much of the credit for Noram Lithium Corp.’s (TSXV:NRM) (OTCQB:NRVTF) current financial situation goes to Waratah Capital Advisors who led the strategic investment in Q1 2022 at C$0.825 per share at a premium to the market with no attached warrant, which highlights the significant nature of Noram’s Zeus Lithium Project and its robust economics.
Between Lithium Royalty Corp. and Waratah Capital Advisors, approximately 16% of Noram’s issued shares were acquired, with the former purchasing a 1% Gross Overriding Royalty (GOR) for US$5M.
There is an option embedded to purchase an additional US$9M at C$1.50 up to a maximum of 19.9%; and if Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) trades at C$1.50, LRC/Waratah will have only 30 days to exercise their options.
Proven and Focused Leadership Team
Leading the way for Noram Lithium Corp. (TSXV:NRM) (OTCQB:NRVTF) is a very capable team in Management and the Board of Directors, with many decades of experience and accomplishments in the mining industry, and includes:
RECAP: 10 Reasons
Why Noram Lithium (TSXV:NRM) (OTCQB:NRVTF) Could Be One Of the Next Lithium Producers In the USA
1
Optimal Timing Within a Global Lithium Scramble
2
Top Ranked Mining Jurisdiction
3
Robust PEA in Place for Zeus Lithium Project
4
Established Large 43-101 Lithium Resource in Place
5
Well Funded through 2023 with close to $15M in its treasury and no debt
6
Tight Share Structure with Strategic Shareholder Base
7
Experienced Leadership Team in Engineering, Capital Markets, Geology
8
Updated 6th Resource Model Catalyst #1 – Re-rate Opportunity
9
Advancing a Pre-Feasibility Study – Catalyst #2 – Re-rate Opportunity
10
Push to Completion of Definitive Feasibility Study – Catalyst #3 – Re-rate Opportunity
With an upcoming Pre-Feasibility Study (PFS) and well-funded, Noram Lithium, Corp. (TSXV:NRM) (OTCQB:NRVTF) could be one of the shining stars in this down market with several exciting milestones and catalyst events on the horizon.