Armed with one of the world’s largest undeveloped uranium deposits, American Lithium (TSXV: Li | OTCQB: LIACF) is well-placed to bring its Macusani uranium project in Peru to the market at a time when nuclear energy is experiencing a global renaissance.
Uranium’s price has risen steadily in recent years, with many analysts highlighting uranium’s clean energy benefits as the world races toward zero carbon emissions by 2030, seeing forecasters tipping it as a commodity to follow in 2022.
At the same time, sentiment towards the benefits of nuclear power is on the rise while public concern is also improving. A recent survey undertaken by ecoAmerica on American attitudes to the topic of clean energy, uncovered a significant shift in sentiment in support of nuclear power between 2018 and 2021.
This is all good news for American Lithium which has mapped out a concise path for commercializing its massive, low-cost Macusani uranium resource in south-eastern Peru.
Located in an emerging uranium district in a mining-friendly jurisdiction, Macusani is comprised of multiple uranium deposits that are large scale, very near-to-surface with excellent leach characteristics – giving them a strong economic case.
American Lithium, an early mover in the area, has a dominant land position at Macusani, controlling all known uranium resources in Peru having already defined a Measured and Indicated Resource of52.9M lbs U3O8(248 ppm)(75ppm U cut-off) and Inferred Resource of72.1M lbs U3O8(251 ppm)(75ppm U cut-off) for its Peruvian project. Macusani has an existing PEA1 completed using $US50/lb U3O8 price that shows it has low cost (<US$18/lb U3O8) production potential.
Exploration upside sweetens the Big Picture
Notably, the company has also identified major exploration upside, a factor which is attracting significant market interest.
In late 2021, the company highlighted that potential when it revealed it had obtained further positive prospecting, mapping and sampling results, unveiling the real potential to grow the already large Macusani resource numbers significantly.
Highlights from that programme included:
- Radiometric prospecting and sampling work identified possible extensions to five existing uranium deposits and three new anomalies for drill testing
- Results from over 90 grab samples included grades ranging from a low of 6.3 ppm U to a high of 377,400 ppm U (44.5% U3O8), with all samples averaging 18,270 ppm U (2.15% U3O8)
COO, Dr Laurence Stefan, said the results of the radiometric prospecting and sampling programme further confirmed the exciting potential for further resource expansion at Macusani, “already one of the largest undeveloped uranium projects globally”.
The company’s studies have identified up to 50 drill targets around the existing defined deposits. Future exploration plans include:
- Extension, infill and exploration drilling at Macusani utilizing two company-owned diamond drill rigs which is set tocommence upon receipt of final permits
- A planned 12,000m (70 holes) of diamond drilling targeting expansion of current uranium deposits/resources, testing of new radiometric anomalies, and follow-up high-grade, near-surface exploration targets identified in the 2021 field work programme
Metallurgical work attests to robust project economics
Alongside the potential to significantly expand existing resources through development and exploration drilling, Macusani benefits significantly cost wise from the near-surface location of its main deposits and the recent identification of a simplified leach process.
American Lithium recently received excellent uranium leach test results from work completed at the highly regarded Australian Nuclear Science and Technology Organisation (ANSTO Minerals) and from TECMMINE Mineral Processing Consultants.
These results came from work carried out on uranium mineralization from five of the company’s deposits at Macusani which confirmed excellent extraction, low acid consumption and short leach cycle times.
- 91.0 to 98.0% uranium extraction using weak sulphuric acid at ambient temperatures
- 97.0 to 99.7% uranium extraction using sulphuric acid at elevated temperatures (60-95°C) and a variety of acid concentrations
- Weaker acid concentrations obtained similar uranium extractions (pH 1.8-1.5 versus pH 1.2)
- Results demonstrated the ability to extract even higher levels of uranium than previously demonstrated, with lower acid consumption
American Lithium’s CEO, Simon Clarke, said the company continues to refine its processing options at Macusani as it awaits the grant of final permits to commence the resource expansion and in-fill drill programme which will also support an updated Macusani PEA.
“These recent results confirm the outstanding leach characteristics of Macusani mineralization,” Mr Clarke said.
