Pele Mountain sells uranium project to focus on lithium
A plan by Pele Mountain Resources (TSXV:GEM) to mine uranium in northern Ontario while at the same time processing rare earths has fizzled.
The Toronto-based junior said earlier this month that it sold its flagship Eco Ridge uranium property at Elliott Lake, Ontario, to privately-held Enirgi Group. The six-division conglomerate is developing a lithium brine project at the Salar del Rincon in the province of Salta, Argentina.
“Enirgi is commissioning its commercial-scale DXP demonstration plant in Salta, Argentina and is successfully producing lithium carbonate on a daily basis: Rob Scargill, Pele's interim president and CEO
In an announcement, Pele said Eco Ridge "remains uneconomic and offers limited short or mid-term benefit to shareholders" due to continuing weak uranium and rare earths prices. The project was sold to an arms-length purchaser for $380,000 in cash.
Moreover, the company said it hasn't been able to generate the necessary support for its monazite processing facility in Elliot Lake. The monazite processing strategy would have involved "[collaborating] with monazite suppliers, technical experts in processing, and rare earth end users to produce separated, high-purity, individual rare earth oxides that have much greater value than mixed rare earth concentrates, and can be used in downstream value added processing and manufacturing," according to a project page. Eco Ridge, a past-producing uranium mine, produced over 300 million pounds of uranium oxide and is the only mining camp in Canada to have achieved commercial production of rare earth oxides, according to Pele Mountain.
Under terms of a letter of intent, Enirgi will own 85% of Pele, in exchange for which Enirgi will provide:
- management services to Pele
- exclusive rights to develop and market Enirgi’s DXP technology in North America
- access to its direct extraction technology and marketing services
“Enirgi is commissioning its commercial-scale DXP demonstration plant in Salta, Argentina and is successfully producing lithium carbonate on a daily basis. We see excellent potential for Pele to apply this technology in North America and are already investigating opportunities with existing brine resource holders to partner on unlocking lithium production adjacent to Tesla’s Gigafactory,” said Rob Scargill, a mining engineer at Enirgi Group who has been appointed as Pele's interim president and CEO. Pele’s chairman, Wayne Richardson, is the president and CEO of Enirgi Group. Meanwhile Pele's current president and CEO, Al Shefsky, has resigned his positions, but will stay on another year during the transition.
Enirgi started building the plant in December 2016 and has ambitions for a 50,000 tonnes per year facility, using proprietary lithium extraction technology, to produce battery-grade lithium carbonate from unconcentrated brine. The company has a definitive feasibility study that outlines 1.2 million tonnes of lithium carbonate equivalent.