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Green Energy Lithium Project
The Green Energy project hosts a brine deposit containing 40% minerals, including lithium, potash, magnesium, boron and bromine. Engineers in the mid-1960s reported a minimum reservoir of 15 million barrels with upside in the hundreds of millions of barrels. Using current commodity prices for lithium, potash and magnesium the brine has a gross value of $30.00 per barrel.
The reservoir volume, grades, and other technical data are taken from historical estimates prior to the implementation of NI 43-101. A qualified person as defined under NI 43-101 has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. Mesa Exploration is not treating the historical estimates as current mineral resources or mineral reserves as defined in NI 43-101.
Resource Potential
Technical evaluations made on the historic brine occurences concluded that the brine reservoir occurs over an extensive 50 square mile area. The reservoir is recharged from fresh in-flows as indicated by well pressure measurements, drawdown tests and oxygen-deuterium isotopes. The brine grades as high as 1,700 parts per million (ppm) lithium and 8% potash.
Historic Exploration
The super-saturated mineral brine zone was discovered accidentally in the 1960s when oil exploration encountered brine flowing up to 1,000 gallons per minute. The area was explored extensively for oil and gas in the 1960s, targeting oil traps in the Cane Creek anticline. Oil and gas was discovered and is still being produced. Only one well was drilled specifically for brine, the Roberts Brine well, in 1967. The well was able to penetrate the top six feet of the thirty foot thick host rock due to tremendous pressure. Brine flowed from the well for several days at an impressive rate of 11,800 barrels per day (519,000 gallons). Pressure chokes were not used which allowed the minerals in the brine to become crystaline and eventually the drill stem became clogged. Efforts to clear the drill stem were unsuccessful and exploration work ceased; modern techniques will keep this from occuring.
Project Summary
The Green Energy property is underlain by a thick series of Mesozoic and Paleozoic sedimentary rocks which make up the Paradox Basin of the north central Colorado Plateau. The Paradox Basin is a large sedimentary basin with a NW-SE long axis. Economic interest in this area has centered on oil and gas production from strata of Devonian, Mississippian and Pennsylvanian age. Regional subsidence in early Pennsylvanian time created a large sedimentary basin with a restricted marine environment, resulting in multiple thick deposits of evaporate minerals including salt and potash. This Pennsylvanian stratigraphic unit is named the Paradox Member of the Hermosa Formation, which contains salt and potash and interbedded dolomite, shale, siltstone. There are several salt and potash horizons in the Paradox, but only one potash mine has been developed, the Cane Creek Mine, about 6 miles southwest of Moab, Utah. It started as an underground mine in 1965, was converted to a solution mine in the early 1970's and is still in production.
During oil and gas exploration there were several blow-outs caused by the intersection of brines under significant pressure within the Paradox unit. These brines were initially considered a nuisance to drilling but were found to often be super-saturated brines containing high amounts of potash, sodium chloride, magnesium chloride, lithium, bromine, boron and other potentially payable minerals. Only a few holes were drilled specifically to test these brines and all supported the conclusion that these brines could be an economically important resource.
Exploration Program
Mesa's Lithium Exploration Group is planning a work program to obtain modern brine samples for chemical analysis and metallurgical testing. Engineering characteristics of the host formation will also be tested to establish pressure, temperature, artesian and precipitation characteristics of the aquifer. The information collected in this drilling will provide the basis for preliminary economic evaluation and metallurgical testing.
Potential Economics
Brine mines are more economic to mine and can be put into production faster and with less CAPEX than conventional open-pit or underground mines. Brine is also less expensive to process than hard rock mines. According to estimates by Credit Suisse, lithium produced from brine costs around $1,500 to $2,300 per ton, while lithium from hard rock mines costs $4,200 to $4,500 per ton.
Brine Chemistry, values as high as:
- 1,700 ppm lithium (0.9% Li2CO3)
- 7.9% potash
- 18.7% magnesium chloride
- 13% salt
- 6,100 ppm bromine
- 1,260 ppm boron
About Lithium
- Lithium has a variety of industrial and commercial applications with the use of lithium in rechargeable batteries accounting for 20% to 25% of all lithium demand. The current global market for rechargeable lithium batteries is over $4 billion per year with demand expected to grow by 20% per annum.
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Increase in demand coming, with 75 new makes of hybrid electric cars in showrooms in 2011, including Mercedes S400 and E-Class, M-Class, and GL-Class, Nissan Leaf, Ford Focus, BMW Mini-E, Chrysler and Jeep hybrids and the Chinese Hafei and Codas.
- Global production of lithium in 2009 was estimated at 18,000 tonnes per annum with 90% of production coming from Argentina, Chile, China and Australia. Overall lithium demand is projected to grow at 4% to 5% per year.
- The United States currently has only one domestic source of lithium raw material: Chemetall Foote's lithium brine operation near Silver Peak, Nevada. Annual production is estimated at 1,200 tonnes of lithium from brines with lithium concentrations of 166 ppm to 1,000 ppm. Total production since 1967 is estimated at 50,000 tonnes of lithium.
- Lithium for batteries is an important part of clean energy solutions being pursued in the United States. In August 2009, the United States announced over $2.4 billion in funding for deployment of electric vehicles, batteries, and components in the United States. Chemetall Foote was granted $28.4 million to expand and upgrade the production of lithium carbonate at the Silver Peak Nevada site and to add production of very high purity lithium hydroxide at a North Carolina facility.
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