Piedmont Lithium

'The world's best located lithium business'

 


 

Between the 1950s and the 1980s, nearly all of the world’s lithium was produced from the Carolina Tin-Spodumene belt in the US state of North Carolina, and Piedmont Lithium is a young company which firmly believes that exciting mining opportunities still exist within this legendary lithium hotspot. Piedmont is a branch of the Australian mining incubator Apollo Group, and acquired its first North Carolina assets in July 2016 after Apollo’s New York City team decided to look for prospective deposits in the massive tin-spodumene belt. Apollo subsequently formed Piedmont, the group’s first lithium-focused business, which is perfectly located to take advantage of rising domestic demand for the metal, primarily from large-scale EV manufacturers.

 

After partnering with prominent native North Carolinian geologist Lamont Leatherman, Piedmont discovered a land package in the world-class Carolina Tin-Spodumene belt and quickly acquired some initial land leases, completed successful initial drilling before deciding to commit to the project.

 

In April 2017, the company raised $5 million from the ASX capital market to support its activity on the Piedmont Lithium Project and appointed Wall Street veteran Keith Phillips as CEO and President three months later. Since then, Phillips has built the management team and led Piedmont’s progress on the project.

 

“We have since concluded a large 12,000 metres drill programme (our Phase 2 programme) and are two-thirds of the way through a 20,000 metres Phase 3 programme. We’ve also added very strong people on the project management, process engineering and corporate side,” summarises Phillips.

 

The Carolina Tin-Spodumene belt

 

The project is located along trend to the Hallman-Beam and Kings Mountain mines, the only two historic spodumene mines in the US, let alone within the Carolina Tin-Spodumene belt. The belt itself is a massive 40 miles long by one mile wide, which makes it somewhat surprising that only two mines have operated across the vast expanse since it was first identified by the US Geological Survey in 1942.

 

But today, this relative paucity of further exploration has provided Piedmont with ample opportunities to identify potential world-class deposits across its 1,200 acres of property in the region.

 

“It’s very clear its not mined out,” declares Phillips. “It’s 40 miles long and there have only been two mines on the property, and when those mines were operating they provided virtually all of the world’s supply of lithium. No more was really needed, so not a lot was done [in terms of further exploration].”

 

However, the lithium market of today is a different beast compared to its stature throughout the second half of the 20th century. The discovery of new uses of lithium has transformed it into a massive growth business that is 10 times larger than it used to be and is still growing dramatically.

 

Consequently, Piedmont has strong grounds to return to this once ubiquitous source of lithium in search of additional discoveries to feed the ravenous contemporary lithium market, and Phillips is confident that the project will deliver.

 

“We’ll have our maiden resource out in June and we believe that will be a world class initial resource with substantial potential to grow. We have under-explored acreage under our control, and we continue to look for land on the belt that has the potential to do more of the same.”

 

‘Cradle of the Lithium industry’

 

Aside from being home to two major historic spodumene-producing mines, this region of North Carolina has been named ‘the cradle of the lithium industry’ by Piedmont for a host of additional reasons.

 

The Piedmont Lithium Project is located 25 miles West of Charlotte, a booming city of 2.4 million people and the second-fastest growing city in the US. While it is not a mining boom town akin to Perth, Charlotte serves as a corporate headquarters for a catalogue of major domestic businesses, including Bank of America, Duke Energy and Nucor.

 

The city is also a domestic hub in the lithium space, which is reflected by Albemarle and FMC, two of the world’s biggest lithium players, electing to build their headquarters in Charlotte. Furthermore, being the major growth city that it is, all the infrastructure one would expect is there – major interstate highways, rail, an airport and power of all descriptions.

 

“The area has also been negatively affected by the shutdown of a lot of textile and furniture plants in North Carolina, two of the big three traditional industries in the state, along with tobacco,” reveals Phillips.

 

“All three have been hit by new markets and developments and so there is a lot of skilled blue-collar labourers out of work or under-employed looking for jobs that we can offer.” The state is also home to multiple universities, thus providing the perfect blend of talent that is required for a sizeable mining project.

 

Another major advantage to working in this region is the remarkable affordability of land even though the project is within touching distance of the second fastest growing city in the US.

 

Finally, when comparing the remaining costs of developing lithium mines with other hotspots across the globe, it becomes clear that Piedmont’s project is one of the best located lithium projects in the world.

