Property Tour by CEO Dr. Bill Willoughby of Clayton Valley Project in Nevada
Cypress owns 100% of the Clayton Valley Lithium Project totalling 5,430 acres in southwest Nevada, USA. The Clayton Valley Project is located immediately east of Albemarle’s Silver Peak mine, North America’s only lithium brine operation, which has been in continuous operation since 1966. Exploration and development by Cypress lead to the discovery of a world-class resource of lithium-bearing claystone adjacent to the brine field to the east and south of Angel Island, an outcrop of Paleozoic carbonates protruding up through the lakebed sediments. The Company is working towards a Feasibility Study and permitting of a mine and metallurgical facility for its large deposit of lithium-bearing claystone.
Lithium mineralization occurs within montmorillonite clays throughout the sediments to a depth of at least 150 meters. Metallurgical testing indicates low cost processing can be achieved by leaching with low acid consumption (126 kg/t) and high lithium recovery over 85% Li. These high extractions prove the dominant lithium-bearing minerals present are not hectorite, a refractory clay mineral which requires roasting and/or high acid consumption to liberate the lithium.
Low Cost Opportunity
The key features of the Clayton Valley Project include the large flat-lying nature of the lithium claystone deposit. These features allow mining with a low strip ratio (0.29:1) due to minimal overburden and no interbedded waste. Surface mining will require no drilling or blasting in excavation. Metallurgical testing indicates low-cost processing can be achieved by leaching with low acid consumption (126 kg/t) and high lithium recovery over 85%. Self-generated power from a 2,500 tpd sulfuric acid plant is included in the project’s Prefeasibility Study costs.
In March 2021, Cypress announced the development of a lithium hydroxide pilot plant at del Sol Refining & extraction facility, south of Beatty, Nevada. The operation of the pilot plant will provide essential data for a planned Feasibility Study and enable Cypress to produce marketing samples to support negotiations with potential offtake and strategic partners.
The Company will be using a chloride-based approach for the initial configuration of the pilot plant. Results from an internal scoping study demonstrated several benefits utilizing chloride-based leaching to liberate the lithium from the claystone in the areas of economy, process, and the environment. A sulfate-based approach, as detailed in the project’s August 2020 Prefeasibility Study below, remains a viable alternative.
Positive Prefeasibility Study
A positive Prefeasibility Study (PFS) for the Company's Clayton Valley Lithium Project in Nevada was prepared by Continental Metallurgical Services (CMS) and Global Resource Engineering (GRE). Todd Fayram, MMSA-QP (CMS), Terre Lane, MMSA-QP (GRE) and J.J. Brown, SME-RM (GRE). The Report has an Effective Date of August 5, 2020 and was amended March 15, 2021.
Highlights of Prefeasibility Study:
- Average production rate of 15,000 tonnes per day to produce 27,400 tonnes lithium carbonate equivalent (LCE) annually over a 40-year mine life.
- Lithium Carbonate price of $9,500 per tonne.
- Capital cost estimate of US$493 million, pre-production and operating cost estimate averaging US$3,387 per tonne LCE.
- After-tax net present value (NPV-8%) of US$1.03 billion at 8% discount rate and 25.8% internal rate of return (IRR).
- Production based on Probable Mineral Reserve of 213 million tonnes averaging 1,129 ppm Li (1.28 Mt LCE) based on a cut-off grade of 900 ppm Li.
- Reserves and production plan derived from an Indicated Mineral Resource of 1,304 million tonnes averaging 905 ppm Li (6.28 Mt LCE) based on cut-off grade of 400 ppm Li.
Cypress CEO Dr. Bill Willoughby stated "This PFS is a major milestone for Cypress. These positive results take us closer to our goal of developing a world-class lithium deposit. Cypress’ land position and resources afford us the opportunity for a long-life project with low operating costs and potential to be a significant source of lithium for the United States.”
The Project’s large resource allows the mineral resources and reserves for the PFS to be derived from only a portion of the property (Initial Pit) showing a mine life of +40 years. All resources and reserves are pit-constrained by property and geologic boundaries.
Results for the PFS are:
- Average annual production of 27,400 tonnes per year LCE
- Mine life for PFS of +40 years
- Lithium Carbonate price of $9,500 per tonne
- Industry-low cash cost of US$3,387 per tonne LCE
- US$1.03 billion NPV at 8% discount rate, after-tax basis
- After-tax internal rate of return (IRR) of 25.8%
- Capex payback period of 4.4 years
Interview with CEO Dr. Bill Willoughby, PE of Cypress Development – July 2020
The Prefeasibility Study supports further work with the recommendation to conduct a pilot plant study and initiating a Feasibility Study and permitting. The Company intends to invite proposals that can add value to the Project and Cypress through financial, technical, operating or marketing capabilities. Cypress Development is advancing its Clayton Valley Project in Nevada towards the production of high-purity lithium hydroxide (LiOH) suitable for tier one EV battery usage.
Sustainability and the Environment
The Clayton Valley Project has the potential to be a sustainable long-term low-cost producer of lithium. Key features of the claystone deposit include its large size, surface exposure and flat-lying nature. These features allow mining with negligible strip ratio of 0.29:1 due to minimal overburden and no interbedded waste, and no drilling or blasting in excavation.
In December 2020, Cypress received a Biological Baseline Report for the Company's Clayton Valley Project. The 183-page report was prepared by consultants, Stantec Consulting Services Inc. of Reno, Nevada. Stantec performed the biological surveys for vegetation and wildlife in the spring, summer, and fall of 2020. In the surveys, no threatened or endangered species were found.
Environmental permitting requirements for the Clayton Valley Project are expected to be like other mines in Nevada. The permitting process consists of submitting a Plan Of Operations to the Bureau of Land Management, who will act as lead agency, conducting environmental baseline studies, and preparing an Environmental Impact Statement along with other permit applications prior to site development and operations.
Cypress Development is committed to creating value for all stakeholders, including the environment and communities around us, through sustainable and responsible mining.
William Willoughby, PhD, PE, Director and CEO of Cypress Development Corp. is a Qualified Person as defined by National Instrument 43-101 and has approved the technical information on this website.