Spey Resources Corp. (SPEY:CSE; SPEYF:OTC; 2JS:FRA) has announced it has sold its newly purchased lithium projects in Quebec's James Bay region to focus on its flagship properties in Argentina's "Lithium Triangle."
The 454, West Lac Corvette, Trieste, and Salomon projects properties came along with the purchase of Lithium Energy Metal Corp. last year.
They sit close to Patriot Battery Metals Inc.'s project in the area, which saw its market cap jump from nearly CA$500 million to CA$1.34 billion after discovering a 4.3-kilometer trend of spodumene pegmatite.
"Some great quote here," said Phillip Thomas, chief executive officer of Spey. "More quote here."
Spey has several projects in the triangle — the area where Argentina, Chile, and Bolivia meet — including its flagship Candela II project. The lithium here is extracted from brines rather than hard rock. This new "white gold," an essential element in electric vehicle (EV) batteries, is helping to power the new green economy.
The Lithium Triangle is also home to some major lithium miners, including Albemarle Corp. (ALB:NYSE) and SQM (SQM:NYSE), which both have market caps over US$20 billion.
That's why Brien Lundin, editor of the Gold Newsletter, called Spey "a smart money play" last fall.
"Spey is at home among these giants because it has a project in Candela II that’s on its way to having a resource — and access to an extraction process that could give it a huge competitive advantage," Lundin wrote.
The company is using a newly developed solvent exchange system developed by the University of Melbourne in Australia called Ekosolve™. Many projects use evaporation to extract the lithium from the brine.
Recent production testing by the University of Melbourne and Ekosolve™ resulted in a 96% recovery rate and the extraction of 99.5% pure lithium carbonate in a matter of minutes.
The Catalyst: A Great Neighborhood
Candela II is in the vicinity of well-known lithium salars like Arizaro, Pocitos, Rincon, Pozelous, Pular, Cauchari, and Oloroz, in the Incahuasi salar in Salta Province in Argentina. Spey has an 80% ownership interest in the project and an option to obtain the remaining 20%.
The company said it has conducted trenching to sample brines and completed geophysical surveys. Five holes were drilled in 2021 to sample the brines and test the aquifer depth.
Last year, the company released a National Instrument 43-101-compliant F1 drilling summary, saying it has extracted 3 x 200 liter samples and completed assays and testing using the Ekosolve™ process.
Lithium carbonate was produced from a sample with a purity of 99.5%, which had 173 parts per million (ppm) lithium.
The company sees a path to production at Candella II in the next 18 to 24 months. The next step is to drill to confirm the size of the resource and then commission a resource calculation.
"With the lithium market providing strong tailwinds, Spey Resources is a lithium play you’ll want to put on your short list of lithium names to leverage the trend," Lundin wrote.
Technical analyst Clive Maund of CliveMaund.com has also recommended the stock.
"All the technical indications on this chart are positive, with price trending higher, moving averages in bullish alignment," he wrote. "We stay long, and Spey continues to be a Buy."
Supply Will Fall Short
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.
Lithium is a soft, silvery metal with highly reactive and flammable properties. In addition to being used in EV batteries and other batteries, it is 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.
Ownership and Share Structure
According to Yahoo Finance, about 2% of the company is held by insiders, including ?? Lawrence Scott Hay with 1.98% or 2.11 million shares. The rest is retail.
Spey has a market cap of CA$4.8 million with 106.7 shares outstanding. It trades in a 52-week range of CA$0.40 and CA$0.045.
The company is covered by newsletter writer Clive Maund and Brien Lundin of Gold Newsletter. Click "See More Live Data" in the data box above to view more of what they are saying.
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