Cypress' Dean Lithium Claystone Project in Clayton Valley, Nevada
Cypress holds a 100% interest in the 2,700 acre (35 association placer claims) Dean Project located in the heart of the Clayton Valley lithium production and exploration area of Esmeralda County, Nevada. The Company's Dean Project is located to the immediate east of the Albemarle Silver Peak Lithium Mine with Cypress' Glory Project on its south boundary and Pure Energy Minerals project on its southwest boundary.
Cypress' highly prospective Dean property is located within 200 meters east of producing lithium brine wells belonging to the Silver Peak Mine operated by Albemarle (NYSE: ALB). The Dean property is tied onto the immediate north of Cypress' Glory Project and abuts the northern resource area of Pure Energy Minerals project. The Pure Energy potential production wells SPD 9, CV1, CV3 are located 500 meters from the southwest area of Cypress' Dean Project.
Cypress' Dean Project includes an exposure known as 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 "claystone". This mineralized non-hectorite claystone is 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 claystone 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 claystone. These lithium-rich claystone exposures are believed to 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.
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 equivalent) with an overall average grade of 925 ppm Li (0.49% Li2CO3) achieved. Cypress had discovered high lithium grades in a non-hectorite claystone over a wide area on surface at the Dean Project that well exceeded other reported Clayton Valley sediments and brines.
The initial surface sampling of the Dean Claims Group revealed a large area of strong lithium mineralization in calcareous, volcanoclastic, mudstones, claystones and volcanic ash units. The surface mineralization was essentially identical to Cypress' Glory Project mineralization, on the south boundary of the Dean property, where similar lithium grades had been discovered from a property wide sampling program.
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.
Phase 2 Dean Project 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 was identified as a new high-grade zone;
- Initial chip channel samples demonstrate vertical continuity of mineralization to 3.25 meters;
- BLM permitting got underway in preparation for drilling the new zone.
Several first order targets were defined on the Dean property which included extensive outcropping of altered green evaporate-rich volcanoclastic claystone/mudstone exposures. The new zone covers an area of greater than 2 square kilometers. The average lithium grade 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.
In May 2017, a nine hole exploratory Phase 1 core drill program was carried out on the Dean Project under the supervision of Cypress VP of Exploration Robert Marvin, PGeo.
Highlights of 2017 Phase 1 Dean Exploratory Drill Program:
- All Lithium mineralized intercepts at Dean start at near surface;
- Explored portions of Dean Property averages greater than 1000 ppm Li;
- Average Li mineralized thickness is greater than 220 feet;
- The thick, tabular zone of pervasive Li mineralization is considered to be open in all directions;
- Drill data to date outline a Li mineralized zone of 4 km x 2 km;
- Lithium mineralization appears to thicken and increase in grade towards the east;
- Potential exists for a water leach followed by dilute acid wash to mobilize lithium into solution;
- Laboratory studies continue to explore the highly reactive and soluble nature of the large volume of lithium enriched rock seen outcropping at Dean;
- Targeting of more core holes is being planned.
The nine drill holes clearly show that a very large, tabular, lithium mineralized formation underlies the Dean Property. All nine holes had intersected continuous, consistent grades of lithium mineralization of +1,000 ppm Li on average.
Solubility Lab Testing on the Dean & Glory Claystone:
Solubility lab testing on claystone samples from across Cypress' Glory Project, to the immediate south of the 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 7 kilometers long across 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 claystone. A modified dilute Aqua Regia leach process (ME-MS41W) and a deionized water leach process (ME-MS03) were completed 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 claystone. The goal of this work is to substantiate the potential to produce lithium directly from the mineralized claystone 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 Claystone Water Leach and Synthetic Lithium Brine Study:
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;
- ME-ICP61 method known as a four acid assay as it uses a mixture of acids to completely dissolve the sample in a highly corrosive solution of acids. The resulting solution is then analyzed for the amounts of individual elements present, here expressed as percent (%). This assay method produces a complete accounting of the make-up of the rock being assayed, nothing is left behind. This is known as complete digestion.
- ME-MS03 method which uses only deionized water as the leaching solution. Assay results from this method will be entirely dependent of the solubility, in water, of the minerals or ion complexes that occur in the sample. This method will not extract elements from many minerals including silicates, sulfides, carbonates etc.
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.
