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Lithium Energy Products Inc (2)
Symbol LEP
Shares Issued 8,618,894
Close 2018-05-02 C$ 0.40
Market Cap C$ 3,447,558
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Lithium Energy to buy Vanadium Ridge property

2018-05-02 10:06 ET - News Release

Mr. James Walker reports

LITHIUM ENERGY PRODUCTS ACQUIRES VANADIUM RIDGE PROPERTY

Lithium Energy Products Inc. has signed a definitive agreement for the acquisition of a 100-per-cent interest in the Vanadium Ridge property from Darren Blaney, Carmen Blaney and Brayden Blaney. The Vanadium Ridge property consists of 20 mining claims covering over 5,200 acres, and is situated 40 minutes by road from Kamloops, B.C.

The property is a vanadium-rich magnetite deposit, discovered by a provincial government airborne magnetic survey, which found an intense magnetic anomaly near Barriere. Follow-up surface mapping and ground geophysics resulted in well-defined magnetic anomalies and a vanadium-rich magnetite deposit which is exposed at surface.

A preliminary diamond drill program was completed in November, 2009, drilling at depth for an aggregate of 658 metres, and identified multiple massive magnetite seams and pods. All drill holes intersected broad intervals of magnetite mineralization, with many ending in magnetite-rich mineralized zones. This preliminary drill program not only confirmed significant magnetite mineralization at depth, but also indicated that many other additional anomalies identified on the property may have the potential to host vanadium-rich magnetite mineralization.

Initial metallurgical testing of the magnetite/vanadium samples by ALS, Australia, produced concentrate averaging 67 per cent iron (Fe203), 93 per cent magnetite (Fe304) and 0.74 per cent vanadium, indicating the potential to produce a concentrate for direct shipping material. These assays also indicate that the magnetite is coarse-grained and soft, and that silica is not bound in magnetite. Crushing produces a good liberation of silica, resulting in a high-grade magnetite concentrate, even in samples with disseminated magnetite (1).

Figures associated with this news release are available on-line.

James Walker, chief executive officer of Lithium Energy, said: "This is a great find and acquisition. As the market shifted its focus to vanadium we examined many potential vanadium projects, but none had the surveying, geophysics, data and scope for expansion as this project. The vanadium spot price has increased almost six times in two years, from $2.5 per pound in 2016 to over $14 per pound today. The use of vanadium in redox batteries, which have many favourable qualities (2) compared to other battery types, has put pressure on supply of the element.

"The Vanadium Ridge magnetite outcrops at surface are well suited for quarrying and open-pit mining and will be crushed and concentrated by magnetic separation. The logistics of the property are also excellent; with nearby rail, high-power transmission lines, roads running through the property and a shipping port on the west coast of British Colombia within 300 kilometres. The aerial surveys show intense magnetic anomalies stretching over seven km, which our claims cover, giving us huge potential for expansion."

The market has also not been slow in recognizing vanadium as a hot commodity. Forbes noted that, "The latest, greatest utility-scale battery storage technology to emerge on the commercial market is the vanadium redox battery." A recent Bloomberg article noted that the vanadium pentoxide price soared more than 130 per cent in 2017, outperforming better-known battery components like cobalt, lithium and nickel. Bank of Montreal published recent research noting that Chinese vanadium pricing would see significant further upside as the market adjusts to lower Chinese shipments due to the upgrade of Chinese rebar standards and the growing adoption of vanadium redox batteries. Fittingly, the vanadium pentoxide price has increased 40 per cent in 2018 to date, with the European V2O5 price at $14.10 (U.S.) per pound, surpassing the Chinese V2O5 price of $13.80 (U.S.) per pound, an anomaly not often seen, demonstrating global shortage of vanadium inventories.

Under the terms of the agreement, the company will make a $35,000 cash payment and issue 2.25 million common shares to the vendors. The company also intends to raise capital by way of a private placement within 60 days of the signing of the agreement. Upon completion of the financing, the company will make an additional $100,000 cash payment to the vendors and issue 250,000 common shares, and in any event, these additional considerations will be made no later than 60 days from the signing of the agreement, in addition, the vendors will retain a 1-per-cent net smelter returns royalty on the property. In the event that the additional considerations are not made within 60 days from the signing of the agreement, the agreement will be terminated. The transaction is subject to regulatory approval and closing is expected following receipt of approval.

Raul Sanabria, PGeo, is a qualified person as defined by National Instrument 43-101 and has reviewed and approved the technical contents of this news release. Mr. Sanabria is not independent to the company as he is a shareholder. The property has not been the subject of a National Instrument 43-101 report.

About Lithium Energy Products Inc.

Lithium Energy Products has three highly prospective properties in Kamloops, Nevada and Arizona.

(1) The preliminary diamond drill program, initial metallurgical testing and aerial surveys conducted on the Vanadium Ridge property are historical and any estimates are historic estimates as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. No other resource estimates are known to Lithium Energy. Qualified persons working on behalf of Lithium Energy have not done sufficient work to classify the historical estimates, and as a result Lithium Energy is not treating the historical estimate as a current mineral resource.

(2) The main advantages of the vanadium redox battery are that it can offer almost unlimited energy capacity simply by using larger electrolyte-storage tanks, it can be left completely discharged for long periods with no ill effects, if the electrolytes are accidentally mixed, the battery suffers no permanent damage, a single state of charge between the two electrolytes avoids the capacity degradation due to a single cell in non-flow batteries, the electrolyte is aqueous and inherently safe and non-flammable, and the generation three formulation using a mixed-acid solution developed by the Pacific Northwest National Laboratory operates over a wider temperature range, allowing for passive cooling.

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