This article is a sponsored feature from Mining.com.au partner Future Battery Minerals Limited. It is not financial advice. Talk to a registered financial expert before making investment decisions.
As the world transitions to clean energy and seeks to reduce its global carbon footprint, there is burgeoning demand for a range of future-facing commodities to come online.
Lithium is one such future-facing commodity. It’s a key component in hybrid and electric vehicle (EV) batteries, electronic devices such as smartphones and portable computer batteries, as well as battery storage power stations that will help reduce carbon emissions on the global road to decarbonisation.
Future Battery Minerals (ASX:FBM) is looking well ahead when it comes to its growth strategy, which is being underpinned by an increased focus on lithium, particularly given the recent sale of its majority owned Nepean Nickel Project.
The future of the junior exploration company is centred on new future-facing assets — the Kangaroo Hills Lithium Project (KHLP) in Western Australia and the Nevada Lithium Project (NLP) in the US.
Future Battery Minerals operates and majority owns 80% of Kangaroo Hills as a joint venture with Lodestar Resources (ASX:LSR), which retains 20%. The KHLP is a new lithium discovery made in December 2022.
The company also recently acquired an 80% interest in the Nevada Lithium Project from Nevada Australia, with the latter retaining a 20% interest. The NLP consists of 4 key prospects – Traction, San Antone, Heller, and Lone Mountain, comprising 65km-square of ground considered ‘highly prospective’ for larger sedimentary-hosted lithium deposits.
Future Battery Minerals is very much focused on the future and as Technical Director Robin Cox explains to Mining.com.au, the company sees ‘strong potential’ to be a major player in the battery minerals space.
“We’re optimistic about the future of the battery minerals space”
“We’re optimistic about the future of the battery minerals space. Commodity prices have started to behave more in line with supply-demand models, with significant demand expected over the coming years from the increased global shift to EVs.
We believe that on the macro level for lithium, it’s very positive, hence why we’re aggressively moving ahead with the exploration of our 2 lithium projects. We have a significant work program planned for the next 12 months.”
Future Battery Minerals is poised to be an important player in terms of helping the world meet surging demand for the raw materials required for the transition to decarbonisation. However, its legacy nickel exposure will continue to play an integral role in the years ahead.
Cox tells this news service the company’s ‘high-grade’ Saints Nickel Project in Western Australia, in particular, is fundamental to the company’s future “as a development story in the background”.
Leading the transition to decarbonisation
As the Technical Director explains, at the foreground is the Kangaroo Hills Lithium Project in Western Australia and the Nevada Lithium Project in the US.
“To reiterate, the future for the company is all about the 2 significant lithium projects we added to our portfolio, although we’ll still maintain and continue to develop our nickel assets in the background.”
Earlier this month, Future Battery Minerals reported its 80% owned subsidiary, Eastern Coolgardie Goldfields, entered into an agreement with privately held Rocktivity Nepean for the latter to buy certain Nepean Nickel Project tenements for $10 million in cash.
Future Battery Minerals holds 80% of the total issued share capital of assets, and the remaining 20% is held by Goldfellas, a wholly owned subsidiary of its JV partner Lodestar Minerals. The sale will net Future Battery Minerals $8 million.
Cox says this capital will be deployed into further exploration at its Nevada and Kangaroo Hills lithium assets.
As the Technical Director notes, Future Battery Minerals believes the timing is right and the sale proceeds and resulting strengthened cash reserves allow it to aggressively progress lithium exploration.
“From the sale, we’re funding the commitments required on the 2 lithium projects. For a variety of reasons, it was making it difficult to put the required amount of work into Nepean because it wasn’t a straightforward exploration play. It is an advanced nickel project. There is an interesting Mineral Resource there that is JORC-2004 compliant only with some difficulties, and therefore we felt that it better suited a miner that could get it into operation quickly.
“The deal terms were obviously very favourable to Future Battery Minerals, giving us that cash position now to leverage our lithium assets”
The deal terms were obviously very favourable to Future Battery Minerals, giving us that cash position now to leverage our lithium assets.”
In the forthcoming 12 months, the company is undertaking a series of drilling programs at both the Kangaroo Hills and Nevada lithium assets.
The Technical Director notes that recent results from both projects have validated the company’s decision to change both its name and strategic focus.
“At Kangaroo Hills, we did a phase one RC program and hit 29m at 1.36% lithium oxide and confirmed it was spodumene-bearing, so now we’re stepping out from that. We’ve been moving into diamond drilling too, but we see, essentially, a number of drilling programs over the next 6 to 12 months focused on that particular area as we aim to discover further LCT pegmatite units within that ground.
In Nevada, it’s a similar story. We completed a maiden RC drilling program there in January this year. We had quite an outstanding hit of 109m at over 700ppm lithium from 135m depth.
It’s a very different mineralisation style there with lithium hosted in the softer sediments, which allows us to consider and potentially develop a lower level of lithium compared to the hard rock. The initial program very much proved that the holding that we have in that area of Nevada does host lithium claystones.
So, we’ll be doing follow-up drilling in Nevada, stepping out around that initial discovery hole, and then moving through our additional prospects within that project.”
