Glory Lithium Project, Nevada
Cypress Development's flagship 1,520 acre Glory Lithium Project totaling 76 placer/lode claims is located in the heart of the Clayton Valley lithium exploration area of Esmeralda County, State of Nevada, USA.
Cypress' Glory Project is located on the south flank of "Angel Island" and immediately southeast of the Albemarle (NYSE: ALB) Silver Peak Lithium Mine. The Glory Claims share their western boundary with claims controlled by Pure Energy Minerals (TSX-V: PE) who have identified an inferred lithium brine resource at their northern resource area (see Pure Energy's news release July 28, 2015) located to the immediate west of Cypress' property boundary. The lithium brines being produced for almost 50 years at the Silver Peak Mine have come from the flanks of Angel and Goat Islands.
The Glory Claims are located within a 0.5 mile (<1000m) southeast of current and past producing lithium brine wells belonging to the Albemarle Silver Peak Mine. Cypress' Glory Clayton Valley Project is located in an active area of lithium mining and lithium exploration. Highways and electric power are in place and exploration resources needed are readily accessible.
Cypress has reviewed the seismic data in Pure Energy Minerals NI 43-101 Technical Report titled "Inferred Resource Estimate for Lithium, Clayton Valley South Project", dated July 17, 2015. The data appears to indicate favorable lithium brine exploration targets along the western and west central portions of Cypress' Glory Project.
Other first order targets exist on Cypress' Glory Clayton Valley property including the discovery of extensive surface outcropping of altered green lithium-rich mudstone found during 2016 exploration and the presence of stockwork veining at paleo hot spring vents. These non-hectorite mudstone exposures likely represent uplifted portions of the lake bed stratigraphy within which the lithium brines of the Clayton Valley basin are found and produced from.
The lithium-rich outcropping mudstone could possibly overlie lithium-rich brines at a shallow level at Cypress' Glory Clayton Valley Project. The core lands cover the immediate eastern extension of Pure Energy's identified lithium brine Northern Resource Area. The Company believes that lithium-rich brines could be localized at the water table below the highly mineralized mudstone discovered at Cypress' Glory Project and potentially along structures cutting these units.
The Albemarle Silver Peak Mine is the only operating brine based lithium carbonate mine in North America. The Silver Peak Mine began operations in 1967 to mine lithium carbonate by low cost evaporation ponds and has produced lithium carbonate since then. The concentration in the production brines were reported in 2001 to average 160 ppm (160 mg/litre) lithium (Garrett Report, 2004). Concentrations in the brines in Clayton Valley have been relatively consistent in the 150-200 ppm (150-200 mg/litre) lithium in recent history. The brines from the north part of the Clayton Valley are sodium/chloride (Na/Cl) in composition and have concentrations in the range of 60-400 ppm (60-400 mg/litre) lithium.
*NOTE: 100 ppm lithium metal (Li) is equivalent to 532 ppm lithium carbonate (Li2CO3).
Clayton Valley is located within the Basin and Range Province in southern Nevada and is an internally drained, fault bounded, and closed basin. Basin filling strata compose the aquifer system which hosts and produces the lithium-rich brine. (Zampirro Report 2004).
The Silver Peak area is one of the oldest mining areas in Nevada having produced substantial amounts of silver, gold, lithium and other minerals.
2016 Exploration Results at Cypress' Glory Clayton Valley Lithium Project:
Cypress has interpreted available historic geophysical data of the Clayton Valley, including reconnaissance gravity survey and seismic reflection survey data. Reconnaissance gravity surveys gave a better understanding of the size and extent of the basin and the depth to bedrock on Cypress' Angel and Glory claims. A seismic reflection survey helped define location and extent of bounding and in-basin faults, identify depth to bedrock, and identify and trace key stratigraphic horizons laterally and vertically throughout the basin.
Phase 1 surface sampling of green to bone white mudstone was completed at Cypress' Glory Project at the end of January 2016 in an area within the northwest portion of the property on the west flank of Angel Island. Angel Island is one of several isolated exposures of highly deformed and metamorphosed rocks of Cambrian age that are surrounded by basin fill evaporite rocks herein referred to as the "mudstone". These mineralized non-hectorite mudstone are not well understood in terms of age but are part of the recent basin fill evaporite rocks of the Clayton Valley based on work completed by the USGS and other research geologists. The lithium-rich mudstone exposures likely represent uplifted portions of the lake bed stratigraphy within which the lithium brines of the Clayton Valley basin are found and produced from.
Cypress' January 2016 Phase 1 sampling program returned the highest assay result for lithium in mudstone to be publicly reported in Nevada's Clayton Valley. Several of the assays carried greater than 2,000 ppm lithium (Li) (>1.06% Li2CO3) with one assay sample returning a grade of 3,070 ppm lithium (Li) (1.63% Li2CO3) content. The assay results encountered suggested a strong possibility of an essentially continuously mineralized volume of lithium-rich mudstone at surface over extensive portions of Cypress' Glory Clayton Valley property.