“The high recoveries, low acid consumption and short leach cycles combined with previously announced positive gravity pre-concentration results should result in significant additional improvements to the already robust economics for this globally significant uranium project.”
With recent developments and upcoming work programs American Lithium is looking to fast-track the Macusani Project through development towards commercialization , with uranium mining and processing regulations in place and an Environmental Impact Assessment (EIA) underway.
Obtaining full environmental and project permits are high on the agenda for American Lithium over the coming months, alongside the completion of an updated PEA.
Milestones to be achieved over the next 6-9 months include a full update of its historic PEA (2016) by Q4 2022. Other key components include:
- A focus on the economic benefits of gravity pre-concentration which has successfully doubled the feed grade and has potential to significantly increase throughput / life of mine using additional resources not previously included in the PEA
- The inclusion of any additional resources defined during upcoming drill programme into future PEA mine plan
- The inclusion of results of the on-going metallurgical leach and precipitation test work
- The production of sufficient quantities of yellowcake product for chemical and commercial assessment
Developing the proximal Falchani lithium deposit
As one of the largest hard rock lithium deposits in the world, the Falchani lithium project offers the potential to become one of the lowest-cost mining operations of its kind. This gives American Lithium a strong appeal to global battery manufacturers as well as end users looking to secure future supply.
Falchani already benefits from a preliminary economic assessment (PEA2) that assigns a net present value of US$1.55B to the deposit with highly competitive operating costs. This is based on a calculation of 0.96M tonnes of LCE indicated, and a further 3.74M tonnes inferred. The deposit also has potential for significant resource expansion through extension and infill drilling.
Moreover, Falchani is unlike most of Latin America’s other large-scale lithium projects in that it is not a brine-based deposit and therefore does not require a water-intensive process to extract lithium carbonate.
Falchani is also located in close proximity to Macusani, which offers the prospect of cost-saving synergies for the future development of regional mining infrastructure.
The Company has been dealing with validity of title to 32 of its 151 mineral concessions in Peru that affects a portion of both lithium and uranium resources. However, there has been a strong judgement in favour of American Lithium’s maintaining title to all 32 concessions that is currently under appeal by the Ministry of Energy and Mines and INGEMMET. Although a positive outcome cannot be guaranteed, it is currently anticipated.
Major U.S. lithium project opportunity gathers momentum
The company is also making strong progress with its strategically-located TLC Lithium Project in one of the world’s most under-developed lithium sedimentary basins in Nevada, U.S.
TLC comprises a large near surface lithium deposit with a large defined resource and is in the same geological environment as Albemarle’s world-class Silver Peak lithium mine and several advanced-stage lithium projects.
American Lithium recently launched the final phase towards the completion of its maiden preliminary economic assessment (PEA) for the TLC Lithium project with the appointment of DRA Global as lead engineer, along with Stantec Consulting Ltd.
The company is refining TLC’s mineral resources and mine design, alongside on-going acid leach and roast water leach studies and precipitation test work at ANSTO Minerals in Australia.
These results will be incorporated into the PEA with all previous TLC process studies completed at laboratories in the U.S., Canada, and Peru.
The first draft of the maiden TLC PEA, as well as preliminary economic modelling, is anticipated to be completed by the end of Q2, 2022.
With a number of near-term milestones in both Nevada and Peru there is the potential for the company’s stock to receive a major re-rating and now is the time to keep a close eye on American Lithium’s upcoming news flow.
1 – “Macusani Project, Macusani, Peru, NI 43-101 Technical Report – Preliminary Economic Assessment” prepared Michael Short and Thomas Apelt of GBM Minerals Engineering Consultants Limited, David Young of The Mineral Corporation and Mark Mounde of Wardell Armstrong International Limited, effective date January 12, 2016.
2 – “Falchani Lithium Project NI 43-101 Technical Report – Preliminary Economic Assessment” prepared by John Joseph Riordan, David Thompson, Valentine Cotzee of DRA Pacific and Mr. Stewart Nupen of The Mineral Corporation, effective February 4, 2020.