This article is a sponsored feature from Mining.com.au partner Q2 Metals. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Canadian lithium explorer Q2 Metals (TSX-V:QTWO) is not one to do things in halves. In fact, this Vancouver-based company is one tale of ‘twos’.
With its TSX Venture Exchange ticker symbol QTWO, Q2 Metals is the company’s second incarnation – it was formerly called Queensland Gold Hills Corp. In more symmetry, executing two lithium project acquisitions over the past two years have transformed the company – its share price doubling during the past month.
It’s the company’s latest acquisition – the Cisco Lithium Property in Quèbec, Canada that has the team doubly excited and it is planning a promotional tour to tell prospective investors about its tale of twos so far. Q2 Metals will be attending conferences in North America and Australia over the Fall and Winter in an informal roadshow.
“The Cisco lithium property is shaping up to be one of the most exciting projects in Canada for lithium and the potential is enormous. Despite where lithium is sentiment wise, if you can pick a winning company in a downmarket, the rewards can be much greater,” says Q2 Metals President and CEO Alicia Milne.
Tale of two sides
Acquired in February 2024, the Cisco property is located less than 10km east of the Billy Diamond Highway, and comprises 222 mineral claims over 11,374 hectares.
Cisco’s vendors were the same group from which Q2 Metals also acquired the Mia Lithium Project in December 2022. Leveraging off that relationship, Milne says in this past February, Q2 Metals was able to come to an agreement on Cisco in fairly quick order – and it hasn’t looked back since.
“In April we had our team re-logging and re-assaying the drill core from holes 1-6 that the vendors had completed in 2023. Then at the beginning of June, we mobilised into a camp nearby and were up and running our drill program as well as conducting mapping and sampling field work,” she explains.
“We’ve just scratched the surface of the property as we’ve only tested approximately 18% of the entire area“
“It all came together fluidly and quickly and here we are, now in October, with 17 drillholes completed and wrapping up field work for the season. We do have lots of work ahead of us but are very encouraged by what we are seeing at Cisco and the assay results that are coming in.
“Cisco continues to surprise us – not only with what we’re seeing in both the visual drill core and the drill core assays – but also with the actual scale of Cisco. With the 17 holes that we have drilled this year, we have taken the size of Cisco from what we originally knew from the vendors as being an area of approximately 500m by 250m to now 850m by 600m by stepping out with every drillhole.
“We’ve just scratched the surface of the property as we’ve only tested approximately 18% of the entire area. As we continue to compile data, we’re excited by what we are seeing at Cisco.”
Doubling down: Opportunistically assessing options
Having already executed two M&A deals that have transformed its portfolio, Milne says Q2 Metals will continue to opportunistically assess growth options.
“We are always keeping an eye on the overall lithium market as well as our space as a junior company,” she tells this news service.
“As a junior explorer with a discovery like Cisco, we feel we are in a unique position as Cisco has easy access to infrastructure and most importantly, Cisco has scale. We recently completed a financing of C$6.8 million and believe that it’ll give us the ability to move Cisco ahead despite the market.
“The supply demand case for lithium is well understood – we need more of it throughout the world but especially in North America and we are delighted to potentially be a big part of that conversation in the future.”
The Australian Government’s Department of Industry, Science and Resources’ (DISR) latest issue of its Resources and Energy Quarterly: September 2024 notes the global market surplus is expected to narrow following suspension of some production, including a major Chinese lepidolite mine in September 2024.
However, global lithium demand is forecast to rise by 17% a year between 2023 and 2026, driven by rising electric vehicle (EV) adoption.
In lithium carbonate equivalent (LCE) terms, global lithium consumption is forecast to rise by 17% per year to 1.6Mt in 2026, with demand from EVs driving the bulk of the rise.
Seizing, not ceasing opportunities
Milne says Q2 Metals is well-positioned to be a significant player in the global lithium space with Cisco, which is host to mineralised spodumene-pegmatite. Around 50% of the world’s lithium comes from Australia alone with this type of deposit.