For Cypress, the comparison of the lithium to calcium, sodium, potassium and magnesium ratios for our deionized water leach brine, or synthetic brine, to the same ratios for both production brines and brines included in lithium resource estimates within the Clayton Valley is of critical importance in providing a first order estimation of the suitability of these synthetic brines for lithium extraction processing using either the traditional evaporation and precipitation process similar to Albemarle's Silver Peak Mine or for possible processing in one of the new processes being developed by Pure Energy Minerals and others.
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%.
|Solubility in Deionized Water vs. 4 Acid Digestion:|
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 the Dean claystone is more than double that of the Pure Energy brine and is four times that of the Albemarle production brine.
|Element||Dean Claystone||CV-1 (@700 feet)||Well 392|
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:
|Ratio||Dean Claystone||CV-1 (@700 feet)||Well 392|
The ratio data above compares in an effective way the chemistries of a synthetic brine made from the surface outcropping claystone 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:
- It appears that a lithium bearing mineral solution that is chemically similar to the production and resource brines of the Clayton Valley can be produced by the leaching of surface exposed evaporate stratigraphy in water.
- Comparison of ratios with other important elements also shows the Dean "Synthetic Brine" to compare favorably with basin production brines.
- The data provides further strong support for the idea that the production brines of the basin are being continuously recharged by leaching of lithium and other elements from the uplifted and exposed former lake basin sediments that outcrop in a wide belt along the east margin of the Clayton Valley.
- This recharge mechanism strongly supports the importance of the outcropping and buried claystone as a very significant lithium source rock. Our chemistry work-up as presented here shows how rain water and underground aquifers would extract lithium and sodium from the mineralized basin sediments at much higher rates than the extraction of magnesium and calcium. This process would neatly account for the chemistry of basin production brines versus the chemistry of the source rock claystone.
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.
2017 Planned Phase 2 Drill Program at Cypress' Dean Clayton Valley Project:
Cypress has received an Area of Disturbance Permit from the U.S. Bureau of Land Management (BLM) Nevada for Cypress' Dean Lithium Project in Clayton Valley. The BLM Permit allows Cypress to move forward with a second series of diamond drill holes on the Dean Project using NQ diamond drill core methods of approximately 2 inch diameter core. The planned 2017 Phase 2 drilling program on the Dean property is designed to provide further infill data.
The discovered lithium mineralization at the Dean Project is ideally located within a basin that hosts the only significant lithium production in the United States. Cypress' Clayton Valley, Nevada Projects are in close proximity to essential mining infrastructure.
Cypress Development believes this lithium discovery has the scale to significantly impact the future production of lithium in the Clayton Valley. Cypress also believes this developing zone could very well represent a long-term, reliable supply of lithium given the location, known size, chemistry and geometry of the discovery.
The consistent nature of the currently known lithium mineralization at Dean is highly encouraging for both the potential size and potential resource extraction methodologies. The drill data to date, which outlines an area of roughly two kilometers by four kilometers at the Dean Project, presents a strong starting point for planning a resource estimation. Additional drilling should allow the Company to contemplate a sizable maiden lithium resource calculation on the Dean Project.
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.
- Well maintained state highways connect Silver Peak to the main road network in Nevada
- Nevada has fostered a thriving mining industry with associated development expertise, construction and operations services and a mature regulatory environment
- Single best mining jurisdiction in the U.S. and ranked 3rd globally by the respected "Fraser Institute's annual Survey of Mining Countries"
- Graded and maintained gravel roads link Silver Peak to the southern half of Clayton Valley
- Nearest rail system is in Hawthorne, Nevada, approximately 90 miles by road
- Public use airport in Tonopah with two runways
- Electrical connection is possible at the sub-station in Silver Peak
- Water supply is currently served by the Silver Peak municipal water supply
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 construction of additional large-scale lithium battery factories are based on the potential of lithium batteries as an all purpose energy storage unit 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.
There is a very good reason why lithium in batteries has become the metal of choice. Lithium is the most reactive metal known, also the lightest, with an atomic number of 3. Used in batteries, lithium provides much better energy per volume ratio or energy density than an ordinary alkaline battery or other common rechargeable battery such as a nickel-metal hydride. This is in part because lithium is the third-smallest element after hydrogen and helium, and thus a lithium ion can carry a positive charge in a very small amount of space. Lithium-ion batteries can be recharged by running the anode and cathode reactions in reverse and the ability to be recharged many times over without much loss of capacity is another major advantage of the lithium-ion battery.
Lithium metal is also 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.