Resource World Magazine

f e b r u a r y / m a r c h 2 0 1 6 www.resourceworld.com 45 Bourassa is a 58-year-old lawyer, who aside from a short spell as CEO of three-wheel vehicle maker T-Rex Vehicles Inc. (2004 to 2007) has spent nearly 30 years in the Québec mining sector. Interest in lithium has drawn investor attention to a handful of companies in the space, including Lithium X Energy Corp., Pure Energy Inc., and lately Nemaska Lithium, which has seen its stock price jump to a high of 47.5 cents from under 20 cents in August 2015. Nemaska Lithium is currently rated a "top pick" in the lithium sector by David Talbot of Dundee Capital Markets. As of January 13, 2016 Talbot's target price for the stock was $1. A 9.5%-owned affiliate of China's Tianqi Group (the world's largest producer of lithium chemicals), Nemaska Lithium sees itself as being several years ahead of its Canadian competitors. That's because Whabouchi is one of only four lithium projects around the world that have the permits in place to allow con- struction to begin. "To be fully permitted, one has to have the definitive feasibility study. One has to have all the environmental permits, and also impact and benefit agreements with all of the stakeholders who will be impacted by the project," Bourassa said. Nemaska Lithium's goal is to become a leading supplier of lithium hydroxide and lithium carbonate to the consumer and automotive lithium-ion battery market, starting as early as late 2017. It hopes to achieve that goal by mining lithium contained in the mineral spodumene, initially from an open pit operation at James Bay, where exploration so far has outlined 27.3 million tonnes of proven and probable reserves, enough material to sup- port 26 years of mine life with a large potential for increase. A concentrator, located at the mine site will be designed to produce 216,485 tonnes of concentrate annually. Those concentrates will be shipped to a hydrometallurgical plant in Shawinigan, Québec, and converted into lithium hydroxide and lithium carbonate. "We will be producing mainly lithium hydroxide because of demand for high powered electric vehicle usage, large scale energy storage and batteries in consumer devices,'' said Bourassa. He said the company has developed a proprietary process to pro- duce high purity lithium hydroxide directly from spodumene, a move that he says will set Nemaska Lithium apart, potentially enabling it to target an industry that desires higher density, lon- ger life batteries that produce less heat. The company also hopes to benefit from a trend towards mass adoption of energy storage batteries. In a bid to mitigate the obvious risks, Nemaska Lithium plans to build a $38 million demonstration plant in Shawinigan. Under the terms of a memorandum of understanding, it will be par- tially funded with a $12 million up-front payment from Johnson Matthey Battery Materials Ltd., a Québec-based unit of U.K. chemicals and technology giant Johnson Matthey Plc. The financ- ing unlocks another $26 million in government funding that will cover costs for three years. The demonstration plant will be built on the same site as a planned commercial facility, which at full capacity would be producing 28,000 tonnes of lithium hydroxide and 3,000 tonnes of carbonate. The CDN $500 million price tag for the entire project includes $200 million to build the mine and concentrator in James Bay and a further $300 million for the hydrometallurgical plant. "It is a once in a lifetime project. You cannot fail to deliver,'' Bourassa said. One of the key players in project financing, he said, will be the Québec government's Plan Nord. Bourassa is confident that he will be able to trigger $100 million out of that program via a direct equity investment. Plan Nord is a multi-billion dollar eco- nomic development strategy that aims to promote the potential for mining, energy, tourism, and social and cultural development in Québec north of the 49th parallel. It was launched in 2011 and aims to create and consolidate over 20,000 jobs in the region. Bourassa said the company is already in advanced discussions with other specialized funds in Québec for part of the debt por- tion of the funding needed to build the project. "For the rest, we are in active discussions with end users, and also bankers who will fund the balance." The customers that Nemaska Lithium is targeting are cathode material manufacturers who supply the battery industry. "There are about 50 cathode material producers around the world that are of interest to us," said Bourassa, adding that they are located United States, Canada, Korea and Japan. However, the Nemaska CEO thinks that at least 50% of the company's production will eventu- ally go to clients located in North America. n TANTALUM NIOBIUM AND RARE EARTH ELEMENTS Be a part of the team TSXv:CCE / FSE:D7H / OTCQX:CMRZF www.commerceresources.com METALS FOR THE FUTURE LES MÉTAUX DE L'AVENIR

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