 

Other major hard-rock deposits tend to be in Northern Québec or Western Australia, which are remote locations where labour camps need to be built and infrastructure is limited. The same goes for lithium brine deposits found in high-altitude regions of the Andes in South America.

 

“For instance, in Québec most of the projects require fly-in fly-out camps for the labour, which means labour costs will be more than triple what we pay,” asserts Phillips. “WA is much of the same and has high labour costs as well as high costs for power, diesel, and natural gas.

 

“We will have significant CAPEX savings compared to those projects. We think ours is a wonderful mineral belt, one of many wonderful lithium belts in the world, but I can’t think of any lithium as well located as ours.”

 

A busy 12 months

 

Piedmont has already racked up a series of accomplishments on its project over the last 12 months, with many more targets also in the pipeline to 2020. Having completed its Phase 1 and 2 drill programmes, the company started its Phase 3 programme in December 2017.

 

The comprehensive 20,000 metres infill drilling programme will contribute to the definition of a maiden mineral resource and is also aggressively testing the extensions of the pegmatites identified both along strike and down dip.

 

An initial exploration target of between 10 to 15 million tonnes at a grade of between 1% and 1.25% lithium oxide is currently has been estimated by Piedmont’s partner CSA Global.

 

As of April 2018, the Phase 3 drilling programme is two thirds complete with six drill rigs on location and over many holes being assayed. Drilling results will be released on a regular basis over the next several weeks, followed by a maiden mineral resource announcement by the end of Q2 (June).

 

Piedmont also commenced its scoping study in January 2018, with Primero Group coordinating the study along with CSA. Both are very experienced in hard rock lithium mining and downstream production.

 

SGS has also been a key partner on the project, providing all assaying services, while on the metallurgical analysis side Piedmont is working with North Carolina State University’s Mineral Research Laboratory, a pioneer in the development of spodumene processing techniques, and Colorado-based Hazen Research. Finally, the local Charlotte office of global engineering firm HDR is leading the permitting process.

 

Full steam ahead

 

More recently, Piedmont has been working on a secondary listing in the US that Phillips hopes to complete by the end of April, which is one of several sequential targets that the company expects to hit over 2018.

 

“The most important targets are in somewhat chronological order: The ongoing drill programme, the US listing, the maiden resource in June, which is well at hand. Fourth is metallurgical work which is underway, and we expect that to be largely completed in time for our scoping study in July/August.

 

“Once we have a scoping study in place, we will launch right into a pre-feasibility study and that will take us into the permit application process and we will also continue to develop relationships with potential strategic and offtake partners.”

 

The scoping study will assess feasibility for a fully-integrated mining project including mine, concentrator, and lithium conversion plant to be located in the mining-friendly North Carolina region.

 

Being able to deliver lithium in a readily usable form is going to be crucial for Piedmont in terms of seeking potential offtake agreements with end users, particularly from the growing EV market as the race to mobilise viable lithium sources heats up.

 

However, in the eyes of Phillips it is the location of the project that will have domestic EV manufacturers queueing up to buy Piedmont’s lithium.

 

“Every automotive company in the US would like to be able source battery materials from the US,” he proclaims. “The battery materials supply chain is going to evolve very rapidly in the US and we are one of the only domestic sources with any real chance of coming to development.

 

“Our impression is that the offtake issue will take care of itself, so long as the project is viewed to be of a sufficient scale and quality, which is the purpose of the resource, scoping study and metallurgical work.”

 

Being integrated downstream will also introduce new revenue streams for Piedmont, in the shape of by-products. The company has done initial work on the recoveries and flotation for by-products including quartz, feldspar and mica which there are already markets for in North Carolina. This by-product credit from these sources has the potential to significantly sweeten the project economics.

 

Piedmont expects to complete its scoping study by Q3 2018, before submitting a permit submission towards the end of Q4. After a 12-month permitting timeline, the company will be clear to build its mine and downstream facilities.

 

Therefore, the Piedmont Lithium Project is set to enter production by 2020, a date that has been widely forecasted to herald the beginning of a revolution in the domestic EV industry.

 

“This EV boom is a secular trend that is massive and far bigger than people give it credit for. I think we are rapidly approaching a point where every major car company in the world is committing very aggressively to electrification.

 

“They are investing billions of dollars of capital into that process and they are identifying sites and committing to them.” Once they commit, there is no turning back and Piedmont will be waiting at the front of the domestic lithium supply chain with its arms open wide.