Nouveau Monde Graphite Inc. press release
Snow Lake Provides a Corporate Update
TSX - Toronto Stock Exchange · Graphite · Canada
Winnipeg, Manitoba--(Newsfile Corp. - July 5, 2024) - Snow Lake Resources Ltd., d/b/a Snow Lake Energy (NASDAQ: LITM) ("Snow Lake" or the "Company") is pleased to provide a corporate update on its portfolio of clean energy mineral projects.
CEO Remarks
"_Having assembled a global portfolio of uranium and lithium projects, we feel we have positioned Snow Lake to benefit from both the clean energy transition and the electric vehicle (EV) transition,"_commented Frank Wheatley, CEO of Snow Lake. He continued: "_With exploration crews either in the field, or preparing to mobilize to the field, on our projects, we have high hopes for this exploration season."_
Global Portfolio of Clean Energy Projects
Snow Lake's portfolio currently includes the Black Lake Uranium Project in Saskatchewan, the Engo Valley Uranium Project in Namibia, the Shatford Lake Lithium Project and the Snow Lake Lithium™ Project in Manitoba (See Figure below).
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Corporate Strategy
Snow Lake's corporate strategy is to assemble and develop a portfolio of clean energy mineral projects designed to support the clean energy transition and electric vehicle transition. Snow Lake believes that exploring its uranium and lithium projects provide the best opportunity to create shareholder value. Geopolitical events continue to shape both the uranium and lithium markets, with the uranium market showing considerable strength, and the lithium market continuing to show weakness. Given the current state of the uranium and lithium markets, Snow Lake's primary focus over the next year will be to advance the exploration of its two uranium projects, while taking a slower, more careful approach to exploring its two lithium projects.
At the present time, Snow Lake believes the uranium projects provide the best current opportunity to create shareholder value and, during 2024, Snow Lake intends to focus the majority of its exploration efforts and expenditures on its two uranium projects.
Uranium Projects
Snow Lake's two uranium exploration projects are the Engo Valley Uranium Project in Namibia, and the Black Lake Uranium Project in the Athabasca Basin, Saskatchewan, Canada.
Engo Valley Uranium Project
The Engo Valley Uranium Project is located in the Skeleton Coast, in the Opuwo District of the Kunene Region, along the coast of northwest Namibia, approximately 600 kilometers north of Swakopmund, Namibia. Uranium mineralization was discovered in 1973 and exploration was conducted intermittently by Gencor between 1974 and 1980.
The Engo Valley Uranium Project is considered to be a top tier exploration project with historical, non-modern mining code compliant uranium resources, that would benefit from modern exploration techniques and technology for uranium exploration.
Acquisition of 85% Interest in the Engo Valley Uranium Project
Snow Lake and a private British Columbia company have entered into a binding letter of intent, pursuant to which Snow Lake will acquire up to 85% of Namibia Minerals and Investment Holdings (Proprietary) Limited ("NMIH"), a private Namibian company, which in turn is the sole registered and beneficial owner of 100% of the right, title and interest in the Exclusive Prospecting License - 5887 ("EPL-5887") for the Engo Valley Uranium Project. Details of this acquisition are set out in Schedule A attached hereto.
Exclusive Prospecting License 5887
EPL-5887, which covers the Engo Valley Uranium Project, is valid until February 12, 2026, covers an area of 69,530 hectares and authorized NMIH to explore for base and rare metals, industrial minerals, non-nuclear fuel mineral, nuclear fuel minerals, precious metals and precious stones.
2024 Exploration Program
Snow Lake has designed a multi-phase exploration program for 2024 for the Project, which includes:
analysis of all airborne survey data previously flown by the Namibian Government over the project area, together with all other historical exploration reports and data on the project area on file with the Namibian Ministry of Mines and Energy (now complete);
topographical survey of the project site (now complete);
locating all historic drill collars from Gencor's 1970 drilling campaign (now complete);
radon cup survey of all historical targets, as well as a number of new targets, in order to verify the historical airborne survey data and to confirm both historic and new drill targets (in progress);
an initial 1,000 - meter reverse circulation drill program to twin the historical drill holes, and to begin an in-fill grid pattern between the historical drill holes (mobilization); and
downhole radiometrics on each of the new drill holes (pending).