The company only targeted 2 prospects in that first round of drilling at Nevada. It has further prospects to test in upcoming follow-up work via staged exploration programs over the next 12 months.
The Nevada Lithium Project is an exciting addition to Future Battery Minerals’ portfolio, giving the company exposure to lithium claystones. As Cox explains, it is attractive from an investment and mining perspective, as such deposits will form an important part of the US strategy to develop a domestic supply of lithium.
Nevada hosts some of the largest lithium deposits in the US and is a mining friendly jurisdiction, with the state recently awarded the top position in the annual Fraser Institute survey as the top jurisdiction in the world for investment based on the Investment Attractiveness Index.
Hopping ahead of the pack
Back in Western Australia, on 19 May Future Battery Minerals announced that privately held Minsol Engineering has been appointed as the lead metallurgical and engineering consultant at the Kangaroo Hills Lithium Project.
Following the initial discovery in March 2023 of a spodumene-bearing pegmatite, the company is now moving to early stage metallurgical testwork in order to understand the characteristics and processing requirements of the mineralised pegmatite, as well its recovery potential.
Cox says: “We’re diamond drilling at Kangaroo Hills, and we plan to be drilling again in Nevada in the second week of June. So that’s all on track. But we’re going to a much more expansive exploration program at Kangaroo Hills — a wide space geophysical program.
“Ongoing drilling and metallurgical testwork is really going to take most of our attention over the next 12 months, and that’s really what these Nepean sale funds are going to be useful for”
Ongoing drilling and metallurgical testwork is really going to take most of our attention over the next 12 months, and that’s really what these Nepean sale funds are going to be useful for.”
Minsol is managing the metallurgical and mineralogical testwork on a recently acquired diamond core sample that intercepted a spodumene-dominant pegmatite identified in drillhole KHDD001.
The full testwork schedule will be finalised after mineralogical scanning is complete. Testwork will consist initially of non-destructive core scanning; sample characterisation and mineralogical assessments; stage crush and screening for coarse and fine mineral processing; heavy liquid separation (HLS) of the coarse (+850µm) fractions to determine amenability to froth; Dense Media Separation (DMS); and sighter flotation tests to determine amenability to froth flotation.
Metallurgy and mineralogy will form part of the company’s ongoing technical studies into the lithium mineralisation at Kangaroo Hills.
The Technical Director adds that given the early exploration success at Kangaroo Hills, Future Battery Minerals moved quickly to diamond drilling in order to understand the potential of this ‘significant’ discovery.
He says the DD core samples provide the company’s geological team with the ability to observe the pegmatite mineralisation with a level of detail not possible in RC drill chips and allows for the accurate logging of the lithium mineral spodumene, which has been identified as the dominant lithium mineral in fresh rock.
“We’ve got a busy 6 to 12 months ahead, but for the company now, the future looks pretty exciting”
Cox adds: “We’ve got a busy 6 to 12 months ahead, but for the company now, the future looks pretty exciting.”
Two tier-one mining jurisdictions
The Technical Director says in North America, there’s a lack of hard rock lithium occurrences, which means production to date has predominantly been generated from brines.
Cox notes that in order to meet global demand, not only do more lithium projects need to come online, demand is growing at a rate whereby many of these mines will need to be large-scale operations.
“What we’re seeing there is a lot of investment from the automotive industry … from the car makers, battery makers, and also from the US Government via the federal Inflation Reduction Act (of 2022). So, from our perspective in terms of lithium, it’s a very important space.”
The Inflation Reduction Act is the most significant climate legislation in US history, offering funding, programs, and incentives to accelerate the transition to a clean energy economy and is expected to drive significant deployment of new clean electricity resources.
“Like WA, Nevada is one of the better safe mining jurisdictions to be in, and that’s been our approach — picking and exploring and developing projects that are in a safe mining jurisdiction”
Cox says that while the state of Nevada was recently ranked first in global mining jurisdictions, he still believes that Western Australia is one of the best regions for an explorer to be operating in. Having exposure to both tier-one jurisdictions is an added benefit for Future Battery Minerals from both a mining and investment proposition.
“Like WA, Nevada is one of the better safe mining jurisdictions to be in, and that’s been our approach — picking and exploring and developing projects that are in a safe mining jurisdiction.”
Saints Project: A heavenly asset
Meanwhile, at its Saints Nickel Project in Western Australia a Scoping Study has been completed, and as part of upcoming Feasibility Studies, the company will assess a range of options on how to realise value from the project. It will determine whether to pursue an owner-developer model, if bringing on board a strategic partner is preferred, or whether another option best suits commercialising the asset.
“What we wanted to achieve from the Saints Scoping Study was to determine whether the existing Mineral Resource Estimate provides enough upside to generate a return on investment from the operation and continue deep exploration to increase the mineral resource at depth.
We’ve already found that exploring from surface is becoming quite costly because of the depths of the orebody. These Feasibility Studies will help us determine the best course of action.”
As Cox explains to Mining.com.au, while the development of Saints is important and will underpin Future Battery Minerals’ strategy moving forward, the lithium assets are poised to deliver exciting results and development options for the company.
Write to Adam Orlando at Mining.com.au
Images: Future Battery Minerals Ltd