Li-FT Power is a Canadian mineral exploration company specializing in the acquisition, exploration, and development of lithium pegmatite projects.
What would you describe as the highlights of the past 12 months for Li-FT Power?
From a lithium market perspective, it's been a tough year due to the falling price of lithium. However, from an operational standpoint, it has been a great year for us.
In October, we released our initial resource estimate for the Yellowknife lithium project, positioning us as one of the largest undeveloped lithium deposits in Canada, close to existing infrastructure. Additionally, we secured a strategic investment of $22 million in November, which brought in a corporate partner for a 10% equity stake. Despite the challenging market, we have been deploying this capital towards advancing the permitting process for the mine, and preparing for an environmental assessment submission by the end of next year.
Why have lithium prices been so low?
The main factor is the influx of new supply into the market. Lithium was historically used in ceramics, glass, and grease before the rise of electric vehicles (EVs), which has dramatically increased demand. As a result, we have seen a massive spike in demand for lithium, and when demand surges, we start to search for new supplies. This led to the discovery of substantial lithium resources, especially in places like Zimbabwe, where some companies have bypassed traditional drilling methods and opted for quicker extraction. The easy-to-access lithium was found in the previous cycle, so the next cycle may not be as abundant, and we will need to work harder to uncover viable deposits.
What keeps you optimistic about lithium's future despite the current oversupply?
The long-term demand for lithium remains very strong, particularly driven by the growing EV market. While sales in the U.S. have been flat, China’s EV market grew by 30% last year, and they represent 60% of global EV sales. Estimates suggest that lithium demand will grow at a compound annual growth rate of 10-25%, which means we will need to increase lithium supply significantly in the coming years. By 2025, the lithium carbonate equivalent required will be five million tons, compared to the 500,000 tons we have added to the market in recent years.
Additionally, stationary energy storage saw a 60% growth last year, helping to offset the cooling EV market in the U.S. and Europe. This long-term outlook for lithium remains bright, as we continue to see battery adoption in various industries, from electric lawnmowers to grid storage.
How much more funding do you need to be ready for mining?
We are still early in the development pipeline. Our permitting process requires at least two years of environmental baseline data, followed by a two-year environmental assessment period, and then another year for mine permitting.
So, we are looking at around four years before we can obtain the necessary permits, with production slated for 2030. Although we have secured some funding, we are not yet fully funded to production. The timeline to production in North America is typically 15 years from discovery, so if we can achieve production within seven years, it would be a remarkable accomplishment.
Do you think the recent focus on critical minerals will make it easier for you to attract investment or government support?
In Western markets, pricing is a major driver of investment. While there are grants and tax credits available, the crucial factor is ensuring stable commodity prices. If governments intervene to stabilize prices or set a pricing floor for critical minerals, that could be very beneficial. With competition from state-backed Chinese companies, having a stable pricing environment or government intervention could help us stay competitive. For lithium projects in Canada, we are currently in a tough spot with the low prices, but government intervention to stabilize the market would be more impactful than direct funding.
Could you walk us through your preliminary assessments for the Yellowknife project?
The initial resource estimate for the Yellowknife project is 50.4 million tons at 1% lithium, making it one of the top ten largest hard rock lithium deposits in North and South America. This estimate is based on only 12 months of drilling, so there is still significant upside potential. The resource defines a 20-year mine life, which is a crucial milestone for us as it provides a solid foundation to move forward with the project. We are now focusing on the permitting process, with plans to continue expanding the resource to ensure long-term project viability.
What do you hope to be able to tell us about your progress when we speak again next year?
By this time next year, we should have our preliminary economic assessment, which will provide a clearer picture of the economics behind the project. We will also be well on our way to submitting our environmental assessment initiation package. These will be the two key milestones for us in the next 12 months. Additionally, we will continue to explore strategic acquisitions and M&A opportunities to expand our resource base and strengthen our position in the lithium market.
