{"id":119462,"date":"2018-01-12T06:48:10","date_gmt":"2018-01-12T11:48:10","guid":{"rendered":"http:\/\/countingpips.com\/?p=119462"},"modified":"2018-06-01T15:46:45","modified_gmt":"2018-06-01T15:46:45","slug":"exciting-new-lithium-assays-at-cypress-development-corp","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/01\/exciting-new-lithium-assays-at-cypress-development-corp\/","title":{"rendered":"Exciting New #Lithium Assays at Cypress Development Corp"},"content":{"rendered":"
January 12, 2018<\/div>
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By\u00a0Peter Epstein, CFA \u00a0epstein.peter4@gmail.com<\/a>\u00a0 \u00a0<\/b><\/p>\n

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On January 9th,\u00a0Cypress Development Corp.\u00a0(TSX-V:\u00a0CYP) \/ (OTCQB:\u00a0CYDVF)<\/strong> \/ (Frankfurt:\u00a0C1Z1) [market cap =\u00a0C$ 15.5 M<\/em>]\u00a0released\u00a02 additional core holes<\/a>\u00a0from its Fall 2017 Clayton Valley, Nevada, drill program.\u00a0 Results include the best intersection to date, {hole # DCH-13}; 107 meters (350 feet) of\u00a01,134 ppm lithium\u00a0(\u201cLi\u201c) at the\u00a0Dean property<\/strong>. \u00a0Note: \u00a0{I consider the Dean (2,700 acre) and Glory (1,520 acre) claims to be parts of the same overall project}<\/em>.\u00a0 Cypress continues to expand the claystone-hosted\u00a0Li\u00a0mineralized zone.<\/p>\n

\"\"<\/p>\n

In\u00a0DCH-13,\u00a0Li\u00a0values increased at depth, starting at 24.8 meters, the grade averaged 1,206 ppm\u00a0Li\u00a0over 88.4 m. \u00a0\u00a0NOTE: \u00a0{the hole terminated in mineralization and remains open at depth}<\/em><\/p>\n

The 2 holes support the observed continuity of mineralization over a long northeast trend, extending roughly 4 km in length by 2 km in width across the Dean property alone. \u00a04 drill holes have also been completed on the neighboring\u00a0Glory property\u00a0claims, assays are expected by the end of January.\u00a0 The Glory footprint measures about 3 km by 1 km.<\/p>\n

According to the press release, quote,<\/p>\n

\u201cExtraction studies are under way to determine the solubility of the\u00a0Li\u00a0and other mineral constituents within the claystone.\u00a0 Bench-scale scoping tests revealed moderate extractions of\u00a0Li\u00a0in sulphuric acid solution, increasing to 74% recovery with increasing temperatures. \u00a0The\u00a0<\/em>extractions were achieved with relatively low additions of sulphuric acid for lithium-bearing claystone deposits, measured at a rate of 140 to 170 kgs of acid\/tonne.<\/em><\/p>\n

Results are encouraging and clearly indicate that extractions and\u00a0<\/em>acid consumptions of Cypress\u2019s claystone deposits are significantly better than seen in refractory claystone deposits.\u00a0 Further test work is under way to improve results by refining leach conditions, checking for mineralogical variability across properties, and determining methods of\u00a0Li\u00a0recovery from the leach solutions.\u201d<\/em><\/p><\/blockquote>\n

Cypress\u00a0has completed 5 new core holes on its 100% owned\u00a0Dean\u00a0property.\u00a0 Readers may recall that on\u00a0December 5th<\/span><\/span>, management announced\u00a0results from the first 3 holes<\/em><\/a>.\u00a0 Drill results included an intersection of ~337 ft. (102.7 meters \u201cm\u201d) of\u00a01,029 ppm Li\u00a0in hole\u00a0#\u00a0DCH-10.<\/p>\n

\"\"<\/p>\n

In hole\u00a0#\u00a0DCH-10, dark\u00a0greenish\u2013blackish<\/em>\u00a0mudstones were found at a depth of ~ 175 ft. (53.4 m) that averaged\u00a01,367 ppm Li\u00a0over ~33 ft. (10 m), including ~3 ft. of\u00a02,240 ppm Li.\u00a0 This is the first time Cypress has encountered these higher-grade dark mudstones.<\/p>

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DCH-11\u00a0included an interval of consistently higher grades starting at a depth of just 27 ft. (8.2 m).\u00a0 Samples averaged\u00a01,308 ppm Li\u00a0over 121 ft. (36.9 m), suggesting that a\u00a0higher-grade zone may exist<\/em>\u00a0within the overall northeast trend.\u00a0 According to management, holes to date, \u201cclearly show a large, tabular, lithium-bearing formation underlying the Dean property.<\/em>\u201c<\/p>\n

All 9\u00a0previous holes<\/em>\u00a0at\u00a0Dean\u00a0encountered significant\u00a0Li\u00a0values within claystone,\u00a0which ranged\u00a0up to 1,790 ppm Li<\/em>\u00a0and averaged about\u00a0950\u00a0ppm Li.\u00a0 Mineralization outcrops at surface, and the average thickness was ~220 ft. (67.0 m).\u00a0 Li-bearing claystone is considered open in all directions.<\/p>\n

