Project of the Week: Lithium Americas Thacker Pass

2nd June 2021

 

This week we are moving away from the precious metals space, to take a look a critical metal for the green revolution and battery technology in particular. Lithium may not be as shiny and attractive as our old friends gold and silver, but over the next decade it’s importance and demand is only going to rise (just ask Musk and Co.!). According to critical materials supply chain analysts Roskill, lithium demand is set to continue accelerating through 2021 into the next year, with battery grade compounds forecast to account for more than 70% of the total (Figure 1).

Figure 1: Lithium battery demand by application. Automotive demand is set to continue growing through the 2020s (source: Roskill).

Lithium Americas Corporation (TSE:LAC) is a Toronto main market-listed developer and aspiring producer with two Lithium projects. The first, Cauchari-Olaroz is a Li-brine evaporation plant located in NW Argentina, and the second is the Thacker Pass lithium clay project in Nevada. Some of the readership may be familiar with LAC due to Thacker Pass being one of the US mining projects granted with a Record of Decision from the US Bureau of Land Management thanks to a presidential Executive Order offering an expedited approval process signed in the turbulent twilight of the Trump presidency. This approval and a public offering which closed on 22nd January 2021 having raised capital of US$400M, resulted in the price of LAC peaking at CA$26.82 – up 113% since the first of the year.

Figure 2. Location of the Thacker Pass Project near the Nevada-Oregon border.

Now, the Thacker Pass project is a little different from a typical brine or mineral extraction lithium source, such as those being developed by our Cornish comrades, as the metal in question is hosted in Li-rich clays which formed as lacustrine deposits in a caldera lake. The deposit is located in the 1,200 km2 McDermitt caldera which formed approximately 16.3 Ma. Studies have determined that the caldera was formed by a single large eruption of a laterally extensive and crystal-poor ignimbrite (Tuff of Thacker Creek, Figure 3) that spread a tuffaceous horizon up to 60 km from the eruption. The eruption is estimated to have had a volume of erupted material of over 500 cubic kilometres. Following the collapse, a crater lake formed which is where Li-rich clays were deposited just above the tuffaceous horizon.

The model for the formation of the Li-rich clays is loose and three main processes are proposed. Two rely on the fact that the parental rhyolitic magmas of the greater McDermitt Volcanic Field are enriched in lithium, owing to the high level of crustal assimilation during its ascent through the asthenosphere. Because of this initial enrichment, after the caldera-forming event, a large volume of Li-rich glass, pumice and ash covered the surface of the land. Subsequent weathering of the settled tephra resulted in transportation of Li-rich sediment into the caldera lake basin. Related to this process, the high surface area particles of Li-rich material are susceptible to leaching of Li by meteoric fluids which then flowed into the caldera. A secondary diagenetic process is thought to be involved in the formation of the clays as evidenced by the Li-rich horizons within the sediments being controlled by their position relative to the smectite-illite transition zone. The genesis of the deposit is not currently fully understood but is hypothesised to be a combination of the above processes.

Figure 3. Geological sketch map of the Thacker Pass prospect and surrounding area.

Work up to now has included intensive drilling in the main area of interest, conducted both by LAC as well as previous property owners. Over 40 exploratory holes were drilled by LAC in the period 2007-2008 and in 2017 they embarked on a new exploration program with the aim of expanding and improving confidence in the resource. This work resulted in the updated resource released in April 2018, which estimates a resource of 6 Mt of lithium carbonate equivalent (LCE) which at the May mean price of US$12,800/t has a value of US$78B. With roughly US$100M spent so far in exploration and development of the property, the outlook is fairly good for Thacker Pass.

Well, it would be, if LAC hadn’t encountered strong opposition from both environmentalists and the People of Red Mountain, of whom the local Fort McDermitt Paiute-Shoshone Tribe are part. Following the BLM’s decision in January a semi-permanent encampment has been erected near the Thacker Pass site, with the aim of disrupting and slowing development of the mine. These groups accuse LAC of dishonesty and wilful ignorance of the tribal connection to Thacker Pass, use of water and ecological damage of the mine site. There are currently several lawsuits including both the BLM and LAC active on this matter. To compound these troubles, last week two Biden administration officials leaked to the press that the US government plans to look abroad for the raw materials required for battery production. The goal of this move appears to be to aid the US economy’s move towards a carbon-neutral future and Biden’s goal to cut greenhouse emissions in half by 2030.

All in all, I think the project is likely to go ahead to production without much delay as the global appetite for battery-grade lithium is ever growing. Despite the social and political setbacks LAC are a well-funded operation and if they can successfully scale up processing operations here at Thacker Pass, it appears that it could be the United States’ primary domestic lithium source for decades to come.
Dan

All information in the above article is sourced from the Lithium Americas Corporation website and materials within, as well as sources listed below.

Sources:
Lithium Americas Corp.: https://www.lithiumamericas.com/
Thacker Pass pre-feasibility study:
https://www.lithiumamericas.com/_resources/pdf/investors/technical-reports/thacker pass/Technical-Report-Thacker-Pass.pdf
Roskill lithium outlook: https://roskill.com/market-report/lithium/
Biden Administration look abroad for battery raw materials:
https://www.reuters.com/business/energy/biden-looks-abroad-electric-vehicle-metals-blow-us miners-2021-05-25/
Protect Thacker Pass: https://www.protectthackerpass.org/