Voltaic Minerals Corp CEO Darryl Jones on Lithium from Clastics in the Paradox Basin
Voltaic Minerals Corp (CVE:VLT) (OTCMKTS:VTCFF) (FRA:2P61) CEO Darryl Jones joins us for a discussion on his company’s proposed extraction of lithium from deep clastic formations in the Paradox Basin in Utah.
James West: Darryl, thanks for joining us today.
Darryl Jones: Appreciate it. Thanks very much for having me, James.
James West: Darryl, let’s start with an overview: what’s the value proposition for investors in Voltaic?
Darryl Jones: James, we’ve been working on a project in the historic Paradox Basin with some of the highest lithium grades from historic values reported, and expect to be into a potential sampling program here in very short order.
James West: Wow, okay. So this is lithium from salars or from brines?
Darryl Jones: No, we’re working from existing salt beds in what are called plastic units in the Paradox Basin. So they’re similar to a salar, but much deeper because they formed tens of thousands of years ago.
James West: Okay. So what kind of depth are we talking here?
Darryl Jones: Our target formation is at about 6,600 feet, and we have, like I said, quite a bit of historic data from oil and gas drilling that appears to these zones, and seeing some phenomenal brine flows.
James West: Okay. So what kind of lithium grades are we talking?
Darryl Jones: In the known area, from, say, 170-180 mg per litre all the way up to 1700, from the same zone that we’re targeting at that 6,600 foot depth.
James West: Okay. So that sounds like a rather unique approach to the entire lithium space. How are you going to extract the lithium, and how are you going to purify the lithium?
Darryl Jones: Well, we understood very quickly with the historic fluid analysis that we would need a non-conventional production method, so we’ve been working with one of our directors who came on about three months ago, Tom Currin, who’s a chemical engineer. He’s been sort of teamed up, I guess you could say, with some of the Department of Energy chemists, where they have developed a sort of novel way to put together existing membrane technologies, nanofiltration and water treatment programs to effectively remove lithium out of these, what we’re calling super-saturated brines, at a reduced cost. And from there, produce a saleable product, i.e. either a lithium chloride for carbonate or hydroxide use, or go down the path of building a carbon plant ourselves and begin selling into what is the market of lithium carbonate.
James West: Right. Okay, so it sounds to me like 6,600 feet in depth is a scary number coming from the mining space as I do. Nobody produces anything from 6,600 feet except possibly in South Africa at Red Lake, maybe. So is this a liquid extraction technology that will bring it to surface?
Darryl Jones: No. so one of the key caveats of the project is, because it’s at such depth, it’s under pressure, and it’s at temperature. So the depth is actually going to work in our favour, from what we understand, whereby it will just somewhat be squished to the surface in the crudest sense. So at the depth we’re at, we’re currently seeing that it’s double the hydrostatic pressure you’d normally see, so there’s potential for this just to flow out of the ground and what we believe is that it’s a natural aquifer, which means it’s an ‘unlimited’ water source until we confirm it, potentially flowing through this salt bed and just continually refreshing.
And as I said, it could be a very, very cheap way of extracting what would be this brine from that depth. So, somewhat scary traditionally, but what we see is a potential value opportunity.
James West: Okay. And so what does your developmental timeline look like, going forward?
Darryl Jones: Well, we just had some news out this week, James, on the process. We’ve contracted what is Lithium Selective Technologies, our partner, to begin early-stage work to determine some of the cost metrics associated with what our process would be, and we expect to have a full update out probably in about a month to two months; once we get the raw data back, we can go through it. The goal is to be on the project here as late as September, with an idea to sample this thing in the order of about 20,000 litres, and by then, we’ll have Phase II development work beginning whereby we can start funnelling our own brine into this development process. And you know, everything goes to plan, we could be putting out some qualification samples early 2018, let’s say, for customer validation.
James West: Okay, interesting. So how much money have you raised to date, and how much have you put into this technology and acquisition plan? And how much are you going to need to raise to get to profitable production?
