Overview of Cypress' Exploration Projects in Nevada, U.S.A.
Cypress' flagship Clayton Valley Lithium Project is located immediately east of Albemarle’s Silver Peak mine, North America’s only lithium brine operation, which has been in continuous operation since 1966. Recent exploration by Cypress has discovered an extensive deposit of lithium-bearing claystone adjacent to the brine field to the east and south of Angel Island, an outcrop of Paleozoic carbonates protruding up through the lakebed sediments.
Cypress controls two claim blocks, Dean and Glory, totalling 4,220 acres. Lithium mineralization occurs within montmorillonite clays throughout the sediments to a depth of at least 120 meters.
Metallurgical tests have shown the claystone is weak acid leachable with lithium extractions over 80% in 2 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.
Cypress believes these features, along with a favorable geographical setting and the size of the deposit makes Clayton Valley a premier target that has the potential to impact the future of lithium production in North America. With lithium mineralization tested by drilling over a seven-kilometer trend, Cypress’ Clayton Valley Project could develop into a significant long-term source of supply in a politically stable and favorable mining jurisdiction.
In September 2018, Cypress announced positive results from a Preliminary Economic Assessment (PEA) of the Company’s Clayton Valley Lithium Project. The PEA was prepared by Global Resource Engineering (GRE) of Denver, Colorado, an independent engineering services firm with extensive experience in mining and mineral processing.
GRE reported a total Indicated Mineral Resource of 3.835 million tonnes of lithium carbonate equivalent (LCE) contained in 831 million tonnes at an average grade of 867 ppm Li and an Inferred Mineral Resource of 5.126 million tonnes of LCE contained in 1.12 billion tonnes at an average grade of 860 ppm Li. Cypress' lithium deposit remains open at depth, with 21 of 23 drill holes ending in lithium mineralization.
GRE used a conventional approach in processing and developed a production schedule that utilized only a small fraction of the total resources on the property. The result is a project that has strong economics and the potential to generate significant cash flow.
- Net present value of $1.45 billion at 8% discount rate and 32.7% internal rate of return on after-tax cash flow.
- Lithium carbonate price of $13,000 per tonne based on Benchmark Research market study.
- Average annual production rate of 24,042 tonnes of lithium carbonate over 40-year life.
- Capital cost estimate of $482 million, pre-production and operating cost estimate averaging $3,983 per tonne of lithium carbonate.
- Payback period 2.7 years.
Global Resource Engineering of Denver, Colorado, prepared the National Instrument 43-101 Technical Report which carries an Effective Date of September 5, 2018. Terre A. Lane, J. Todd Harvey, Hamid Samari, and J. J. Brown of GRE, and Todd Fayram of Continental Metallurgical Services are the Qualified Persons for the report.
The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Cypress holds a 100% interest in the approximately 1,100 acre Gunman Zinc / Silver Project located in White Pine County, northeast of Eureka, Nevada. Five RC drill programs totaling over 15,000 meters have been completed by Cypress on the Gunman Project with significant near surface grades up to 33% zinc and up to 425 g/t silver over considerable widths encountered at the main RH Zone. Additional drilling will include the RH South Target, located approx. 150 meters south of the main RH Zone, where mineralized outcrops assayed up to 41% zinc and 340 g/t silver.
In December 2017, Cypress entered into an agreement Pasinex Resources Limited whereas Pasinex can earn up to an 80% interest in Cypress' Gunman Project. Total consideration to acquire the 80% interest is staged over four years and includes US$675,000 in cash payments and 4.8 million Pasinex common shares. In addition, Pasinex must incur minimum exploration expenditures totaling US$2,950,000 over the same four-year period.
William Willoughby, PhD, PE, Chief Executive Officer & Director of Cypress Development Corp. is a Qualified Person as defined by National Instrument 43-101 and has approved the technical information on this website.