With PFS in Hand, Surge Battery Metals Seeks Partners for Nevada North

Trevor Hall (0:15)

Early this month, Surge Battery Metals released a pre-feasibility study for its Nevada North Lithium Project in Elko County, Nevada. Highlights for an after-tax NPV of 9.8 billion US at an 8% discount rate, and an after-tax IRR of 23.6% using a long-term lithium carbonate price of 24,000 US.

It's built on improvement and probable reserve of 218.3 million tons at 3,928 part per million lithium, enough for a 42-year mine life. Phase 1 capital is estimated at 2.77 billion. The company is planning for a final investment decision in 2028 The project is held in a joint venture with Evolution Mining and Surge, holding about two-thirds. Stefan Ball, he is VP of Commercial Development and here to take us through it. Stefan, welcome to Mining Stock Daily.

Stefan Ball (1:08)

Thanks. Great to be here, Michael.

Trevor Hall (1:11)

Let's step back, Stefan. Tell us about the project, the location, the rock type, the infrastructure.

Stefan Ball (1:16)

Yeah. So this project is in Northeast Nevada, north of Elko, a few hours, kind of in the middle of, more or less middle of nowhere.

It's a clay-hosted lithium deposit. There's quite a few in Nevada. Most of the deposits in Nevada are kind of lower grade, maybe around a thousand parts per million. Then there's a handful that start to get higher. Ours is one of those.

Trevor Hall (1:51)

Can you talk about infrastructure on the project?

Stefan Ball (1:55)

Yeah. So there's a highway, North and West Highway, and some electrical lines where we're about 10 miles off of that Highway 93

So there's some old rail that's not active now, but that could be revived. So there's decent infrastructure there. It's just there is about 10 miles to kind of access that.

Trevor Hall (2:18)

You did mention it's a claystone. It just for listeners, the other type of processing is spodumene as well as brine. Talk about your claystone and what that means for processing.

Yeah.

Stefan Ball (2:29)

So it's quite different than spodumene.

You know that the spodumene is in kind of really hard granitic rocks, and are in clays which are quite soft. Our grade is a little bit lower than spodumene, but I'd say clay deposits in general are lower than spodumene. But ours is actually kind of getting to the bottom end of where you do see spodumene. And it's a little bit hard to compare clay and spodumene kind of apples to apples, just by how they're measured. We measure ours, the convention is in part per billion lithium, our feed grade is close to 4,000 ppm. And then spodumene measures in Li2O, and that kind of makes theirs look a little bit better. But if we were to measure ours in Li2O, it would be close to about 0.8 or 0.9% Li2O, and that gets you kind of in the bottom range of spodumene. In terms of processing, ours is actually quite a bit easier, I think, to process. Spodumene mineral really does not like to be broken apart. It's pretty stable, and you need to roast it at like 1000 degrees Celsius to kind of make a phase change, and then you can get at that lithium. The clay is a little bit easier. You don't have to roast. You can roast if you want. Some flow sheets do, but you can also just do an acid bleach on it.

And kind of go from there.

Trevor Hall (4:04)

Talk about water needs. The PFS says for phase one, you need about 3,280 acre feet per year. You filed applications to the state government to roughly cover that. You are in the Western US, and the Western US are certainly challenged by water scarcity. Thacker Pass, which is near you, had its own water challenges.

How confident are you in terms of being able to secure water for the project?

Stefan Ball (4:29)

It's looking pretty good. We've got a pretty good line of sight right now to phase 1

We've got that agreement with the Salmon River Cattlemen's Association, and that is helping us get there for that phase 1 water needs.

It hasn't been finalized yet, but it looks pretty good. We got more work to do on phase 2 That being said, we see the path forward there. There is water available in the basin. This can be done. We've just got to continue to execute on that and secure it.

Trevor Hall (5:08)

July 8th, you were said in the news release, Respect was working towards cesium and rubidium being in the upcoming PFS. The PFS that you did release this month doesn't mention those metals.

Why those metals significant and why did they make it into the PFS?

Stefan Ball (5:28)