An update to Allkem‘s (TSX: AKE; ASX: AKE) James Bay lithium project in northern Quebec has increased the resource by 173% over its previous estimate from December 2021, the company said in a Friday news release.
The new resource is estimated at 110.2 million tonnes averaging 1.30% Li2O (lithium oxide), including 54.3 million tonnes at 1.30% Li2O in the indicated category and 55.9 million tonnes at 1.29% Li2O in the inferred category. The total resource represents a 173% increase over its previous estimate for the project, located 130 km east of James Bay and the Cree Nation of Eastmain.
The Argentina-headquartered company says the increase solidifies the deposit as a tier-1 lithium pegmatite mineral resource and long-life asset.
The updated resource incorporates two drilling campaigns conducted on the project since early 2022, adding about 37,500 metres of delineation drilling to the deposit since the release of the previous feasibility study.
Now included in the James Bay resource is an initial resource estimate (inferred) for the NW Sector, which is open along strike and at depth with growth potential. The NW Sector resource, according to Allkem, has higher grades than the remainder of the deposit and represents a potential opportunity to improve the grade profile of the future operation.
The entire deposit also remains open both along-strike and at depth, and the lithium company says it has implemented a strategy to continue growing the resource with more drilling.
“James Bay is now one of the largest spodumene lithium assets and clearly has the potential to grow even further as the boundaries of mineralization are tested through an additional drilling program commencing later in the year,” Allkem’s managing director and CEO Martin Perez de Solay said.
“The size and grade of this resource is amongst the best in the world and will underpin Allkem plans for future production and processing of lithium in Quebec,” he added.
Allkem is proposing to develop the James Bay project as a sustainable, hard-rock operation that maximizes the use of renewable energy, utilizing spodumene expertise gained from its Mt Cattlin operation in Australia.
A December 2021 feasibility study for the project outlined an average annual production of 321,000 tonnes per annum of 5.6% Li2O spodumene concentrate with an approximate 19-year mine life.
The update comes three months after Allkem and Livent (NYSE: LTHM) merged to form the world’s third-largest miner of the critical mineral by annual production capacity.
The all-share merger created a company with a valuation of US$10.6 billion and a forecasted production capacity of 248,000 tonnes of lithium carbonate equivalent (LCE) a year, representing about 7% of global mine production in 2023, said battery raw materials analyst at Fastmarkets NewGen, Jordan Roberts.
The deal places the new company among the top five lithium producers in terms of market capitalization, behind Albemarle (NYSE: ALB), Chile’s SQM (NYSE: SQM), Ganfeng Lithium and Tianqi Lithium.
Allkem shares were down 1.2% to $12.60 in Toronto on Aug. 11, giving it a market capitalization of $8 billion. Its shares traded in a 52-week window of $9.08 and $15.19.
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