Dean Lithium Project, Nevada
Cypress is acquiring a 100% interest in the 2,700 acre (35 association placer claims) Dean Lithium Project located in the heart of the Clayton Valley lithium exploration area of Esmeralda County, State of Nevada, USA. The Company's Dean Lithium Brine/Claystone Project is located adjacent to the Albemarle Silver Peak Mine on its western boundary, Pure Energy Minerals resource area on its southwest boundary and Cypress' Glory Clayton Valley Project on its southern boundary.
Cypress' highly prospective Dean property is located within 200 metres east of current and past producing lithium brine wells belonging to the Silver Peak Mine operated by Albemarle (NYSE: ALB). The Dean property also abuts the northern resource area of Pure Energy minerals (TSX-V: PE) project (see Pure Energy's NI 43-101 Technical Report of July, 2015). The Pure Energy potential production wells SPD 9, CV1, CV3 are located only 500 metres from the southwest area of Cypress' Dean Project.
The Company's Dean Project is tied onto the immediate north of Cypress' Glory Lithium Project where a detailed aggressive work program is underway. In August 2016, Cypress optioned its Glory Clayton Valley Project to Pure Energy Minerals where Cypress remains the project operator until Pure Energy earns a 51% interest.
Cypress' Dean Project includes Angel Island, 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 "claystones". These mineralized non-hectorite claystones 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.
Cypress has compiled and reviewed available geological data relating to Cypress' Dean property. The data appears to indicate favorable lithium brine exploration targets on the property. Several targets exist on the Dean property which include the discovery of extensive outcropping of altered green lithium-rich claystones and the presence of paleo hot spring vents leading Cypress to believe that additional lithium bearing brine aquifers could be localized at the water table below the highly mineralized claystones. These lithium-rich claystone 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 Esmeralda geological formation is the known host rock unit for both lithium brine production and for lithium mineralized evaporate rocks currently being explored by Cypress in Clayton Valley, Nevada. Known structures on the Dean property include the dominant Angel Island Fault, a district-scale strike slip fault which trends through strongly fractured surrounding rock units. This zone of pervasive fracturing is being targeted as a pathway for brines to invade the underlying ash layers and also as a zone of high porosity which itself could host lithium brine zones along strike. Deformation along the Angel Island Fault is a complicated but highly prospective zone for the existence of structural traps for lithium brines.
The Albemarle Silver Peak Lithium Mine is the only operating brine-based lithium mine in North America. The Rockwood Silver Peak Mine began operations in 1967 to mine lithium carbonate from the abundant lithium brine bearing Main Ash aquifer known in the Clayton Valley. The company has drilled hundreds of bore holes across the Clayton Valley desert floor to mine the lithium by low cost evaporation ponds for several decades.
The concentration in the production brines were reported in 2001 to average 160 ppm (160 mg/litre) lithium at the Albemarle Rockwood Silver Peak Mine (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 lithium brines being produced for almost 50 years at the Silver Peak Mine have come from the flanks of Angel and Goat Islands.
2016 Exploration Results at Cypress' Dean Clayton Valley Lithium Project:
In September 2016, Cypress initiated a Phase 1 detailed surface sampling program on the Company's new Dean Project. 55 samples were collected and submitted to the ALS Chemex lab in Reno, Nevada for analysis for lithium content from the abundant, green evaporite-rich volcanoclastic claystone exposures on the property. The samples returned very positive lithium results ranging between 340 ppm Li to 2,940 ppm Li (1.56% Li2CO3) with an overall average grade of 925 ppm Li (0.49% Li2CO3) achieved. Cypress has discovered additional high lithium grades in non-hectorite claystones over wide areas on surface at the Dean Project that well exceed other reported Clayton Valley sediments and brines.
Cypress was very pleased with the results attained from its initial sampling program for lithium on the Company's new Dean Project. The initial lithium numbers encountered were very encouraging. Cypress then established a detailed grid pattern across all 2700 acres of the Dean property and proceeded with a further tightly controlled sampling program coinciding with a detailed geological mapping program.
