So, what is Nevada’s state nickname? Well, for those of you trivia buffs scoring at home, it’s the Silver State and over the past 150 years or so Nevada has produced hundreds of millions of ounces of the precious metal. And while significant silver mining is still a robust enterprise in Nevada, there is an even more intriguing metal that has investors in the industrial metals space beguiled – lithium.

This soft, silvery-white alkali metal is earth’s lightest metal and solid element. Lithium is vitally essential as a power source…from smartphones and computer tablets to solar panels and electric vehicles (EVs). Over the past few years, Stockhouse has written in-depth on the surging lithium demand for these vital products.

Today, lithium-ion batteries are the default choice for most personal electronics and the vast majority of electric and hybrid vehicles. Why? Because they have a higher energy density than other technologies. The lithium-ion battery revolution began in earnest in the early 1990s after Sony and several other companies released the first commercial version of the new battery technology. Now that lithium-ion batteries are the predominant choice for many applications – particularly EVs – questions about the global supply of lithium are timely. In short, can lithium-ion batteries scale up with increased demand?

Enter Belmont Resources Inc.(TSX: V.BEA, Forum) – an emerging Canadian resource company that plans to be at the forefront of meeting the strategic global demand for lithium. The company has recently acquired 2,056 hectares (5,080 acres) of lithium exploration and development rights in the Kibby Basin property in Monte Cristo Valley, Esmeralda County, Nevada. And with this comes a unique investment opportunity in early-stage exploration development along with an undervalued stock price.

It’s important to note that the Company has entered into a property option agreement with Canadian resource business MGX Minerals (CSE: XMG) – a diversified Canadian mining company engaged in the development of large-scale industrial mineral portfolios in western Canada and the US. MGX operates lithium, magnesium, and silicon projects throughout BC and Alberta, as well as petro-lithium exploration in Utah. Under the property option agreement, MGX can acquire a 50% interest in Belmont’s 100%-owned Kibby Basin Nevada lithium property. (Belmont is employing Harris Exploration Drilling and Associates of San Diego California to undertake further exploration drilling at Belmont’s Kibby property).

BEA is engaged in an agreement with MGX Minerals Inc. to carry out assessment and development of the Kibby Basin Property. Under the agreement, MGX has the 1st option to acquire a 25 % interest in Belmont’s 100%-owned Kibby Basin, Nevada lithium property. MGX has until December 31, 2018 to earn a further 25% (total 50%) interest with the goal of forming a 50/50 Joint Venture to utilize MGX’s *rapid lithium extraction technology.

*In April 2017, MGX reported it had received independent confirmation of its rapid lithium extraction process to recover lithium and other valuable minerals from oil and gas wastewater brine. This is big news in the lithium exploration and mining space and is something investors should make note of.

Lithium Mining in the Clayton Valley

According to a report on lithium brine deposits from the United States Geological Survey (USGS), the Clayton Valley spans roughly 100 square kilometres, but has a catchment area of approximately about 14 times that size. That’s because the Clayton Valley sits lower than at least four adjacent basins, all of which are hydrologically linked.

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Satellite capture of Kibby Basin and location of Mina, Nevada. (Click on image to enlarge)

Geologic research of the Kibby Basin has indicated that proximal rhyolitic flows and tuffs surrounding the basin could be a potential source of lithium brine in the Kibby Basin Playa. In addition, the Kibby Basin is located within a geothermal cluster at a basin low setting. Regional geophysical signatures in the area reflect similar anomalies comparative to that of Clayton Valley, approximately 50 kilometres to the south – the location of Albemarle’s Silver Peak Mine – the only current North American lithium producer.

The Kibby Basin shares many characteristics with Clayton Valley where lithium brines are being exploited, including:

• a closed structural basin
• large conductor at depth
• lithium anomalies at surface and depth
• evidence of a geothermal system
• and potential aquifers in porous ash and gravel zones.

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Map showing the comparative locations of Belmont’s Kibby Basin project, Tesla’s Gigafactory and Albemarle’s Silver Peak Lithium Mine. (Click on image to enlarge)

Belmont’s Latest Drilling Results

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On November 1, 2018, BEA reported the latest round of assays from drilling the first hole of 2018 (KB-3) at Kibby Basin. Remarkably, of the 59 samples tested, 6 were above 500 ppm and 41 were above 300 ppm lithium. See detailed results below:

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(Click on image to enlarge)

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Drilling of hole KB-3 at Kibby Basin, Nevada. Multiple brine-prospective layers were encountered as can be seen in above photo.