Darryl Jones: We just closed a $900,000 financing, and it’s great that you asked that, because one of the majority of that placement was done via one gentlemen who’s involved on a private equity side, a commodity based London-headquartered commodity – excuse me, a private equity group that wants to – they want to be a big part of this lithium space, and they feel like our project is going to be their cornerstone investment. So we’re just putting the finishing touches on what needs to be done over the next, call it 18 months.
Realistically, we do have enough capital here for Phase I, Phase II and a sampling program, which will take us into 2018, call it, whereby we’re going to need, I’m going to say probably another $2 million to $3 million to come up with our side or our potential of what would be a much larger drill program.
James West: Okay. How much does it cost to drill a hole to 6,600 feet?
Darryl Jones: Well, we’ve costed it roughly around 1.2 million. Now, that’s give or take. If it goes well, and we’re talking about a seven-inch cased oil and gas production well.
James West: Okay, so I guess under pressure, the driving engine is just the aquifer body itself, so you don’t have to worry about pumping it up, and what is the size of your land package again?
Darryl Jones: We’ve got 4,200 acres.
James West: Okay. So you have the mineral rights from surface to that depth?
Darryl Jones: We do. We have the mineral rights to everything outside of oil, and load claims.
James West: Okay. Is there anybody producing lithium from this type of a source geologically, anywhere in the world right now?
Darryl Jones: No. This is all brand new, virgin ground. It’s what we’ve sort of coined as non-conventional. We expect that there will be more of this making its way to the forefront, but we’re pretty excited about breaking into a brand new, I guess you could say, market.
James West: Right. Okay, Darryl, so what are the events and the milestones that you’re going to cross in the next 6 to 12 months that are going to be indicative of you achieving your objective?
Darryl Jones: Well, James, obviously we want to cross the process threshold. Phase I and Phase II are going to be very indicative of what we potentially have here; it could be a massive paradigm shift. And also, the project itself. I mean, nobody has sampled these plastic units for this type of brine. So a bulk sample in the order of, say, 20,000 litres would be absolutely key to us unlocking the potential to what this project is.
James West: And when will that happen?
Darryl Jones: We expect no later than September 15th, is what we’re targeting.
James West: Oh, okay. So that’s this year.
Darryl Jones: Yes.
James West: Great. And so if that’s successful, I imagine that you will seek to raise the capital you need to get some more holes drilled?
Darryl Jones: Yeah. We’re planning for between five and ten on the project. I mean, we’ve roughly put together some volumetrics on one hole being able to put forward anywhere from 1,000 to 2,000 tonnes per year of lithium carbonate, based on a hypothetical 300 mg per litre, but obviously all this stuff needs to be confirmed. So you know, ten holes puts us in 15,000 to 20,000 tonnes per year lithium carbonate production scenarios.
James West: Okay. Now, in regards to your filtration process, there are a number of entities globally who are pursuing a concentration through filtration and evaporation process that eliminates the 18-month timeline that is typical in the salars of South America. How close are you to being confident that the direction you’re going with that technology is the right one, and what have you got behind that to sort of back up that confidence?
Darryl Jones: Great question. We’ve got a team, as it stands right now, with roughly 85 years in the lithium separation/water treatment technology, and what we’ve done is we’ve assembled these guys to put together what’s currently known in the space for water treatment, and what’s not sort of at the forefront, to come up with a novel way of producing these brines. We’re very confident, obviously, in our team members; Tom Curran, our project manager, has just been quoted on the news release saying that he’s seen some very strong numbers come through this. We expect that this could be a paradigm shift 100 percent in terms of being able to produce brines from these super-saturated mixtures.
And our goal is not to cut the timeline down; our goal is to not focus on the impurities, but focus on the lithium. A lot of current technologies are focused on cutting the timeline down, whereas we would rather selectively remove the lithium, leave the impurities in there, and have a lithium stream that comes out, even if it takes six months, we’re still beating the 18-month timeline. But we want to do it at a cost-effective measure that currently works in an environment where maybe lithium comes off. And you know, the price comes off, and we can still make money.
James West: Okay. Excellent. Okay, well that’s a great introductory podcast, Darryl. Let’s leave it there for now and I’ll come back to you in a quarter’s time and we’ll see how you’re making out. Thanks very much for your time today.
Darryl Jones: James, appreciate it.