A magnetotelluric survey at Spey Resources Corp.'s (SPEY:CSE; SPEYF:OTC; 2JS:FRA) flagship Candela II project in South America's Lithium Triangle shows a thick low-resistivity area containing lithium brines near the surface, the company announced.
Areas of low resistivity indicate the potential of brine that might host deposits of the battery metal, a key element in the energy transition.
Southern Rock Geophysics completed magnetotelluric (MT) surveys on three lines at the site in Argentina.
"The results show a low resistivity zone that extends to the eastern border of Candela II and extends from Line L7312200 to Line L7309700 a distance of approximately 2.5 (kilometers)," Spey Resources said in a release Friday. "The survey penetrated to 4,000 meters depth. The conductive lithology units show a unit approximately 300 meters in thickness about 50 meters below the surface which is the aquifer intercepted."
Five holes were drilled at the Incahuasi Salar project in 2021. Lithium brine values of 153 parts per million (ppm) and 174 ppm were assayed from two holes, DDH4 and DDH5.
Because of this, Golden Opportunities Newsletter has called Spey "a smart money play."
The company has hired WSP Australia to produce a resource estimate for the property, which counts Jiangxi Ganfeng Lithium Co. Ltd. (002460:CH), Allkem Ltd. (OROCF;OTCMKTS), and Livent Corp. (LTHM:NYSE) among its neighbors.
The Lithium Triangle is also home to some other major lithium miners, including Albemarle Corp. (ALB:NYSE) and SQM (SQM:NYSE), which both have market caps over US$20 billion.
Because of this, Golden Opportunities Newsletter has called Spey "a smart money play."
"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 (Ekosolve) that could give it a huge competitive advantage," it wrote.
The Catalyst: Market Deficits To Widen
A soft, silvery metal with highly reactive and flammable properties, lithium is a major component of EV batteries. It's also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.
The lithium market is expected to grow globally from US$3.83 in 2021 to US$6.62 billion in 2028, a compound annual growth rate (CAGR) of 8.1%, according to a report by Fortune Business Insights.
The lithium market is expected to grow globally from US$3.83 in 2021 to US$6.62 billion in 2028, a compound annual growth rate (CAGR) of 8.1%, according to a report by Fortune Business Insights.
"The growing adoption of hybrid and electric vehicles (EVs), high-drain portable electronics, and energy storage systems has had a huge impact on the growth of the overall market," the report said.
Analysts from Eight Capital also predicted that lithium market deficits will widen into the late 2020s and that those shortfalls will be driven by demand in North America.
The United States' EV penetration of 6% lags China's 26% and Europe's 20%, analysts Anoop Prihar and Alex Riazanov of Eight Capital wrote in a recent research note. But President Joe Biden's administration has committed to a target of 50% of new vehicle sales being EVs by 2030.
"We estimate North American lithium nameplate production capacity will be 262,900 LCE (million tonnes lithium carbonate) in 2026 based on projects that currently have completed a Definitive Feasibility Study (DFS)," Prihar and Riazanov wrote. "Although this is a significant increase from the current North American production capacity of 6,000 tonnes LCE, it's still more than 128,000 tonnes short of what we anticipate will be required by the battery plants. As such, we anticipate the fundamentals underlying lithium demand to remain robust."
A Name to 'Put on Your Short List'
Magnetotellurics measure and map the sub-surface of a project using natural time variations of the Earth's magnetic and electric fields.
The data will be used to define the next exploration well and production well locations, as well as contribute to the resource estimate data, the company said.
The company sees a path to production at the project in the next 18 to 24 months.
"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," wrote Golden Opportunities Newsletter .
"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," wrote Golden Opportunities Newsletter.
Spey said it expected to have a detailed report from Southern Rock Geophysics on the MT survey in the next few weeks.
The company filed a National Instrument 43-101 report last summer, which noted that the project was open for exploration.
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Spey Resources Corp. (SPEY:CSE; SPEYF:OTC; 2JS:FRA)
"Based on the recent results from exploration drilling and geophysical surveys, the aquifer underlying the Candela II concession is saturated with a concentrated lithium brine," wrote the report's author, geologist Michael J. Rosko.
Before completing the inferred, indicated, and measured resource work, one or two exploration wells might be sunk, as well as an 8-to-12-inch pumping well. The company may also complete a Borehole Magnetic Resonance (BMR) geophysics study to measure porosity.
Ownership and Share Structure
Spey trades on the Canadian Securities Exchange under the symbol SPEY and on the U.S. OTC market as SPEYF. Over the last year, it has traded in the range of CA$0.40 to CA$0.035, with a current market cap of CA$4.27 million. Approximately 111 million shares are outstanding, with about 109 million free-floating.
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.
About 4.7% of the company is owned by insiders, including Director Lawrence Hay, who owns 2.11 million shares, and CEO Thomas, who owns more than 2 million shares. The rest is retail.
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- Spey Resources Corp. has a consulting relationship with Streetwise Reports and has paid a consulting fee between US$8,000 and US$20,000.
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- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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