This award, named in honour of PDAC’s longest serving president, is given to an individual or organization demonstrating leadership in management and financing for the exploration and development of mineral resources.
For demonstrating leadership in transforming a grassroots exploration property into a vertically integrated lithium operation in Québec that will provide a new source of supply for the surging lithium battery market
The rapid growth of Nemaska Lithium exemplifies how swings in commodity markets can invigorate junior mining companies nimble enough to capitalize on them. When Nemaska started kicking rocks on the Whabouchi property in northwestern Québec in 2009, there were only a few grab samples and one significant lithium intersection—drilled almost 50 years previously—in the property’s exploration record. By successfully duplicating the historical results at a time when lithium was being recognized as a key component of cellphone batteries and other new applications, Nemaska was able to raise enough funds to finance further exploration of Whabouchi’s spodumene-bearing pegmatite zone.
Today, Nemaska is well underway on construction of a vertically integrated lithium operation, having raised a remarkable $1.1 billion through a combination of a bond offering ($455 million) a streaming agreement ($195 million) and a $454 million share issue partly taken up by the Québec government. The Whabouchi spodumene mine is expected to produce 213,000 tonnes of 6.25% Li2O concentrate annually that will be shipped to and processed at an electrochemical plant in Shawinigan to produce high-purity lithium hydroxide and lithium carbonate.
Nemaska is the brainchild of President and CEO Guy Bourassa, a lawyer with decades of experience in the mining industry. He negotiated the original acquisition of Whabouchi and went on to raise more than $150 million to develop the deposit to the point where Nemaska was able to secure off-take agreements for the mine’s production with several large end users worldwide. Bourassa also stickhandled development of a patented process to produce lithium hydroxide and lithium carbonate directly from spodumene, the key to building an operation that can compete with other lithium producers worldwide.
Global lithium demand grew about 17% in 2017 because of surging demand for the metal in batteries for applications ranging from cellphones to electric cars. The market is expected to expand even more significantly in the coming years as new technologies take hold. Nemaska’s large low-cost operation has the potential to produce 10% of the supply of battery-grade lithium hydroxide, currently the most sought after lithium compound.
The Whabouchi mine, located about 300 km north of Chibougamau near the Cree community of Nemascau, is expected to begin production in the second half of 2019 with 200 employees. The Shawinigan plant will come online a year later with 100 employees. Nemaska has signed an agreement with the Cree covering training, employment and revenue sharing and Nemascau has a significant equity stake in the junior.
Based on a 2018 feasibility study, Whabouchi has an after-tax NPV of $2.2 billion and an IRR of 56.0%. Reserves of 37 million tonnes grading 1.4% Li2O will support a mine life of 33 years. An even larger resource remains open, suggesting that the mine may provide the world with lithium for decades to come.