Co. Enters Quebec With Acquisition of Prospective Lithium Project

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American Salars Lithium Inc. (USLI:CSE; USLIF:OTC; Z3P:FWB; A3E2NY:WKN) announced it has signed a mineral claims purchase agreement with an arm's length vendor to acquire 100% of the Lac Simard South Project in Quebec.

The more than 3,600-hectare project covers 64 claim blocks contiguous to projects owned by Sayona Mining Ltd. and Refined Metals Corp.'s Lac Simard property that sampled 2.1% lithium (4.52% lithium oxide or Li2O) and 5.88% tantalum oxide (Ta2O5), the company said.

"This is the company's entry point into Quebec with the intention of building a strategic portfolio of hard rock lithium projects to complement our lithium brine assets," Director and Chief Executive Officer R. Nick Horsley said. "The company's long-term belief in a lithium price rebound is steadfast and now is the time to build a multi-jurisdictional lithium company."

The Lac Simard South project is about 80 kilometers southwest of Sayona’s Authier lithium project and spans the townships of Beauneville, Clérion, Delbreuil, and ChabertIt, and is accessible by gravel road off Route 117 near the municipality of Cadillac, American Salars said.

"The claims in the eastern sector are accessible by a network of logging roads; the southern and western sectors are accessible by boat or all-terrain vehicle and has very little overburden," the company said in a release.

American Salars said it will begin planning for a work program to identify targets and test areas at the project, which is in an "active lithium exploration, production, and processing region of mining-friendly Quebec."

Located nearby is Sayona's Abitibi Hub — made up of its North American, Authier, and Tansim lithium projects — which boasts a "staggering aggregate measured and indicated resource of 111 million tonnes grading 1.14% lithium, the largest lithium resource in Quebec," American Salars said.

The company also noted the lithium hub's accessibility provides relatively lower exploration costs than James Bay, and the area has a fully operating lithium concentrator and a planned lithium carbonate/hydroxide conversion plant.

Additional Projects Being Reviewed, Co. Says

Under the agreement, American Salars is acquiring a 100% interest in the Lac Simard South project by issuing 50,000 common shares to the vendor, Quartier Mineral Ltd of Quebec.

The company said additional lithium projects are still being reviewed and will be subject to further disclosure once due diligence is completed and any deals are completed.

"Our primary objective remains the acquisition of low-cost lithium brine assets in Argentina while expanding our existing NI 43-101 lithium brine resources," Horsley has said. "We believe that Quebec-based hard rock lithium assets can now be acquired at deeply discounted prices and advanced with critical mineral flow through financing incentives in anticipation of the next lithium rally."

Technical Analyst Clive Maund wrote that the entire "San Emidio Desert basin is a highly prospective lithium exploration zone."

The company's existing portfolio of lithium deposits includes two NI 43-101-compliant Inferred Mineral Resource Estimates (MREs) consisting of 457,000 tonnes of lithium carbonate equivalent (LCE) at the Candela 2 Lithium Brine Project and a shared MRE at the Pocitos 1 Lithium Brine Project consisting of 760,000 tonnes LCE. The Pocitos MRE is shared with the neighboring Pocitos 2 property, which is not under contract or owned by American Salars, but the company noted that none of the drilling that makes up a partial basis for the MRE took place on the Pocitos 2 block. Both brine projects are located in Salta Province, Argentina.

Major mining company Rio Tino recently invested in Argentina by acquiring Argentina lithium producer Arcadium Lithium for US$6.7 billion, making the company the world's third-largest lithium producer.

American Salars also recently released assay results from soil samples collected during its Phase 1 exploration program at its 100%-owned Black Rock South lithium project close to Tesla's Gigafactory in Nevada. Out of 38 samples, 33 recorded lithium concentration of more than 100 parts per million (ppm) or higher, the company said. The highest grade was 180.5 ppm with an average grade of 131 ppm across the 33 samples of the surface of the property.

'Basing Process' Underway for Commodity

Technical Analyst Clive Maund wrote that the entire "San Emidio Desert basin is a highly prospective lithium exploration zone."*

"After a massive speculative runup in 2020 and especially in 2021, the lithium price fell victim to a severe bear market that ran from mid-2022 through the end of 2023," Maund wrote. "By the end of last year, this bear market had exhausted itself, and a basing process began that has continued up to the present."

Black Rock South is also 215 miles northwest of the United States' only producing lithium mine, the Silver Peak lithium brine mine owned by Albermarle.

The Catalyst: Experts Predict Recovery

Lithium is critical in the energy transition for its use in batteries for electric vehicles (EVs) and other application and is also used in electronics, medicine, and other industries.

While prices have slumped this year after EV sales didn't hit predicted marks, many experts believe the market will recover.

According to a report by Grand View Research, market size for the metal was estimated at US$31.75 billion last year and is projected to grow at a compound annual growth rate (CAGR) of 17.7% from this year through 2030.

"The automotive application segment is expected to witness substantial growth, driven by stringent regulations imposed by government bodies on ICE automakers to reduce carbon dioxide emissions from vehicles," researchers at Grand View said. "This has shifted the interest of automakers toward producing EVs, which is anticipated to benefit the demand for lithium and related products."

EVs and battery storage primarily will fuel future growth of the lithium market, Marin Katusa of Katusa Research wrote recently. He pointed out that all major electric vehicle batteries require lithium, about 1.55 pounds per kilowatt hour of battery capacity, on average.

"I think the data speaks for itself that there's more growth and opportunity on the horizon," Katusa wrote.

The consensus among market analysts points to a recovery in lithium prices in the fourth quarter of 2024, Fastmarkets reported.

Ownership and Share Structure

American Salars said it has 28.8 million shares outstanding and 5.5 million warrants, according to the company.

As for insiders, the CEO Horsley owns about 1.83 million, or about 7.37%, with 4666,666 warrants. Strategic investor Hillcrest Merchant Partners owns 1 million shares or 4.03%. There are no institutional investors, and the rest is retail.

Its market cap is CA$4.79 million. It trades in a 52-week range of CA$0.45 and CA$0.08.