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 has discovered a large 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.
Lithium mineralization occurs within montmorillonite clays throughout the sediments to a depth of at least 120 meters. Metallurgical testing indicates low cost processing can be achieved by leaching with low acid consumption (125 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.
In August 2020, Global Resource Engineering (GRE) completed an updated Mineral Resource Estimate for the Company's Clayton Valley Lithium Project utilizing the same economic and mining parameters found in the Company's May 2020 Prefeasibility Study (PFS). Measured and Indicated Mineral Resources increased 55% to 929.6 million tonnes averaging 1,062 ppm Li (5.2 Mt LCE) based on a cut-off grade of 900 ppm Li. No changes in the PFS Mineral Reserves, mine design or production schedule have been made at this time.
Cypress believes these features, along with a favorable geographical setting of the resource makes the Clayton Valley Project a premier source that has the potential to significantly impact the production of lithium in the United States.
Positive Prefeasibility Study
In May 2020, Cypress announced positive results from a Prefeasibility Study (PFS) for the Company's Clayton Valley Lithium Project in Nevada. The PFS was prepared by Continental Metallurgical Services (CMS) and Global Resource Engineering (GRE). Todd Fayram (CMS), Terre Lane (GRE), and Daniel Kalmbach are the authors.
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$3,329 per tonne LCE.
- After-tax net present value (NPV-8%) of US$1.052 billion at 8% discount rate and 25.8% internal rate of return (IRR).
- Production based on Probable Mineral Reserve of 222 million tonnes averaging 1,141 ppm Li (1.353 Mt LCE) based on a cut-off grade of 900 ppm Li.
- Reserves and production plan derived from Measured and Indicated Mineral Resources of 593 million tonnes averaging 1,073 ppm Li (3.387 Mt LCE).
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 key features of the lithium claystone deposit include its large size, surface exposure and flat-lying nature. These features allow mining with negligible strip ratio (0.15:1) due to minimal overburden and no interbedded waste, and no drilling or blasting in excavation. Metallurgical testing indicates low-cost processing can be achieved by leaching with low acid consumption (125 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 costs.
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, and are based on a cut-off grade of 900 ppm Li.
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$3,329 per tonne LCE
- US$1.052 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 with direct benifits for both Nevada and the United States. Key features of the lithium claystone deposit include its large size, surface exposure and flat-lying nature. These features allow mining with negligible strip ratio of 0.15:1 due to minimal overburden and no interbedded waste, and no drilling or blasting in excavation. Metallurgical testing indicates low-cost processing can be achieved by leaching with low acid consumption.
The initiation of field studies is included in the May 2020 Prefeasibility Study recommendations and baseline environmental studies for the Clayton Valley Project are underway. A Phase I Environmental Site Assessment of the Project was conducted in 2019 and found no existing environmental liabilities. A Threatened and Endangered Species Preliminary Study was also completed.
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. The time frame for permitting the Clayton Valley Project is estimated at 18 to 24 months.
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.