A series of samples were systematically collected from an approximate 300 foot wide traverse through the mudstone starting at first exposure on the basin side gravel-mudstone contact (west) and ending at a brecciated vertical fault contact of the mudstone with the Cambrian rocks of Angel Island (east). The samples were collected at an approximate spacing of 25 feet.
2016 Phase 1 assays from the systematic traverse samples averaged >1,500 ppm lithium (Li) and were accompanied by a typical suite of other evoporite rock mineralization. Cypress had discovered high lithium grades at surface that well exceeded other reported Clayton Valley sediments and brines.
Bob Marvin, Cypress Senior PGeo., sampling green
lithium-rich mudstone at Glory Clayton Valley Project:
The Phase 1 results suggested the strong potential of an essentially continuous volume of lithium-rich mudstone at surface at Cypress' Glory Project in a position immediately east of both brine production wells at the Albemarle Silver Peak Mine and the northern resource area of Pure Energy's Clayton Valley South project.
Cypress immediately moved forward with a more extensive 2016 Phase 2 exploration program at its Glory Project to better define this lithium-rich surface mineralization discovered during the Phase 1 sampling program. The Company carried out 2 kilometers of detailed surface sampling and geological mapping in the first 2 quarters of 2016 over the western portion of Cypress' Glory Clayton Valley property.
Cypress' May 2016 Phase 2 results from over 200 samples collected showed the discovery of a wide 2 kilometer north-south strike zone of outcropping highly mineralized mudstone that assayed 1,100 ppm lithium (Li) (0.59% Li2CO3) on average and includes a 1.0 kilometer discovery zone that assayed 1,350 ppm lithium (Li) (0.72% Li2CO3) on average.
The outcropping lithium-rich mudstone discovered at Cypress' Glory Clayton Valley property are believed to represent uplifted portions of the lake bed stratigraphy within which the lithium brines of the basin are found and produced from.
In August 2016, Cypress optioned its flagship Glory Clayton Valley Project to Pure Energy Minerals (TSX-V: PE) with Cypress remaining the project operator until Pure Energy earns a 51% interest. The agreement allows the Company to advance its Glory Project while working with and utilizing the geological expertise of the Pure Energy team.
Pure Energy's CEO Patrick Highsmith & COO Dr. Andy Robinson
& Cypress' Exploration Manager Bob Marvin:
In October 2016, Cypress and Pure Energy geologists collected approximately 240 rock samples on a nominal 100 metre (330 feet) grid covering much of the prospective sedimentary rocks on the Property. In addition to confirming strong lithium values from previous Cypress sampling, the sampling program returned some of the highest lithium rock samples yet reported in Nevada. So far, sampling has extended the lithium rich zone into a corridor covering more than 3 square kilometers. Selected highlights of the sampling program are included below:
• Maximum lithium value in rock: 3,830 ppm (2.04% Li2CO3);
• Average lithium content: 689 ppm;
• Extended corridor of high lithium to 3km long by more than 1km wide;
• 9 Samples containing more than 2,000 ppm Li (>1.06% Li2CO3);
• 71 Samples containing more than 1,000 ppm Li (>0.53% Li2CO3); and
• Anomalous boron (B) and potassium (K) trends that correlate with the high Li values.
Patrick Highsmith, Pure Energy Minerals CEO commented, "Our systematic sampling program with Cypress Development on the Glory Claims has exceeded our expectations by discovering some of the highest grade surface lithium in mudstone that has been reported in Nevada. Traversing across the area, we can see that these lithium-rich rocks occur over a huge area. Since the dip is relatively flat, our geologists have also demonstrated that the lithium bearing units continue beneath younger alluvial material. Based on our realization that there is potential for significant tonnage of high-lithium rocks on the Property, we are excited to begin the next phase of work on extracting the lithium from these rocks."
Results of Lithium Leach Test of Mudstone from Cypress' Glory Clayton Valley Project:
A number of Cypress' 2016 Phase 2 sample pulps were re-assayed at the ALS Chemex lab in Reno, Nevada by both a pure deionized water leach and a dilute Aqua Regia leach to provide further data on the potential feasibility of large-scale leach extraction methods of lithium from the mineralized mudstone. The goal of this work was to substantiate the potential to produce lithium directly from the mineralized mudstone with a low cost and environmentally friendly approach without the need for roasting or other costly mining and complex treatments.
The 47 mudstone samples that were selected for the lithium (Li) leach test came from over 200 collected during Cypress' Phase 2 program. The 47 samples previously averaged 1,334 ppm Li (0.71% Li2CO3) and covered 2 kilometers of strike length of the exposed mineralization.
The lab test results for extracting lithium directly from the mudstone showed an impressive average of 35% Li recovery using the water leach and 95% Li recovery using the dilute Aqua Regia process.
Table 2 below shows previously assayed mudstone samples when re-assayed using the dilute Aqua Regia leach method for lithium percentage recovered.
