Sayona Mining is a small cap lithium and battery minerals explorer with a 100%-owned subsidiary called Sayona Québec, based out of Montreal in Canada. The ASX-listed company aims to play a leading role in Québec’s emerging lithium industry through its bid for the North American Lithium (NAL) mine, which it aims to restore to profitable operations through the expertise of its world-class bidding team. Combining NAL with its emerging Authier lithium project could provide a substantial boost to the province’s lithium output, with the potential to help deliver a complete value chain through to downstream processing.
The NAL bid
Sayona intends to boost its lithium portfolio in Québec through the potential acquisition of NAL, a company with a producing lithium mine and concentrator located just 25 km (as the crow flies) from Sayona’s flagship Authier project.
At this short distance, Sayona would be able to blend its product from Authier with the spodumene produced at NAL’s deposit, should the former be successful in its bid for the latter. There is also the possibility to produce battery grade lithium carbonate at NAL’s existing facilities, with necessary investment.
Sayona’s managing director, Brett Lynch believes a significant turnaround is required at NAL to get the mine running at nameplate capacity once again, but he is confident that Sayona can deliver this after the company appointed a world class team to support its NAL bid.
“Our bid support team has already been there and done that in terms of producing high quality lithium to a world market, including companies such as Altura Mining, which has a producing mine in Western Australia, with further operational expertise provided by Primero.
“We also have recruited NAL’s former mine manager, together with engineers BBA and Hatch and financial expertise from Jett Capital Advisors and PwC.”
Sayona submitted the bid before the stated deadline of 2pm (Montreal time) on February 21, after which Lynch said he was confident of achieving a successful turnaround at NAL that supports Québec’s lithium strategy.
Authier project upgraded
Prior to this, some positive news concerning the company’s other projects has also boosted confidence amongst the Sayona team.
On November 11, Sayona announced a revised definitive feasibility study (DFS) for its Authier project which pointed to its potential as a sustainable and profitable new lithium mine.
In an improvement on the previous DFS completed in September 2018, the revised DFS showed an estimated net present value of C$216 million, up from the $184 million estimated previously. The study showed a pre-tax internal rate of return of 33.9% and estimated capital payback within 2.7 years, based on annual average spodumene production of 114,116 tonnes (6% Li2O).
The hard rock Authier project is located around 45 km from the city of Val d’Or in Québec – a well-established mining district.
With an estimated mining life of some 14 years, Authier could generate up to 176 valuable new jobs for the benefit of the local community, including First Nations and other stakeholders.
Sayona has also been progressing a revised environmental impact statement (EIS) alongside the DFS, considering ways in which the mine can be redesigned to limit its impact on the local environment.
The additional review of the EIS is a mandatory requirement of the rigorous BAPE (bureau d’audiences publiques en environnement) process stipulated by the Québec Government, which obliges new mine developers to conduct wide-reaching community engagement before being granted permission to mine.
“The project and its impacts are put out openly and transparently in structured, formal public meetings chaired by the government. We’ve been working with several stakeholder groups, including the local First Nations group and some of the environmental groups in order to fully understand how the project will affect the local area.”
On January 22, Sayona announced the lodgement of its new EIS with Québec’s Ministry of the Environment and the Fight against Climate Change. Following further public hearings and review, the company ultimately expects project approval under the BAPE in late 2020.
Also in Québec, Sayona is increasingly excited by the potential of a new lithium deposit at its Viau-Dallaire prospect, located within its Tansim project some 82 km Southwest of Authier.
On November 19, Sayona announced an estimated exploration target for Viau-Dallaire, comprising an estimated five million to 25 million tonnes at an estimated grade of 1.2 to 1.3% Li2O. The mineralisation is open in all directions.
“The exploration target has demonstrated the potential for Viau‐Dallaire to become another key part of our strategy to develop a lithium hub, supporting Québec’s ambitions to generate a complete lithium value chain,” Lynch said.
“Sayona could potentially feed spodumene ore from Authier and Viau‐Dallaire into NAL’s concentrator to generate the necessary quality product for lithium‐ion battery manufacturing.”
More drilling is under consideration for the prospect, which ultimately could become another key part of Sayona’s lithium portfolio in Québec.
Québec’s lithium strategy
Recognising the role of lithium as the key ingredient in modern technology, from portable consumer technology to renewable energy storage and electric vehicles, the Québec Government has set out a clear strategy to capitalise on its voluminous spodumene reserves by establishing a world-leading lithium hub for the growing battery markets.
“I don’t think there is any government in the world that has a clearer vision and mandate on developing its lithium resources to become a world leader in battery production than Québec,” Lynch declares.
“That beacon on the hill starts with the Premier of Québec and goes down through the ministries.”
Lynch is referring to a declaration made in August by Québec’s Premier François Legault that lithium is a ‘jewel’ that the province has yet to exploit. The Premier also envisaged a downstream processing industry and the possibility of 100% Québec lithium-ion battery production.
It goes without saying that Québec is a resource-rich country with a skilful mining base and all the necessary infrastructure to support new lithium mines, including access to clean and green hydro-electric power.
However, the challenge for Québec in the lithium sector will centre on developing a full value chain, including downstream processing facilities, so that it can establish itself as a world-leading jurisdiction for lithium-ion battery production. This is a task that Québec is perfectly prepared for, according to Lynch.
“When you look at Québec, there isn’t anywhere more ideally situated to service the future North American demand for battery manufacturing. It’s got all the logistical support and is low geopolitical risk.
“It’s going to be very difficult for anyone else to ship lithium around the world to compete in that North American market,” he claims.
For Sayona and Québec, 2020 is suddenly looking like a milestone year as the electric vehicle revolution drives increased demand for lithium-ion batteries.
“Sayona is in the right place at the right time. We’re very confident of moving forward in 2020 as we help Québec become a leading player in this key industry for the 21st century,” Lynch concludes.