Nevada Lithium surges on critical minerals extraction partnership with Korea’s Hydro

Nevada Lithium Resources (TSXV: NVLH) shares surged on Wednesday after the company disclosed that it had partnered with South Korea’s Hydro Lithium on the extraction of critical minerals from its flagship Bonnie Claire project.

In its press release, Nevada Lithium said the two parties entered a letter of intent on Sept. 7 related to the use of proprietary extraction technologies developed by Dr. Uong Chon, CEO of Hydro Lithium, for the recovery of valuable elements, including those on the US critical minerals list, from the Bonnie Claire property.

The LOI also includes frameworks on collaborative efforts to recover critical minerals from other North American properties, it added.

Hydro Lithium currently produces battery-grade lithium hydroxide and lithium carbonate with an annual production capacity of 3,600 tonnes at its Geumsan-gun facility.

Nevada Lithium’s CEO Stephen Rentschler welcomed the partnership, highlighting Dr. Chon’s previous involvement in the development of PosLX, the lithium extraction technology currently being used by POSCO. At Hydro, Dr. Chon continued his technical achievements with the development of the CULH (battery-grade lithium chemical production) and CULX (lithium extraction from natural resources) processes, he added.

“The US hosts numerous potential sources of critical minerals, including lithium, many of which may pose challenges to economically viable extraction. Our proprietary technology, CULX, addresses these challenges,” Dr. Chon said in a statement.

Shares of Nevada Lithium rose as much as 23% by midday on the news, giving the Vancouver-based lithium developer a market capitalization of C$46.8 million ($33.7 million).

Economic improvements

Rentschler said his company will be evaluating these technologies and their potential to add to the “strong investment metrics” illustrated by a recently updated preliminary economic assessment (PEA) on Bonnie Claire, a sediment-hosted deposit with mineralization at different depths.

Released in early August, the new PEA incorporates work over the past three years, including the discovery and expansion of the project’s lower zone, characterized by high lithium and boron grades.

The study contemplates an underground operation using a hydraulic borehole mining method producing at a rate of 2.92 million tonnes per year of lithium material at a grade of 4,500 parts per million. This would result in the production of 62,354 tonnes of lithium carbonate (Li₂CO₃) and 129,533 tonnes of boric acid per year over an estimated 61-year mine life.

The production profile, assuming prices of $24,000/tonne for Li₂CO₃ and $950/tonne for boric acid, would give the project an after-tax net present value (at 8% discount rate) of $6.83 billion — a more than fourfold increase over the 2021 assessment — and an internal rate of return of 32.3%. Payback of the $2.1 billion initial capital is estimated at 2.8 years.

“Bonnie Claire has emerged as one of the world’s largest and highest-grade sedimentary-hosted lithium and boron deposits, and remains open for expansion. The potential for even higher grades and volumes could positively impact the PEA economics already demonstrated,” Rentschler stated in an Aug. 6 press release.

Nevada Lithium previously held the project with Iconic Minerals (TSXV: ICM) on a 50/50 basis before consolidating ownership in 2023.