Table 2: Lithium Leach Extraction Results from Mineralized Mudstone
For example 1,000 ppm Li assay is equivalent to 5,320 ppm Li2CO3 assay or 0.53% Li2CO3
Li = Lithium Metal, ppm = parts per million
The data confirmed that a readily soluble non-hectorite mineral form of lithium-rich mudstone has been discovered at surface over wide areas of Cypress' Glory property with grades well exceeding other Clayton Valley sediments and brines. The lithium-rich mineralization is contained within calcareous evaporite rocks, dominantly carbonate rich lake-bed claystones and mudstones with interbedded volcanic ash units.
Cypress is moving forward at this time with mineral Identification (ID) by X Ray Diffraction (XRD) being conducted at the University of British Columbia. The Company is further advancing bench scale studies of using a plain water, non-acid leach and additional very dilute acid leach methods in an advancing effort to develop a low cost mining and environmentally friendly lithium (Li) extraction method for the mudstone at Cypress' Glory Clayton Valley Project.
Phase 1 Drill Program at Cypress' Glory Clayton Valley Lithium Project:
Cypress Development has prepared an exploration budget and has made preparations for a Phase 1 drilling program including reverse circulation ("R-C") holes to sample the extension to the east of the Pure Energy's lithium brine Northern Resource Area as described in their Clayton Valley South project NI 43-101 Technical Report, July, 2015. The Company has received a drilling permit from the BLM, Nevada covering a planned drill program targeting lithium brines at Cypress' Glory Clayton Valley Project and shallow holes targeting the 1 1/2 by 3 kilometer long zone of lithium-rich mudstone discovered at surface.
The drilling permit contains proposed R-C drill hole locations targeting potential lithium-rich brines within the Main Ash Aquifer projected to underlie the west and west-central portions of Cypress' Glory Project. The Main Ash Aquifer is the primary target of the R-C holes. Cypress expects to intersect this zone at 500 to 1,000 feet below surface. Additional deeper targets will also be tested including the potential presence of a coarse gravel aquifer near the base of the basin fill evaporite sequence.
The drilling permit also contains proposed locations for a number of shallow auger holes targeted to provide initial subsurface data and assays under the wide zone of strongly mineralized salty mudstone outcrops. This shallow drilling should allow Cypress to begin to estimate size, lithium (Li) grade and tonnage in the mudstone at the Company's Glory Project. The auger holes will be sampled on composite 5 foot intervals.
The exploration results received by Cypress to date are being viewed as highly encouraging for the potential of a continuous volume of a highly soluble form of lithium-rich mudstone near surface at the Company's Glory Clayton Valley Project. The results are also being viewed as highly encouraging for the discovery of lithium-rich brines in the aquifers below, next door to successful lithium brine exploration and production.
Lithium Mining Infrastructure in Clayton Valley, Nevada:
Lithium Timing and Why Now?:
Tesla Motors (NASDAQ: TSLA) is driving the current lithium boom in Nevada with the construction of a Gigafactory, a large-scale lithium-ion battery facility outside of Sparks Nevada. Market speculations of the likely construction of additional large-scale lithium battery factories in the region appears based on the potential of lithium batteries as all purposed energy storage units that are highly scalable.
The energy storage revolution is generating high demand for lithium with analysts forecasting demand increases for the product (Li) in the near future. Battery giants are scaling up lithium-ion production with mega-factories and are actively acquiring the raw material through off take agreements. Companies already producing lithium are attempting to increase production. Rockwood Holdings was purchased by Albemarle Corporation (NYSE: ALB) in 2014 for $6.2 billion USD. This purchase included the Rockwood Silver Peak Lithium Mine located in Clayton Valley, Nevada.
Tesla Motors is building a $5 billion USD battery gigafactory outside of Reno, Nevada. A large amount of the supply of lithium will have to come from the U.S. (i.e. Nevada's Clayton Valley production) because of the major tax incentives Tesla received ($1.3 billion USD in tax incentives over the next 10 years). Electric vehicles and energy storage has become a huge demand driver for the increased production at Clayton Valley and for the exploration and the discovery of additional lithium deposits in the area.
The most important use of lithium is in rechargeable batteries for mobile phones, laptops, digital cameras and electric vehicles. Lithium is also used in some non-rechargeable batteries for things like heart pacemakers, toys and clocks.
Lithium metal is made into alloys with aluminium and magnesium, improving their strength and making them lighter. A magnesium-lithium alloy is used for armour plating. Aluminium-lithium alloys are used in aircraft, bicycle frames and high-speed trains.
Lithium oxide is used in special glasses and glass ceramics. Lithium chloride is one of the most hygroscopic materials known, and is used in air conditioning and industrial drying systems (as is lithium bromide). Lithium stearate is used as an all-purpose and high-temperature lubricant. Lithium carbonate is used in drugs to treat manic depression, although its action on the brain is still not fully understood. Lithium hydride is used as a means of storing hydrogen for use as a fuel.
Robert Marvin, P.Geo., Director, VP of Exploration for Cypress Development Corp. is the Qualified Person as defined by National Instrument 43-101 and has approved of the technical information on this web site.
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