Acquisition of Sierra Blanca project in Argentina complete
Austral Gold Limited and New Dimension Resources have closed the acquisition of New Dimension’s Sierra Blanca Gold-Silver Project in Argentina's Santa Cruz Province.
The transaction will enable Austral to acquire an initial 80 percent interest in Sierra Blanca SA, that owns the Sierra Blanca project for a total of £618,364 in cash and work commitments, with a follow-on option to purchase the remaining 20 percent for an additional £1.77 million in cash and work commitments. Austral plans to fund the cost of the transaction from cash flow generated from operations.
"We are pleased to add Sierra Blanca to our portfolio of attractive exploration projects in Argentina. The project complements our Pingüino project and expands our exploration footprint to over 17,000 hectares over the two projects," says Stabro Kasaneva, chief executive officer for Austral Gold. "Both projects are located adjacent to each other in the geological zone of Deseado Massif in the Santa Cruz Province, one of the most prominent precious metal regions in the world including world-class deposits such as Cerro Vanguardia 1."
"I am pleased to be reporting the closing of the Sierra Blanca Transaction, after an extended Due Diligence process which had been significantly impacted by Covid-19 lockdowns and travel restrictions in Argentina. We are now looking forward to Austral initiating field activities at Sierra Blanca and continuing to work towards unlocking the full economic potential of the combined Sierra Blanca-Pingüino district," adds Eric Roth, CEO of New Dimensions.
With the closing of the Sierra Blanca Transaction, New Dimension now has three projects in which day-to-day operations are managed by Joint Venture partners (Sierra Blanca, Domain, and the recently announced Joint Venture with Ethos Gold Corp. at the Savant Lake Project), Roth says.
“This will allow us to focus on advancing our recently acquired, high-grade Løkken and Kjøli copper projects in Norway and the Southern Gold Line project in Sweden towards drilling. I look forward to keeping the market informed on advances at our Canadian and Scandinavian projects, as well as shortly providing an update on our Las Calandrias project,” he continues.
In May 20218, New Dimension acquired a 100 percent interest in the Sierra Blanco gold-silver project from Sandstorm Gold Limited, as part of the acquisition of a larger portfolio of gold-silver projects – Las Calandrias, Los Cisnes, and Sierra Blanca – all located in the highly prospective and mining-friendly Santa Cruz Province.
The Sierra Blanca project was previously controlled by Mariana Resources Limited ("Mariana') and consists of approximately 7,000 Ha (70 square kilometres) of mining claims.
Previous work at Sierra Blanca had mostly been focused on the E-W-trending Chala-Achen and Lucila vein systems, where high-grade silver values had been derived from surface channel sampling (including 9.4m @ 2,362 g/t Ag at Chala-Achen.
During 2019, exploration activities at Sierra Blanca were focused on trenching and sampling on the NW-trenching Ana (and Ana Splay), Tranquilo, and Laguna "vein fields" with targets for follow-up drilling having been defined. A total of 10 target areas have been identified for further work at Sierra Blanca (typically dilation zones associated with the intersection of mineralised NE- and NW-trending vein/fault systems), and only four of these have been partially tested by historical drilling (a total of 122 holes for 15,924 m, completed mostly in the Chala-Achen-Lucila corridor).
All of the major vein systems known in the eastern portion of the Sierra Blanca are interpreted by New Dimension to extend into the adjacent Pingüino property.
New Dimension has also entered into agreements with both Iamgold Corporation (Iamgold) and Sandstorm Gold Limited (Sandstorm) that provide SBSA with options to acquire one-half of their respective royalties on the Sierra Blanca project.
The agreement with Iamgold provides SBSA the option to acquire one half (0.75%) of its 1.5% NSR for CAD $750,000 at any time prior to the commencement of commercial production. In further consideration of this agreement, and subject to approval by the TSX Venture Exchange, New Dimension will issue Iamgold 500,000 NDR common shares.
The agreement with Sandstorm provides SBSA the option to acquire one-half (1 percent) of its existing 2% NSR for CAD $1,000,000 at any time prior to the commencement of commercial production.
Lithium producers bullish as EV revolution ramps demand
Rising demand for lithium is stoking prices for the electric vehicle battery metal, fueling long-delayed expansions that still may not produce adequate supplies that automakers need to meet aggressive production plans.
Growing industry optimism from higher lithium prices is a change from last year when funding for mines and processing plants dried up during the pandemic.
Albemarle Corp, Livent Corp and other producers are scrambling to make more lithium, but some analysts worry the recent price jump will not spur a big enough expansion to meet a planned wave of new EV models by mid-decade.
Since January, General Motors Co, Ford Motor Co LG Energy Solution and SK Innovation Co, along with other automakers and battery parts manufacturers, have said they will spend billions of dollars on EV plants.
U.S. President Joe Biden has proposed spending $174bn to boost EV sales and infrastructure. The European Union has similar plans, part of a rush to catch up with global EV leader China.
Those moves have helped an index of lithium prices jump 59 percent since April 2020, according to data from Benchmark Mineral Intelligence, a commodity pricing provider.
The rising demand “reflects what feels like a real and fundamental turning point in our industry,” said Paul Graves, chief executive of Livent Corp, which supplies Tesla Inc. On Monday, it said it would more than double its annual lithium production to 115,000 tonnes.
Graves warned, though, that “it will be a challenge for the lithium industry to produce sufficient qualified material in the near and medium term.”
Albemarle, the world’s largest lithium producer, aims to double its production capacity to 175,000 tonnes by the end of the year when two construction projects are complete. Albemarle's Q1 profit beat expectations thanks to rising lithium prices. Chile’s SQM, the No. 2 producer, said its goal to expand production of lithium carbonate by 71 percent to 120,000 tonnes should be complete by December.
Australia’s Orocobre is paying $1.4 billion for smaller rival Galaxy Resources, a strategy designed to boost scale and help it grow faster in regions closer to customers.
“The next few years are going to be critical in terms of whether there’s enough available lithium supply, and that’s why you’re starting to see commodity prices start to ramp,” said Chris Berry, an independent lithium industry consultant.
The price gains helped Albemarle and other major producers, including China’s Ganfeng Lithium Co and SQM, post big gains in first-quarter profit and boost forecasts for the year.
Even China’s Tianqi Lithium Corp, saddled with debt due to years of low lithium prices, signaled that recovering demand should help it swing to a profit this year.
Forecasts call for demand for the white metals to surge from about 320,000 tonnes annually last year to more than 1 million tonnes annually by 2025, when many automakers plan to launch new EV fleets, according to Benchmark.
Still, demand is expected to outstrip supply in 2025 by more than 200,000 tonnes, so lithium prices may need to rise to encourage producers to build more mines. That could boost the prices consumers pay for EVs. “Companies across the lithium-ion supply chain are in the best position they’ve been in for the last 5 years,” said Pedro Palandrani of the Global X Lithium & Battery Technology ETF , which has doubled in value in the past year.