Can First Energy Metals Quebec Lithium Project Help Fill NA EV Battery Needs

This post is an excerpt from an article written by eResearch Corp. about First Energy Metals Augustus Lithium Project in Quebec. The original article can be viewed here. eResearch granted permission to US Finance Post to summarize and publish this article on USFinancePost.com.

Lithium Driving the Electric Future

Lithium has a variety of uses including rechargeable lithium batteries that power most cellphones, computers, and tablets but it is the lithium batteries in Electric Vehicles (EVs) that is grabbing investors’ attentions these days.

Lithium’s unique properties including low atomic mass (lightweight) and high electrochemical reactivity, make it one of the most attractive battery materials of all the elements and perfect for EVs that value the energy-to-weight ratio for better mileage.

Lithium is mined from two distinct sources, brines and hard-rock minerals. Hard rock lithium primarily comes from spodumene with economic ore containing 1%-2% Lithium Oxide (Li2O).

In 2020, mining operations in Australia, Argentina, Chile, and China accounted for 90% of the world’s lithium production.

As demand for lithium to power North America’s EVs and battery storage sectors continues to accelerate and supply shortfalls are forecasted to start as early as 2023, the Canadian and U.S. governments, and industry are searching for a stable supply in North America.

First Energy Metals Acquires District-sized Land Package in the Lithium-rich Abitibi Region of Quebec

In 2021, First Energy Metals (OTC:FEMMF | CSE:FE | DB:DFLB) assembled land packages containing over 300 mining claims in the Abitibi Region of Quebec, Canada, and covers an area of over 15,045 hectares (over 37,177 acres) with Augustus and Canadian Lithium being the two most prominent lithium prospects.

The company successfully raised $3.7 million (C$4.75 million) in financings this year to fund its regional acquisition plan, project drilling, and exploration programs.

In April, the company started an initial drill program, which was successfully completed in September, and 27 of 32 drill holes intersected spodumene-bearing lithium pegmatites that validated historical drilling.

Some of the highlight drill holes included:

• 7.0 meters (m) of 1.12% Li2O at a drill depth of 11m;
• 19.0m of 1.17% Li2O at a drill depth of 126m;
• 10.5m of 1.22% Li2O at a drill depth of 69.0m; and,
• 10.0m long zone of 1.11% Li2O at a drill depth of 110m.

Lithium-Rich Exploration Area

Within a 20km radius around First Energy Metals properties, there are several historical and active lithium mines, and current exploration projects.

Sayona Mining’s (OTC:SYAXF | ASX:SYA) Authier Project hosts a Mineral Resource Estimate of 20.94 million tonnes of 1.01% Li2O for a total contained resource of 211,000 tonnes of Li2O.

Recently, Sayona Québec, a subsidiary of Sayona (75%) and Piedmont Lithium (NASDAQ:PLL | ASX:PLL) acquired the North American Lithium (NAL) mine that ceased operations in 2019 but has a historical mineral resource of estimated 57.7 million tonnes at 1.05% Li2O.

Sayona is carrying out a feasibility study to integrate the NAL mine with its Authier Project, to create a lithium hub in the Abitibi region.

Valuation Comparisons

First Energy Metals is currently trading at $0.22 (C$0.27) with a market cap of $13.1 million (C$19.1 million).

First Energy Metals appears relatively undervalued when compared with other lithium exploration companies operating in Quebec including Sayona Mining with a market cap of $681 million (A$880 million), Critical Elements Lithium (OTC: CRECF | TSXV:CRE) with a market cap of $218 million (C$250 million), and Vision Lithium (OTC:ABEPF | TSXV:VLI) with a market cap of $31.2 million (C$48.6 million).

These deals show the valuation potential of the Augustus Lithium Project if First Energy Metals can successfully execute on drill programs to deliver a maiden resource.

FIGURE 1: Lithium Supply and Demand

Source: Benchmark Materials

This article summarizes the key points from an article written by eResearch Corp., which can be viewed here.