Exploration field crews began mobilizing to site in May 2024 in order to undertake the field portion of Phase 1 of the program. Results from the radon cup survey, the initial phase of drilling, and the downhole gamma logging, will inform a second round of drilling. The two phases of drilling are designed to both test the validity of the various exploration targets and to produce an initial SK-1300 compliant mineral resource estimate.
Namibia
Namibia is ranked as the 5thhighest African mining jurisdiction for mining investment according to the Fraser Institute's 2023 annual survey, and was the world's third-largest producer of uranium, accounting for 11% of global production, in 20221. The Husab Uranium Mine and the Rossing Mine are currently the only operating uranium mines in Namibia, with 5 major uranium mines currently in development.
Black Lake Uranium Project
The Black Lake Uranium Project is located in the northeastern Athabasca Basin, Saskatchewan. Uranium mineralization was discovered in 1950 and exploration was conducted intermittently by a number of companies during the 1950's and 1970's. The Black Lake Uranium Project is considered to be an exploration stage project with historical, non-modern mining code compliant uranium resources, that would also benefit from modern exploration techniques and technology for uranium exploration.
Mining Claims
The Black Lake Uranium Project consists of 20 mining claims covering 18,908 hectares and is divided into the following four project areas: Higginson Lake, Charlebois Lake, Fisher Hayes and Spreckley Lake.
Acquisition of a 100% Interest in the Black Lake Uranium Project
Snow Lake has acquired a 100% interest in Global Uranium Acquisition Corp Pty Ltd ("Global"), a private Australian company, which in turn has a mineral property option agreement with Doctors Investment Group Ltd., a private British Columbia company, pursuant to which Global has the sole and exclusive right to earn a 100% undivided interest in the mineral claims comprising the Black Lake Uranium Project. Details of this acquisition are set out in Schedule A attached hereto.
2024 Exploration Program
Given the large amount of historical exploration work undertaken during the 1950's and 1970's on the Black Lake Uranium Project, an initial step will be a compilation and review of all historical exploration data. The first phase of Snow Lake's exploration program for 2024 will include an airborne survey over the entire project area. This will be followed by a suite of ground geophysics to refine the results of the airborne survey, as well as to assist in locating high-value drill targets. A program of diamond drilling will follow the identification of drill targets, with the number and depth of drill holes being dependent on results of the target identification phase. Based upon successful drilling, the objective of the work program would be to have an initial SK-1300 compliant mineral resource estimate completed prior to the end of 2024.
Saskatchewan, Canada
Saskatchewan was the second-largest global producer of uranium in 2022 and accounted for 15% of the world's primary uranium production2, and was ranked as the 3rdoverall jurisdiction for mining investment according to the Fraser Institute's 2023 annual survey3. Saskatchewan also hosts the world's largest, highest grade uranium deposits, and is the source of almost a quarter of the world's uranium supply for electrical generation.4
Uranium Market
The only significant commercial use for U3O8is as a fuel for nuclear power plants for the generation of electricity5. Nuclear energy underpins the three major global trends of: 1) electrification; 2) decarbonization; and 3) energy security. Global demand for electricity is estimated to grow by approximately 50% by 2040, and is accompanied by calls to triple global nuclear capacity by 20506. Nuclear energy provides clean, non-CO2 emissions, and low-cost energy, with greater generating capacity per footprint than other fuel sources.
Geopolitical Events
Geopolitical events continue to shape the global uranium market, including the ongoing Russian invasion of Ukraine, political instability in Niger, and the United States passing a series of laws banning the importation of Russian uranium and facilitating American nuclear energy leadership. These events continue to influence and drive the global energy mix and policy, with renewed focus on nuclear power as a means of ensuring energy security.
United States - Legislation to Enhance Energy Security
In the past two months, the United States has passed two significant pieces of legislation designed to advance clean energy, enhance energy security and independence, and to revive an aging nuclear energy industry at home and bolster cutting-edge technologies abroad.
The Prohibiting Russian Uranium Imports Act
On May 13, 2024, President Biden signed into law The Prohibiting Russian Uranium Imports Act (the "Import Ban"), a move which the White House has called "a national security priority". The Import Ban bans the import of enriched uranium produced in Russia or by Russian entities, and is designed to enhance the United States' energy security by reducing its dependence on Russia for nuclear fuels. It also unlocks funding to support domestic uranium production. Russia is currently the largest foreign supplier of enriched uranium to the United States, according to US Energy Department data.
