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Dean Lithium Project, Nevada

Cypress' Dean Lithium Claystone Project in Clayton Valley, Nevada

Cypress holds a 100% interest in the 2,700 acre (35 association placer and lode 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 Dean & Glory Clayton Valley Lithium Project, Nevada Location MapCypress Dean Lithium Project in Clayton Valley, Nevada location map:

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.

In the fall of 2016, Cypress compiled and reviewed available geological data relating to Cypress' Dean property. The data appeared to indicate favorable lithium brine exploration targets on the property. Several targets existed 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.

Lithium-Rich Claystone Outcropping at Cypress' Dean Clayton Valley Project, NevadaLithium-rich claystone discovered outcropping at Cypress' Dean Clayton Valley Project:

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.

Cypress Dean & Glory, Nevada Map Showing Angel Island Fault Sept. 2016Cypress Dean Clayton Valley, Nevada Sept. 2016 sampling map:

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.

Bedded Ash Unit Overlying Salty Green Lithium-Rich Claystone at Cypress' Dean Project, NevadaBedded ash unit overlying salty green lithium-rich claystone at Dean Project, Nevada:

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.

Known Lithium Mineralization in Clayton Valley, Nevada MapKnown lithium mineralization in Clayton Valley, Nevada map:

2016 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.
Dean Project Channel Samples of Lithium-Rich Claystone, NevadaDean Project channel samples of lithium-rich claystone:
Dean Project Chip Channel Samples of Lithium-Rich Claystone, NevadaDean Project chip channel samples of lithium-rich claystone:

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.

Dean Project, Nevada Phase 1 Drill Hole Map March 2017Cypress Dean Project, Nevada Phase 1 Drill Hole Map:

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.
Dean Project, Nevada Hole 9 of Lithium Enriched Core March 2017Cypress Dean Project Core Pic from 2017 Phase 1 Drill Program, Nevada:
Dean Project Drilling at Hole 9 in Clayton Valley, Nevada March 2017Cypress Dean Project Pic from 2017 Phase 1 Drilling in Clayton Valley, Nevada:

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 Leach Testing of the Claystone:

Metallurgical tests have shown the claystone is weak acid leachable with lithium extractions over 80% in 4 to 8 hours in agitated leach tests using sulfuric acid. These high extractions indicate the dominant lithium-bearing minerals present are not hectorite, a refractory clay mineral which requires roasting to liberate the lithium.

2017 Phase 2 Drill Program at Cypress' Dean Clayton Valley Project:

Cypress 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 allowed 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 2017 Phase 2 drilling program on the Dean property was designed to provide further infill data.

Dean Project, Nevada Phase 1 Drill Hole Map March 2017Cypress Dean Project, Nevada Oct. 2017 Phase 2 Planned Drill Hole Map:

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. 

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.

Albemarle Silver Peak (Rockwood Lithium) Mine Complex, Clayton Valley, NevadaAlbemarle Silver Peak Lithium Mine Complex 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.

Lithium Uses:

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.

William Willoughby, PhD, PE, Director & CEO of Cypress Development Corp. is a Qualified Person as defined by National Instrument 43-101 and has approved the technical information on this web site.

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