In October 2016, Cypress initiated a Phase 2 detailed surface sampling program on the Company's 100% owned Dean Project. Another 72 samples were collected and submitted for analysis for lithium content.
December 2016 Phase 2 Dean Sampling Highlights:
• Maximum value in claystone/mudstone was 3,730 ppm lithium (1.98% Li2CO3 equivalent);
• 8 samples assayed greater than 2000 ppm lithium (>1.06% Li2CO3 equivalent);
• 29 samples assayed greater than 1000 ppm lithium (>0.53% Li2CO3 equivalent);
• An area of >2 square kilometers has been identified as a new high-grade zone;
• New zone named the Frontera Verde Zone and is open for expansion to the north and south;
• Initial chip channel samples demonstrate vertical continuity of mineralization to 3.25 meters;
• BLM permitting is underway in preparation for drilling of the new zone.
Several first order targets are now being defined on the Dean property which include extensive outcropping of altered green evaporate-rich volcanoclastic claystone/mudstone exposure known as the Frontera Verde Zone. The Frontera Verde Zone covers an area of greater than 2 square kilometers. The average lithium grade of the Frontera Verde Zone is greater than 1500 ppm Li (>0.80% Li2CO3). The geology consists predominantly of uplifted exposed lake bed claystone and mudstone sequences and ash tuffs, covered by thin (less than 2 meters) layer of channel wash gravels.
Previous solubility lab testing on the claystones from Cypress' Glory Project to the immediate south of Cypress' Dean property have shown an impressive average of 35% Li recovery using a water leach and 95% Li recovery using a dilute Aqua Regia leach process. The data shows that a readily soluble non-hectorite mineral form of lithium-rich claystone exist at surface covering an area of 1 1/2 by 5 kilometers long at Cypress' Glory and Dean Clayton Valley projects.
Cypress is proceeding with additional leach studies with the Dean assays to determine the amount of lithium extraction possible from the Dean claystones. A modified dilute Aqua Regia leach process (ME-MS41W) and a deionized water leach process (ME-MS03) will be done by ALS / Chemex Lab in Reno, Nevada to provide further data on the feasibility of a large scale leach extraction method of lithium from the abundant mineralized claystones. The goal of this work is to substantiate the potential to produce lithium directly from the mineralized claystones with a low cost and environmentally friendly approach without the need for roasting or other costly mining and complex treatments.
Cypress has been proactive in exploring the central Clayton Valley for lithium since late 2015. The Company's objective continues to be the assembling of prospective land packages for lithium exploration potential concentrated on ground adjacent to current production and the best advanced-stage exploration projects undergoing active development for new lithium resources in the basin. The acquisition of the Dean Clayton Valley Project is the latest result in this effort.
Analysis of Deionized Water Leach Assay Results from Dean Lithium Project:
A total of fifty surface samples from the Dean property have been analyzed by ALS Chemex's lab in Reno, Nevada using method ME-MS03. This method involves using deionized water as the leach agent for extraction of easily soluble minerals and other element ions that are present in the prepared rock sample pulps.
The purpose of this work was an initial evaluation of extraction of lithium and other elements from the samples using water only. The important questions to answer in this study were the solubility of lithium in water and also the solubility of other associated evaporite elements such as sodium, potassium, magnesium and calcium.
Data, Methodology and Results:
The core data for this study were assay results from two fundamentally different assay procedures. The methods are;
The results of this study are formed by comparing the assays from these two very different methods for the elements of importance in the Clayton Valley; lithium (Li), magnesium (Mg), calcium (Ca), potassium (K) and sodium (Na).
An ideal outcome of a water leach assay would be a large percentage extraction of lithium along with a low percentage extraction of other evaporite elements, especially magnesium and calcium, versus the assays of these elements in the four acid method.
The results of the fifty deionized water leach assays show exactly that, strong extraction of lithium with very low extraction of magnesium and calcium. The water and soluble element "synthetic brine" produced for assay from the samples has very similar chemistry to that of reported chemistry of production brines from the Clayton Valley and to brines reported by Pure Energy Minerals within their northern resource area.