The ADVANCE Act
On June 18, 2024, the United States Senate passed the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act (the "Nuclear Energy Law"), which is designed to reestablish the United States as the global leader in nuclear energy in the twenty-first century. The Nuclear Energy Law strengthens the United States' energy security, as well as expanding nuclear power as a clean, reliable power source designed to remain a major part of the United States future energy mix, meeting their climate goals and ensuring their energy independence.
Nuclear Power's Critical Role in the Energy Transition
Nuclear power plays a critical role in the energy transition, as it is widely stated that there is no path to net zero carbon without nuclear power. At COP 28, a total of 22 countries agreed to target tripling nuclear capacity by 2050 as countries focus on energy security and affordability. Nuclear power programs continue to expand, with 440 operating reactors in 31 countries, and with 60 reactors under construction in 18 countries7.
Uranium Supply, Demand and Pricing
_Supply: _Geopolitical events continue to disrupt the global uranium supply chain. A combination of low prices over the past decade, underinvestment in uranium projects and nuclear power, mine closures, challenges in re-starting idled uranium mines, and the COVID19 pandemic, have all contributed to a reduction in the global supply of uranium. More recently, uranium producers, developers, and physical uranium holding companies have continued to buy physical uranium, putting further strain on the uranium supply chain.
_Demand: _Demand for uranium is being driven by the increasing focus on nuclear power as a component part of net zero, a policy shift to include nuclear power as clean energy, and the number of nuclear reactors in operation and under construction.
As noted above, with 440 operating reactors in 31 countries, and with 60 reactors under construction in 18 countries, total uncovered uranium requirements are more than 500 million pounds through 2030. The World Nuclear Association's Nuclear Fuel Report (2023)8shows a 28% increase in uranium demand over 2023 - 2030, with a 51% increase in uranium demand for the decade 2031 - 2040, providing plenty of scope for growth in nuclear capacity in a world focused on carbon emissions. Demand for uranium is forecast to outstrip uranium supply over the next decade.
_Prices:_As a result, prices of uranium have recovered from their lows over the past decade and briefly exceeded USD$100 per pound U3O8in January 2024, with current prices around USD$85 per pound U3O8.
Positive for Uranium Exploration and Development
Snow Lake is of the view that the combination of supply and demand factors, against the backdrop of the search for solutions to decarbonization and managing global geopolitical risks, is very positive for uranium exploration over the next decade.
Lithium Projects
Snow Lake has two lithium projects, the Shatford Lake Lithium Project, an exploration stage project adjacent to the Tanco lithium mine in Southern Manitoba, and the Snow Lake Lithium™ Project, an exploration stage project in Northern Manitoba.
Shatford Lake Lithium Project
The Shatford Lake Lithium Project is an exploration stage project located in Southern Manitoba, contiguous to the southern boundary of the Tanco Mine. The region hosts hundreds of individual pegmatite bodies, many of which are classified as complex rare-element Lithium-Cesium-Tantalum ("LCT") pegmatites. Accordingly, the Shatford Lake Lithium Project holds the potential for cesium and tantalum mineralization, in addition to lithium mineralization.
Acquisition of a 90% Interest in the Shatford Lake Lithium Project
Snow Lake has entered into an option agreement with ACME Lithium Inc. ("ACME"), pursuant to which ACME has granted Snow Lake the option to earn up to a 90% undivided interest in the Shatford Lake Lithium Project. Details of the option agreement are set out in Schedule A attached hereto.
The Shatford Lake Lithium Project is comprised of 37 mineral claims located over three project areas - Shatford Lake, Birse Lake, and Cat-Euclid Lake, totaling approximately 17,000 acres. The project is located in the Bird River Greenstone Belt in southeastern Manitoba. Thirty-one (31) of the mineral claims are contiguous to the Tanco mine.
2024 Exploration Program
Snow Lake, together with Critical Discoveries, has designed a four-phase exploration program for 2024. Phase 1 consists of compiling and analyzing all past exploration data generated by ACME Lithium Inc., including all geophysical and geochemical data, as well as past drilling results, in order to identify targets for field work in Phase 2.
Phase 1 has been completed and Phase 2 has been initiated with the Critical Discoveries' exploration field team of 4, consisting of 2 geologists and 2 field technicians. Initial prospecting and mapping will focus on the northwest corner of the Shatford Lake Lithium Project and will then expand to cover the balance of the project.
