Junior Finds High-Priority Lithium Targets in Quebec

Quebec Precious Metals Corp. (QPM:TSX.V; CJCFF:OTCQB;YXEP:FSE) announced that high-priority lithium targets have been identified during a detailed study of its projects in the Eeyou Istchee James Bay territory in Quebec.

The targets were generated through an analysis of more than 150 technical reports using artificial intelligence and a total of 52,289 rock samples and 8,278 sediment samples.

"We are very excited to sample the target areas to further demonstrate the lithium potential of our projects in a district that has some of the largest spodumene pegmatite resources in the world," QPM Chief Executive Officer Normand Champigny said. "All our projects are highly prospective for lithium and are located near advanced projects and recent significant lithium discoveries."

The analysis was carried out by ALS GoldSpot Discoveries Ltd. and generated detailed maps of targets, zones, and areas of focus for the company to explore further at its Sakami, Elmer East, and Cheechoo-Eleonore Trend projects.

Many lithium deposits in the region are hosted in pegmatite rocks, causing the company to take another look at its 1,338 claims cover 697 square kilometers, all 100%-owned, now that the scope of the green energy transition is becoming clearer.

"We know we have pegmatite on our gold projects, but we didn't focus on lithium," Champigny has said. "That was not the purpose of the creation of the company. But we almost have a moral obligation to find out. And so that's what we're doing now."

The Catalyst: Great Neighbors

Both Sakami and Elmer East have key mineral indicators and rock geochemistry highlighting lithium-cesium-tantalum pegmatite anomalies, which are associated with known lithium deposits in the area, the company said.

"It is to be noted that for the Sakami project the lithium targets identified have sometimes overlapping potential for the discovery of both lithium-bearing pegmatites and gold mineralization," the company said in a release.

Two main lithologic assemblages are present at the Cheechoo-Eleonore Trend project, QPM said. "The abundance of pegmatites and geochemical anomalies suggest a strong lithium potential," the company said.  

The company's projects are in a great neighborhood. Also in James Bay, Patriot Battery Metals Inc. (PMET:CA) discovered a 4.3-kilometer trend of spodumene pegmatite at its Corvette project in 2017. Its market cap was nearly CA$500 million last fall. Now, it's CA$1.27 billion.

"We believe the Corvette property is evolving into a world-class spodumene resource," analysts Anoop Prihar and Alex Riazanov of Eight Capital wrote in a research note on May 29. "Based on the drill results released to date, we estimate the CV5 zone contains approximately 130mm tonnes of 1.16% Li2O mineralization. This, in turn, is likely sufficient to allow for 800,000 tonnes of spodumene production for 20 years. On this basis, PMET compares favorably to the highest-quality spodumene resources globally."

Lithium Market Deficits to Widen

Canadian leaders are selling the country as a backstop to shift supply chains away from South America and China, which has  less than a quarter of the world's lithium resources but controls about two-thirds of the world's lithium processing and refining capacity, Rystad Energy said.

The deficit between lithium demand and production and highly probable and probable lithium projects will be over 3.5 million tons (Mt) by 2040, according to Benchmark Mineral Intelligence.

QPM noted that its Elmer East project is located north to northwest of three significant lithium deposits being developed by Allkem Ltd. (OROCF;OTCMKTS), Critical Elements Corp. (CRE:TSX.V), and Investissement Québec and Livent Corp. (LTHM:NYSE)

The company also has entered a binding memorandum of understanding with Idaho Champion Gold Mines Canada Inc. (ITKO:CNX) for Idaho Champion to acquire a 100% interest in two other James Bay lithium pegmatite projects. QPM still has 6% of its shares.

The Eight Capital analysts also predicted that lithium market deficits would widen into the late 2020s, and those shortfalls will be driven by demand in North America.

The United States' electric vehicle (EV) penetration of 6% lags behind China's 26% and Europe's 20%, the Eight Capital analysts noted. But President Joe Biden's administration has committed to a target of 50% of new vehicle sales being EVs by 2030.

"We estimate North American lithium nameplate production capacity will be 262,900 LCE (million tonnes lithium carbonate) 2026 based on projects that currently have completed a Definitive Feasibility Study (DFS)," Prihar and Riazanov wrote. "Although this is a significant increase from the current North American production capacity of 6,000 tonnes LCE, it's still more than 128,000 tonnes short of what we anticipate will be required by the battery plants. As such, we anticipate the fundamentals underlying lithium demand to remain robust."

A soft, silvery metal with highly reactive and flammable properties, lithium is a major component of electric vehicle (EV) batteries. It's also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.

Ownership and Share Structure

Major mining company Newmont Corp. (NEM:NYSE) owns about 13% of QPM. Government-backed Caisse de Dépôt et Placement du Québec and other Québec institutions own about 12%.

QPM management and insiders own about 15%, including non-executive Chairman James Shannon with 905,000 shares and Champigny with 277,000 shares, the company said.

The rest, 60%, is retail.

The company is covered by newsletter writer Chris Temple of The National Investor.

Quebec Precious Metals has a market cap of CA$6.26 million and 94.27 million shares outstanding, of which 81.61 million are free-floating. It trades in a 52-week range of CA$0.13 to CA$0.06.

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2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Quebec Precious Metals Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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