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Junior Studies Possible Pivot to Lithium in Quebec

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Quebec Precious Metals Corp. is studying whether its James Bay projects in Quebec host viable amounts of lithium, an element much in demand in the transition to green energy.

Quebec Precious Metals Corp. (QPM:TSX.V; CJCFF:OTCQB;YXEP:FSE) is starting a study to look at whether its James Bay projects in Quebec host viable amounts of lithium, an element much in demand in the transition to green energy.

A lithium rush is on in Quebec, which QPM said is "highly prospective for its lithium potential."

The company has contracted ALS GoldSpot Discoveries Ltd. to do a detailed lithium-targeting study on its 1,338 claims covering 697 square kilometers, all 100%-owned.

Many lithium deposits in the region are hosted in pegmatite rocks.

"We know we have pegmatite on our gold projects, but we didn't focus on lithium," QPM Chief Executive Officer Normand Champigny told Streetwise Reports. "That was not the purpose of the creation of the company. But we almost have a moral obligation to find out. And so that's what we're doing now. We're going to do a detailed study focusing on lithium to see what the possibilities are."

Initial study results are expected this summer, with further prospecting data expected this fall.

Other James Bay companies are seeing success exploring for the new "white gold," including Patriot Battery Metals Inc. (PMET:CA), which discovered a 4.3-kilometer trend of spodumene pegmatite in 2017. Its market cap was nearly CA$500 million last fall. Now, it's CA$1.34 billion.

"The greatest rush for lithium on the planet has occurred in Quebec in James Bay over the last few years," Champigny said.

Canadian Prime Minister Justin Trudeau and provincial leaders are selling the country as an important backstop to shift supply chains away from South America and China. Canada has listed lithium among the top six critical minerals. The others are graphite, nickel, cobalt, copper, and rare earth elements.

QPM noted that its Elmer East project is located north to northwest of three significant lithium deposits being developed by Allkem Ltd. (OROCF;OTCMKTS), Critical Elements Corp. (CRE:TSX.V), and Investissement Québec and Livent Corp. (LTHM:NYSE)

ALS GoldSpot will compile, extract, and synthesize geochemical and geological data using its proprietary workflows and artificial intelligence and machine learning algorithms, QPM said.

Initial study results are expected this summer, with further prospecting data expected this fall.

The Catalyst: Quebec's Lithium Rush

Patriot said it has discovered more than 70 lithium pegmatite outcrops in six distinct clusters over 20 kilometers of trend it has evaluated to date. More than 20 kilometers of trend remain to be explored.

It has completed more than 52 drill holes for more than 20,000 meters this year. Intercepts have included 156.9 meters at 2.12% lithium oxide (Li2O), including 25 meters at 5.04% Li2O.

"The ongoing advancement of the CV5 pegmatite to an initial mineral resource estimate and subsequent (preliminary feasibility study or PFS) underway is expected to continue to de-risk the . . . project area," said Blair Way, Patriot president, and chief executive officer.

One out of five vehicles sold worldwide could be an EV in less than two years, and Ford and General Motors have set a goal of achieving 40–50% of their sales from EVs in the U.S. by 2030.

Construction at Allkem's James Bay lithium project has been approved and is expected to employ 280 workers during construction and an average of 170 workers during the mine's operation.

The project has a mineral resource estimate of 40.3 million tonnes (Mt) at 1.4% Li2O with an ore reserve of 37.2 Mt at 1.3% Li2O over a 19-year mine life.

Critical Elements' Rose project would have an average annual production of more than 173,000 tonnes of chemical grade 5.5% spodumene concentrate and more than 51,000 tonnes of technical grade 6% spodumene concentrate, the company said.

Also nearby is the Whabouchi mine, jointly owned by Investissement Quebec and Livent. It is expecting to publish a feasibility study and begin construction in the first half of this year.

Supply/Demand Deficit Looms

The deficit between lithium demand and production and highly probable and probable lithium projects will be over 3.5 Mt by 2040, according to Benchmark Mineral Intelligence.

The world needs lithium and other critical elements like copper to help fuel the move to green energy. Lithium — a soft, silvery metal with highly reactive and flammable properties — is a major component of electric vehicle (EV) batteries. It’s also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.

One out of five vehicles sold worldwide could be an EV in less than two years, and Ford and General Motors have set a goal of achieving 40–50% of their sales from EVs in the U.S. by 2030.

To qualify for tax credits under new U.S. laws, a significant percentage of batteries and minerals in batteries must come from the U.S. or Canada.

China only has less than a quarter of the world’s lithium resources but controlled about two-thirds of the world’s lithium processing and refining capacity in 2021, Rystad Energy said.

"Companies and governments prefer lithium to be produced in a more stable jurisdiction," Champigny said.

Streetwise Ownership Overview*

Quebec Precious Metals Corp. (QPM:TSX.V; CJCFF:OTCQB;YXEP:FSE)

*Share Structure as of 3/28/2023

QPM also has another play when it comes to lithium. It entered a binding memorandum of understanding with Idaho Champion Gold Mines Canada Inc. (ITKO:CNX) last fall for Idaho Champion to acquire a 100% interest in two other James Bay lithium pegmatite projects.

"We have 6% of their shares," he said. "So, we can benefit from that, as well."

Ownership and Share Structure

Major mining company Newmont Corp. (NEM:NYSE) owns about 13% of QPM. Government-backed Caisse de Dépôt et Placement du Québec and other Québec institutions own about 12%.

QPM management and insiders own about 15%, including non-executive Chairman James Shannon with 0.8% or 660,000 shares and Champigny with 0.33% or 280,000 shares, according to Reuters.

The rest, 60%, is retail.

The company is covered by Laurentian Bank Securities' Barry Allan and Research Capital Corporation's Ryan Hanley. Newsletter writer Chris Temple of The National Investor also follows the stock.

Quebec Precious Metals has a market cap of CA$8.71 million and 83.2 million shares outstanding, of which about 71 million are free-floating. It trades in a 52-week range of CA$0.19 to CA$0.06.

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1) Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None.

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