Initial prospecting activities to date have included the discovery of numerous pegmatites under heavy overburden. Samples have been taken and submitted to the assay lab for analysis.
Depending on assay results, Phase 3 is intended to be a program of up to 2,000 meters of diamond drilling, spread over approximately 10 holes of approximately 200 meters each, dependent upon appropriate drill target identification from Phase 2 of the program. Phase 4 will be compilation and evaluation of all field data, assay results, and drill results from the 2024 exploration program.
Tanco Mine
The Tanco Mine is located on the northwest shore of Bernic Lake, Lac du Bonnet, Manitoba, and is 100% owned and operated by Tantalum Mining Corporation of Canada Ltd. ("Tanco"), a subsidiary of Sinomine (Hong Kong) Rare Metals Resource Co. The Tanco Mine pegmatite orebody was discovered in the late 1920's and the Tanco Mine has been in commercial operation producing lithium in Manitoba for more than 50 years. In addition to lithium concentrate for the lithium battery market, the Tanco Mine produces cesium-based products for the North American market.
Snow Lake Lithium™ Project
The Snow Lake Lithium™ Project is a 100% owned exploration stage project located in the Snow Lake region of Northern Manitoba, comprising 122 mineral claims covering 24,515 hectares (approximately 60,577 acres). The Snow Lake region is a historical mining district which currently hosts Hudbay's Lalor mine and Vale's T3 mine.
The Snow Lake Lithium™ Project consists of two deposits, the Thompson Brothers deposit and the Grass River deposit, which together have a measured, indicated and inferred resource estimate of approximately 8.2 million tonnes grading approximately 1% Li2O.
To date, a total of 26,000 meters of drilling has been completed, of which approximately 20,000 meters included in the current mineral resource estimate, with approximately 6,000 meters of drilling not included.
In July 2023, Snow Lake completed an S-K 1300 Technical Report Summary of Initial Assessment (the "PEA"), which considered a mine plan consisting of underground mining on both deposits, with an initial open pit on the Grass River deposit. Metallurgical testwork has demonstrated that conventional lithium process technologies of dense media separation and floatation will provide robust recoveries.
The PEA contemplated that tailings would ultimately be backfilled underground, with no permanent tailing facility above ground. Together with a smaller operational footprint due to underground mining, and power provided by Manitoba's renewable hydroelectricity, the Snow Lake Lithium™ Project has strong ESG credentials.
The PEA also looked at the possibility of direct shipping ore ("DSO") as an early cash flow generating opportunity to use revenue from DSO sales to offset initial capital costs to construct the mine and processing facility. Options exist to sell the DSO to a variety of parties, including Sinomine Corporation's world class Tanco Mine (the "Tanco Mine"), a lithium, cesium and tantalum producer since 1969, located east of Winnipeg.
Our Plans for 2024
Due to a number of factors, including warmer than normal winter weather conditions in Northern Manitoba during early 2024, and the current state of the lithium market, Snow Lake did not undertake its planned winter drilling campaign. During 2024, we will complete our second year of environmental baseline data collection. Additional exploration, including additional infill drilling, and drilling of the open extensions of both the Thompson Brothers and Grass River deposits, will not take place during 2024 due the factors described above, and the more detailed description of the current lithium market below.
Manitoba, Canada
Manitoba is a Tier 1 mining jurisdiction and its ranking improved from 14thto 6thoverall in the Fraser Institute's 2023 annual survey9. Manitoba is a historic, as well as a current, mining jurisdiction with currently operating gold, nickel and lithium mines.
Lithium Market
The lithium market currently remains depressed. Lithium prices continue to remain low after a stratospheric rise in 2022, followed by a precipitous 80% drop during 2023. Demand for lithium continues to be weak, and a number of major global lithium producers continue to curtail production until the lithium market and lithium prices recover.
When Snow Lake prepared the S-K 1300 Initial Assessment on the Snow Lake Lithium™ Project in July 2023, the price of lithium concentrate was approximately USD$3,500 per tonne. Recently, prices have hovered around the USD$1,000 to USD$1,200 per tonne. The dramatic drop in lithium concentrate prices has a significant negative effect on the project economics of the Snow Lake Lithium™ Project.