This similarity of the "synthetic brine" from the Cypress deionized water leach assay (ALS Chemex method ME-MS03) compared to production and resource brines in the Clayton Valley is most clearly seen in the ratios of lithium vs. other evaporite elements in solution. These ratios are the standard reporting structure for the evaluation of the chemical quality of brines worldwide. In particular, relatively high amounts of lithium in comparison to the amount of magnesium and calcium in solution that are critical parameters in evaluating the suitability of a brine for processing using both traditional and new-era lithium production processes.
Cypress used public data that exists for a number of samples of these production and resource brines for this study. These data came from Pure Energy's July 28, 2015 NI 43-101 Technical Report on its Clayton Valley South lithium project and from subsequent news releases by Pure Energy Minerals. The inclusion of chemical data on Albemarle's production brines was possible by examining public data on these brines which are reported as part of Albemarle's annual reporting requirements to the Nevada Department of Environmental Protection and to the State of Nevada Water Resources.
The key results of the Cypress solubility study are presented below beginning with a side by side comparison of assays (in percentage) of the important elements in the rock samples as reported by ALS Chemex for the two different assay methods. The pairs of numbers for each method represent the average for the fifty samples in the study:
Water Solubility of Lithium from Surface Rock Samples Comparison of Assays from Four Acid Digestion and Distilled Water Methods:
The results from the table above show that the deionized water leach assay method would result in a water solution containing an average of 0.05% Li, 0.14% Mg, 0.11% Ca, 0.29% K, and 2.9% Na. These results are compared to other basin brine chemistries below in this study. The values are straight assay values for the elements as found in the deionized water solution used in the assay procedure.
The study looked at the solubility of each of the important elements in a fashion which compares the complete extraction of each element in the four acid method versus the partial extract using only deionized water.
As the chart below clearly shows, two elements, lithium and sodium, show strong solubility into water versus a four acid solution while the remainder of the elements show remarkably low solubility in water versus a four acid solution. The difference is significant and the result is that a water solution is created which contains approximately 42% of the lithium and 81% of the sodium of the original rock but contains only trace amounts of the undesirable elements magnesium, calcium and potassium, all of which are less than 1%.
The table below compares the solution chemistry of the Dean deionized water "synthetic brine" produced by ALS Chemex during the ME-MS03 assays to actual production and resource brines in the Clayton Valley. Note that the lithium value for the water leach solution from Dean claystones is more than double that of the Pure Energy brine and is four times that of the Albemarle production brine.
The data is significant when comparing the chemistry of the Cypress synthetic brine with two examples of brines from the Clayton Valley. As can be seen in the chart above, the Cypress synthetic brine is materially higher in lithium than the resource brine of Pure Energy Minerals or the production brine of Albemarle's Silver Peak Mine.
The results needed to be viewed in relation to the other elements to more clearly see if these three different solutions containing lithium and other elements are truly similar. To do this, Cypress looked at ratios of lithium with the other elements in each sample. This produced the critical metal ratios which are used for the evaluation of the processing characteristics of brines in terms of efficiency of lithium extraction from the mineral brines.
The metal ratios for each of the three mineral brines are presented below:
The ratio data above compares in an effective way the chemistries of a synthetic brine made from surface outcropping claystones on the Cypress Dean property with basin brines of the Clayton Valley. The ratios suggest that the synthetic brine is chemically very similar to the two selected basin brines. This is particular true in the critical magnesium/lithium (Mg/Li) ratio where the total range of values for the three solutions falls within a narrow range.
The following points are apparent and supported by the mineral solubility data:
The potential for the existence of ground water mineral brines under and immediately adjacent to the exposed belt of lithium rich rocks is high as the water flow pathways for the recharge system are likely to be vertical as well as horizontal.Lithium Mining Infrastructure in Clayton Valley, Nevada:
The Silver Peak area is one of the oldest mining areas in Nevada having produced substantial amounts of silver, gold, lithium and other minerals.
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., Exploration Manager 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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