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First Energy Metals Limited (DB:DFLB | OTC:FEMMF |CSE:FE) continues to release drilling results from its Augustus Lithium Project near Val-d’Or, Quebec, Canada as it works towards publishing a maiden mineral resource that validates historical drilling from the 1950s that reported Lithium Oxide (Li2O) grades in the 1-2% range.
Lithium has a variety of uses including rechargeable lithium batteries that power most cellphones, computers, power tools, and tablets. However, it is the lithium batteries in Electric Vehicles (EVs) and electrical grid storage applications that is garnering the most attention in the media these days.
Demand for lithium to power North America’s EVs and battery storage sectors continues to accelerate and industry reports suggest that supply shortfalls are forecasted to start as early as 2023.
First Energy Metals is exploring in the lithium belt of Quebec and there are several historical and active lithium mines, and current exploration projects that are located within a 20km radius from the property.
At the start of this year, First Energy Metals began assembling a group of mining claims and land packages in the Abitibi Region of Quebec, Canada, and the project now consists of over 300 mining claims covering an area of over 15,045 hectares (over 37,177 acres) with Augustus and Canadian Lithium being the two most prominent lithium prospects.
The initial drill program started in April and focused on target areas based on the historical exploration data and the company’s surface trenching and sampling program.
By September, First Energy Metals completed its Phase 1 drill program of 5,847m, targeting the Augustus prospect zone. A total of 32 drill holes were completed and 27 holes intersected spodumene-bearing lithium pegmatites.
In its latest results, released on December 9, the drilling intersected a 39-metre (m) spodumene pegmatite and returned a 7m wide zone that assayed 1.12% Li2O close to the surface. Spodumene is a lithium-rich mineral and a source of lithium used for battery production.
Financings Fuel the Acquisitions, Drilling, and Sampling
Through the year, First Energy Metals successfully raised capital to fund its regional acquisition plan and extensive project drilling and exploration programs. In total, the company closed C$4.75 million (£2.75 million) in financings.
Lithium-Rich Exploration Area
In the area, Sayona Mining’s (DB:DML | ASX:SYA) Authier Project and the North American Lithium (NAL) mine are two comparable projects that highlight the potential at First Energy Metals’ Augustus Project.
The 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.
The NAL mine ceased operations in 2019 but was recently acquired by Sayona Québec, a subsidiary of Sayona (75%) and Piedmont Lithium (DB:6S3 | ASX:PLL) (25%). A 2017 mineral resource at the mine estimated 57.7 million tonnes at 1.05% Li2O.
Sayona plans to carry out a feasibility study into the development of the facility to convert spodumene into lithium hydroxide or lithium carbonate and is also currently engaged in studies 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 €0.17 (C$0.27) with a market cap of €13.2 million (C$19.1 million). In the highly active battery metals space, the company is relatively undervalued when compared with other lithium exploration companies operating in Quebec including Sayona Mining with a market cap of €560 million (A$880 million), Critical Elements Lithium (DB:F12 TSXV:CRE) with a market cap of €170 million (C$250 million), and Vision Lithium (DB:1AJ2 | TSXV:VLI) with a market cap of €33.6 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: Regional Lithium Projects in Quebec, Canada; First Energy Metals Projects (Green & Orange Blocks)
This post is a summary of an article written by eResearch Corp., which can be viewed in its entirety here.
