Jeremy Poirier reports that Pure Energy Minerals is focused on lithium-enriched brines that can be processed into battery grade chemicals. This focus has led the company to secure over 9,300 acres of claims in Clayton Valley, Nevada. The lithium-rich land is directly adjacent to the only active lithium mine in all of North America, which is operated by a major player in the industry.
Recent tests conducted by Pure Energy show that the chemical composition of its brine is similar to the published brine chemistry of its neighbor, the Silver Peak Mine. The Silver Peak Mine was the first lithium brine mine in the world, in operation since the late 1960s. So this brine has been well tested as a commercial lithium producer, so the prospects are good for the Pure Energy success. In fact, the company exploration work to date indicates the project may hold lithium resources of more than 800,000 metric tons of lithium carbonate equivalent.
It is the significant amount of inferred resources (as well as the favorable chemistry) that has enabled Pure Energy to sign a conditional agreement to supply lithium hydroxide to a Gigafactory for a five-year period. High purity lithium hydroxide is the form of lithium becoming most common in new battery technologies. It definitely helps that Pure Energy production facility will only be about a 3.5-hour drive to the new factory and the transportation infrastructure is already in place.
Having the first conditional supply agreement is enormous for Pure Energy. It allows the company to further its development towards production confident that its first customer is signed up. Having a deal like this in place should also help to secure capital in the future when the time comes.
Pure Energy is earlier in the development process than some of their direct competition, but could very realistically produce the same tonnage of lithium per year down the line (if not more), and it appears to be substantially undervalued at this date.
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