In terms of hard-rock deposits, a spodumene pegmatite deposit has a well-known milling and processing technique that can be applied from one deposit to another. The CEO notes there are some complexities unique to each deposit, but generally they can be straightforward.
“Compare this to a clay-hosted deposit in the western United States where the lithium recovery process is much more complicated. Another prominent source of lithium globally is brine-hosted,” she explains to Mining.com.au.
“Typically, these are in high-elevation regions of Argentina and Chile. These brines have a long history of production, although there are water-use concerns in very arid environments.
“Lastly, an upcoming and interesting potential source of lithium might be brines located in former oil producing areas. But to my knowledge the technology to commercially extract the lithium, has not yet been proven.”
Chile’s lithium extraction is set to rise in level terms, but its share of global extraction is forecast to fall from 23% in 2023 to 13% in 2026 as other lithium producing countries such as Canada are expected to add capacity much faster.
Argentina’s lithium extraction is forecasted to rise from 50,000 tonnes in 2023 to 166,000 tonnes by 2026 – about 10% of global extraction, as a series of large brine operations come online.
Argentina holds 12% of global lithium reserves and has access to lower cost brine resources compared to Australia’s more costly hard rock resources.
Companies continue to invest in new lithium projects in Argentina, despite the fall in lithium prices, with investors encouraged by the Argentinean government’s devaluation in the Argentinian Peso and promises to lift capital controls.
Amid this backdrop, Milne notes there is an opportunity for Q2 Metals and for Canada as a nation to lead the way with bringing the next generation of lithium projects online.
“Right now, most say there is a slight oversupply (of lithium), however, everyone agrees that a deficit is coming, largely driven by EVs and the ever-growing static storage market,” she adds.
“Both Canada and the US are spending billions of dollars to invest in the lithium supply chain, and we believe Q2 Metals could be a major part of the supply puzzle in the future.”
Window of opportunity to arise this Fall and Winter
Having drill-tested just 18% of the total area of interest based on the surface work, Cisco is showing ‘company-maker’ potential and as such, Q2 Metals is not taking its foot off the accelerator heading into 2025.
As Milne explains, given the very wide intervals drilled so far, “we believe that Cisco has world-class potential”. On top of that, the project is relatively close to road and rail infrastructure within the incredibly supportive jurisdiction of Quèbec, she says.
Situated 150km north of Matagami – a small town that contains the closest rail link to much of James Bay – Cisco is located within the greater Nemaska Community lands of the Eeyou Istchee Territory.
The property sits along the Frotet Evans Greenstone Belt, which consists of a volcanic package dominated by mafic to felsic metavolcanic rocks of the southern James Bay Lithium District – the same belt hosting Vision Lithium’s (TSX-V:VLI) Sirmac and Sayona Mining’s (ASX:SYA) Moblan lithium deposits.
Additional assay results from Q2 Metals’ summer drilling program are continuing to confirm the potential and scale of Cisco, as reported by this news service.
During the spring and summer period, 17 holes for 6,359.7m of drilling took place to explore the connection of the wide, continuous pegmatite zones encountered in holes CS24-010 and CS24-018.
Hole 10 demonstrates that there is potential for significant grade as well – 120.3m at 1.72% Li2O including 19m at 2.06% Li2O and 13m at 2.25% Li2O. Analytical results on hole 18 confirmed an intercept of 215.6m @ 1.69% Li2O , of which included 64.6m @ 2.29% Li2O.
Throughout the campaign Q2 Metals intersected wide continuous intervals of spodumene pegmatites, with the longest interval being 347.1m in hole 21. All drillholes have intersected pegmatite with visual indications of spodumene mineralisation identified. Core assay results for six drill holes remain to be reported, including the 347.1m interval in hole 21.
Milne says the assays being received so far have validated the potential and scale of Cisco as that of a larger mineralised system which is continuing to show its “world-class nature”.
The company is currently analysing all of the data it has received thus far, has started additional geophysical and metallurgical work and is planning its Winter drill program.
Write to Adam Orlando at Mining.com.au
Images: Q2 Metals & Rochelle Padua