Presidential Executive Order: Good News for the Lithium Mining Sector

In late December 2017, President Donald Trump signed an executive order directing relevant federal agencies to develop a “federal strategy to ensure secure and reliable supplies of critical minerals”. The Executive Order was designed to reduce the US’s reliance on foreign resources that are used to make products deemed essential to the country's economic and national security. Lithium was named as one such crucial mineral.

Later, on February 16, 2018, the U.S. Department of the Interior released a draft list of 35 minerals deemed critical to the “American well-being”. The move follows December 2017’s presidential executive order. In response, the U.S. Geological Survey (USGS) compiled the new list of critical minerals:

“Aluminum (bauxite), antimony, arsenic, barite, beryllium, bismuth, cesium, chromium, cobalt, fluorspar, gallium, germanium, graphite (natural), hafnium, helium, indium, lithium, magnesium, manganese, niobium, platinum group metals, potash, rare earth elements group, rhenium, rubidium, scandium, strontium, tantalum, tellurium, tin, titanium, tungsten, uranium, vanadium, and zirconium.”

High Demand by the Automotive Industry

Demand, primarily driven by the auto industry, shows no sign of slowing down. Ford and GM announced last year that they’ll be dramatically expanding their EV offerings, with new models planned for production this year and up to 20 different electric vehicles available by 2023. When Tesla’s Gigafactory 1, located in Nevada, reaches full production, the company will produce batteries for 500,000 cars per year in addition to those installed in its home solar battery system – the Powerwall.

With over 4 million electric vehicles (EVs) expected to be on the road globally by the end of 2018, and an increasing number of jurisdictions around the world focusing seriously on the growth of EV sales, we should expect strong growth in lithium-ion battery demand. Costs have come down steadily since the early 1990’s. A recent peer-reviewed analysis found that lithium-ion battery prices have been reduced by about 14% per year since 2007, and the long-term trend is also quite clear. In a standard learning curve effect of 6 to 9 percent, a reduction in price can be expected for every doubling of production volume.

According to Belmont, Nevada enjoys unmatched infrastructure, consistent permitting protocols, a social license to operate, and a safe operational environment. Nevada is also home to Tesla’s US$5 billion lithium-ion battery Gigafactory currently under construction in Sparks, as well as the soon-to-be-built Faraday Future US$1 billion EV plant.

A to G check list for optimal lithium exploration and development:

• (a) an arid climate
• (b) closed basin containing a dry or seasonal salt lake or salt flat
• (c) tectonically-driven subsidence
• (d) associated igneous or geothermal activity
• (e) lithium-bearing source rocks
• (f) one or more adequate permeable aquifers to host brine reservoir
• (g) and, sufficient time to concentrate brine.

Belmont’s Kibby Valley project checks all of the above boxes, and then some.

From the CEO

In conversation with Stockhouse Editorial, company President/CEO/Director, James Place, took time to discuss Belmont’s recent optimistic drill results, along with the past, present, and future of the company:

“About two-and-a-half years ago we got the Nevada lithium cycle and the excitement that came with it in new battery technology, electric vehicles, and the power storage industry. Right now, we’re pushing the project forward and continuing with the exploration phase.”

When asked what sets his company apart from other junior mining companies in this space, he said:

“First off, what we’ve got to our advantage is that we’re the only people in the (Kibby) Valley. And it’s good thing, because we’re not competing for the scarcest resource down there which is water. We’re well on the way to completing our water rights permitting and we’re on the top of the list in the Monte Cristo Basin. We’ve also got a very attractive piece of property with over 5,000 acres and a great deal of evidence from the USGS and our own remote sensing data that we’ve got a fair amount of past and present geothermal activity directly beneath us – we’ve found quite a huge conductive anomaly beneath our claims.”

And finally, a current update on the project:

“Now, we’re drilling holes and finding out where we can start extracting some brines. We discovered a significant amount of lithium in the (surrounding) soils and it’s just a matter of finding out where there may be extractable lithium. And we’re confident we can do that.”

In Closing

After several years of being active in the Kibby Basin, Belmont Resources is now in the final stage of potentially making some sensational discoveries via the drill bit.

The company views itself as an undervalued equity. Shrewd retail investors in lithium exploration and mining know there are now choices in the space. With a well-positioned company like Belmont, what they will find is an established Canadian mining firm with a sound, experienced management team providing an investment opportunity that appears to be a real-world value buy moving forward.

www.belmontresources.com