Issue link: http://resourceworld.uberflip.com/i/638235
44 www.resourceworld.com f e b r u a r y / m a r c h 2 0 1 6 mINING B eing in the right place at the right time is often a vital compo- nent on the road to success in the risky mineral exploration sector. Back in early 2009, Guy Bourassa found himself in exactly that position when he got wind of a Québec lithium discovery that had been abandoned in the early 1960s after the industrial chemi- cal element was taken off the United States' strategic minerals list. At the time, Bourassa, President and CEO of Nemaska lithium inc. [NMX-TSXV; NMKEF-OTCQX], was looking for nickel and other base metals in the James Bay area of northern Québec. But on hearing that brokers in Toronto were scouring for lithium projects to finance, Bourassa quickly secured the mining rights to a promising lithium showing on the Whabouchi property, which is located about 300 km northwest of Chibougamau, Québec, near the Cree community of Nemaska. It turned out to be an astute move. Lithium has traditionally been used in a wide range of indus- trial applications, including ceramics, glass and grease. But due to its role as a key ingredient in the production of lithium ion batteries for energy storage and the electric vehicle sector, lithium has emerged as a sought after bright light in an otherwise dismal commodities sector. Investor interest has lately been driven by exploration com- panies touting themselves as potential suppliers to a large scale battery manufacturing plant, which is being built in Nevada and funded by US electric vehicle maker Tesla Motors and its Japanese partner Panasonic Corp. The "gigafactory" is designed to produce lithium-ion batteries for Tesla's vehicles. Slated to reach full capacity by 2020, it is part of the company's plan to build 500,000 vehicles during the next five years. Analysts are predicting that as hybrid and electric vehicles become more affordable, the consumption of lithium will rise significantly over the next decade. Among them is Jon Hykawy of Stormcrow Capital. "Our conservative assumptions suggest lithium demand will more than double by 2025, he wrote in a November, 2015 research report. Accelerating demand is driving up the price of lithium com- pounds (namely, lithium hydroxide and lithium carbonate) which is determined by the purity and chemistry of the material as well as the length of contracts between buyer and seller. When Nemaska Lithium released the results of a feasibility study for the Whabouchi Project in June 2014, lithium carbonate was selling for between US $5,500 and US $5,700/tonne. Lithium hydroxide was priced in the US $ 7,100-US $7,400/tonne range. In 2015, lithium carbonate prices rose 23% to US $8,000/tonne, while the price of lithium hydroxide jumped 25% to US $10,000/tonne. "Until they do their research, people don't realize that the price has been constantly increasing since about 2009 and continues to increase,'' Bourassa said during a recent telephone interview from Québec City. Existing facilities in Shawinigan that will house Nemaska Lithium's Phase 1 Plant and Commercial Lithium Hydroxide Hydromet Plant. Photo courtesy Nemaska Lithium Inc. NEMASkA liThiuM advancing toward production by Peter Kennedy