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Continued surpluses in the lithium market continued weighing down prices and impeding the sector’s growth during the third quarter of 2024.
A broad consolidation prompted analysts to declare that pries have bottomed, signaling a potential recovery ahead.
According to a Sprott Insights report from late July, a lithium shortage could materialize in 2025 and will be exacerbated by the lack of new production able to ramp up quickly.
“There are currently only 101 lithium mines in the world, and even as more mines and exploration projects come online, the added supply may likely not be able to keep up with demand,” Jacob White wrote.
Demand from China alone is projected to climb by nearly 20 percent annually over the next decade.
The impact of lithium shortages may also be heightened by the low-price environment that has plagued the market in 2024.
“This is especially evident given that the current unsustainably low lithium prices have led to project curtailments and driven some miners to reduce capital expenditures and investments in future supply,” White noted. “We believe that the lithium price may have bottomed, and higher lithium prices may be necessary to incentivize the required future production.”
1. Q2 Metals (TSXV:QTWO)
Year-to-date gain: 408 percentMarket cap: C$174.5 millionShare price: C$1.27
Exploration firm Q2 Metals is exploring its flagship Mia lithium property in the Eeyou Istchee James Bay region of Québec, Canada. The property contains the Mia trend, which spans over 10 kilometers. Also included in Q2 Metals’ portfolio is the Stellar lithium property, comprised of 77 claims and located 6 kilometers north of the Mia property.
This year, Q2 Metals has also focused on exploring the Cisco lithium property, which is situated in the same region. On February 29, the company entered into three separate option agreements to gain a 100 percent interest in Cisco, news that caused its share price to skyrocket; it reached a year-to-date high of C$0.54 on March 4. Q2 Metals closed the acquisition of Cisco in June and now wholly owns the project.
In mid-May, Q2 Metals released re-assayed results from 2023 drilling conducted at Cisco by the property’s vendors. The company used the analytical method it has applied to its Mia drill cores.
“We are pleased with the positive outcome of the re-analysis of the Cisco drill results,” said Q2 Metals Vice President of Exploration Neil McCallum. “A thorough review of the quality control measures has solidified that the new results are more accurate than the original results previously announced. It’s not an unexpected change as the analytical methods now used are more accurate at higher grades above roughly 1.5 percent Li2O and we have several samples above that range.”
Later that month, the company announced the start of a summer drill program at the Cisco property. It has since released multiple significant updates, including the confirmation of eight new mineralized zones on July 8.
Company shares rose to a year-to-date high of C$1.48 on October 10, shortly after Q2 released drill results and core assays from the Cisco property. As of October 1, 17 holes covering 6,360 meters in total have been drilled.
Additionally, each drill hole encountered pegmatite with visible signs of spodumene mineralization, a key lithium-bearing mineral.
“These assays continue to validate the potential and scale of the Cisco Property as that of a larger mineralized system,” said Neil McCallum, VP exploration. “One important observation of these results is the higher-grade nature of the larger mineralized system as we test and track the system progressing to the south.”
On the corporate side, Q2 announced a C$7.5 million private placement on July 10. The placement, which was divided into two tranches, was successfully closed on August 9, 2024.
2. Volt Lithium (TSXV:VLT)
Year-to-date gains: 78.26 percentMarket cap: C$57.44 millionShare price: C$0.41
Volt Lithium is a lithium development and technology company aiming to become a premier North American lithium producer utilizing its unique technology to extract lithium from oilfield brine.
Shares of Volt reached a year-to-date high of C$0.49 on September 26.
On April 29, Volt announced a strategic investment of US$1.5 million by an unnamed company operating in the Delaware Basin in West Texas. This investment is earmarked for the deployment of a field unit to produce lithium hydroxide monohydrate using Volt’s proprietary direct lithium extraction technology.
The company’s share price retreated in the second half of Q2, but July 17 news that Volt increased its processing capacity at its operations in Alberta, Canada, by 100 fold to 96,000 liters per day caused its price to shoot up more than C$0.08 during trading that day.
An August announcement from Volt highlighted the deployment and subsequent production scale up of Volt’s DLE technology in the Permian Basin. The field unit has the capacity to process 200,000 liters (1,250 barrels) of oilfield brine per day on location in West Texas.
3. Lithium Chile (TSXV:LITH)
Year-to-date gains: 30.19 percentMarket cap: C$140.03 millionShare price: C$0.69
South America-focused Lithium Chile owns several lithium land packages in Chile and Argentina. Presently, the explorer is working to delineate the deposit at its Salar de Arizaro property in Argentina.
On April 9, Lithium Chile announced a 24 percent increase in the resource estimate for Salar de Arizaro. The new total for the project is 4.12 million metric tons (MT) of lithium carbonate equivalent, categorized as follows: 261,000 MT in the measured category, 2.24 million MT in the indicated category and 1.62 million MT in the inferred category.
Not long after, on April 18, the company reported the creation of two wholly owned Canadian subsidiaries — Lithium Chile 2.0 and Kairos Gold — as part of a spinout to separate its Chilean and Argentinian assets.
Lithium Chile will retain its Argentinian lithium projects, and transfer its 111,978 hectares of Chilean lithium properties to Lithium Chile 2.0 and its portfolio of gold assets in Chile to Kairos Gold.
In a July operational update for the Salar de Arizaro project the company highlighted high grade intercepts from hole ARGENTO-06.
4. Foremost Lithium (CSE:FAT)
Year-to-date gains: 10.98 percentMarket cap: C$20.88 millionShare price: C$3.74
Foremost Lithium is an exploration company with several hard rock lithium properties, which it calls the Lithium Lane projects, in the Snow Lake district of Manitoba, Canada, as well as the Lac Simard South project in Québec, Canada.
In January, Foremost received its third C$300,000 grant from the Manitoba Mineral Development Fund. The funds have been earmarked for continued exploration and drilling at the Snow Lake property.
Shares of the company hit a year-to-date high of C$4.51 in late February, when Foremost released promising intercepts from its winter drill program at its Zoro lithium project in Manitoba.
In May, the company completed the winter drill program at the Zoro project, which encompassed 21 diamond drill holes. According to the statement, the preliminary results “demonstrated the continuity of lithium mineralization along Dyke 1.”
In early June, Foremost announced plans to spin out its Winston gold-silver project in New Mexico, US, into a new wholly owned subsidiary, Rio Grande Resources. Winston includes three historic mine sites.
A mid-August release from Foremost included an update on drill activities at Zoro that highlighted strong results from three holes.
“We are pleased to announce these strong drill results, reflecting the significant upside potential in our Zoro property and in the entirety of our Lithium Lane projects,” Jason Barnard, president and CEO of Foremost, stated.
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.