\"\"<\/p>\n

With the addition of the 5 new assays, the combined 14 holes at Dean have an average mineralized thickness of 238 ft. (72.5 m), and an average grade\u00a0of ~937 ppm Li.\u00a0 The Dean property hosts\u00a0Li\u00a0values in an area about 4,000 m (13,120 ft.) long by about 2,000 m (6,560 ft.) wide.\u00a0 That\u2019s about 800 sq. hectares (1,975 sq. acres).<\/p>\n

Cypress\u00a0controls 100% of the contiguous\u00a0Dean\u00a0and\u00a0Glory\u00a0claim blocks, covering an area totaling 4,220\u00a0acres in Clayton Valley, Nevada, immediately east of\u00a0Albemarle Corp.\u2019s\u00a0(NYSE:\u00a0ALB)\u00a0Silver Peak\u00a0Li\u00a0brine operations<\/em>. \u00a0Pure Energy Minerals\u2019\u00a0(TSX-V:\u00a0PE)\u00a0project\u00a0(PEA-stage,\u00a0C$330 M after-tax NPV(8%)<\/em>\u00a0is on the Company\u2019s southwest boundary.<\/p>\n

Cypress\u2019 2 properties host\u00a0Li\u00a0mineralization that is neither brine nor hardrock. \u00a0Li\u00a0is hosted in a soft claystone, like the\u00a0Li\u00a0endowments at\u00a0Global Geoscience\u00a0(ASX:\u00a0GSC) [project at Pre-Feasibility Stage in Nevada, market cap = ~C$485 M<\/em>]\u00a0and\u00a0Bacanora Minerals\u00a0(TSX-V:\u00a0BCN) [main\u00a0project in Sonora Mexico at Feasibility Stage, pro forma market cap = ~C$400 M<\/em>].<\/em>\u00a0\u00a0Lithium Americas\u00a0(TSX:\u00a0LAC)\u00a0also has a prominent\u00a0claystone-hosted<\/em>\u00a0Li\u00a0resource in Nevada,\u00a0(at Pre-Feas Stage)<\/em>\u00a0but LAC\u2019s flagship project is in Argentina.<\/p>\n

The chart below shows a rough relative valuation of various clay, brine and hardrock lithium juniors at various stages of development.\u00a0 Cypress is thought to be just 2-3 months from a maiden resource.\u00a0 For my estimate of LCE tonnes I used the formula;\u00a0length x width x thickness x rock density = 4,000 m x 2,000 m x 72 m (thick) x 2.5 (meters cubed \u2013 density).\u00a0 Then I haircut that figure by 25% to be conservative, and applied a further 50% discount to account for the tightness of drill spacing.\u00a0 More infill drilling will be necessary post maiden resource estimate to the reach the full tonnage potential of the Dean & Glory claims.<\/p>\n

Cypress is trading at a\u00a090% discount\u00a0to the other companies in the chart.\u00a0 Even accounting for the much more advanced stage of peers, Cypress appears to have a low relative valuation.\u00a0 Consider that if Cypress\u2019 share count and share price were both to double, the mcap \/ tonnes LCE ratio would increase to $32\/tonne LCE, but that would still be a\u00a062% discount\u00a0to the peer average of $82\/t LCE.\u00a0 Having said that, Cypress is not doubling its share count anytime soon!\u00a0 In fact, the Company is fully-funded through a maiden resource, and management believes that a PEA could be delivered\u00a0(it depends on drilling & metallurgy)<\/em>\u00a0by year-end\u2013 with minimal new share issuance.<\/p>\n

\"\"<\/p>\n

Interview of CEO Bill Willoughby, PhD, PE<\/h2>\n

I recently conducted an interview\u00a0(by phone and email<\/em>)\u00a0with\u00a0Bill Willoughby, PhD, PE, CEO & a Director\u00a0at\u00a0Cypress. Bill is ideally suited for the job at hand.\u00a0 Cypress is sitting on unconventional\u00a0Li\u00a0deposits that will require ingenuity and innovation to extract and process.\u00a0 Bill has 38 years\u2019 experience as a mining engineer in all aspects of natural resources exploration & development.<\/p>\n

Bill received a\u00a0Doctorate in Mining Engineering & Metallurgy\u00a0from the University of Idaho in 1989.\u00a0 Therefore, he\u2019s as well placed as anyone to assess new methods of processing unconventional lithium deposits.\u00a0 Having said that, reinventing the wheel may not be necessary if extraction and processing can be done at relatively low temperatures, and with relatively low use of acid, but there\u2019s a lot of testing ahead. Bill and his team are also evaluating a number of promising third-party technologies.<\/p>\n

\"\"<\/p>\n

Here is my interview with Dr. Bill Willoughby, PhD, PE.<\/p>\n

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How are Cypress\u2019\u200b deposits similar to, or different from, the\u00a03\u200b\u00a0major\u00a0North American \u200bclaystone<\/span>\u00a0resources\u200b; Global\u00a0Geoscience\u2019s<\/span>\u00a0Rhyolite\u00a0<\/span>Ridge<\/i>\u00a0in Nevada, Lithium Americas\u2019\u00a0Lithium Nevada<\/i>\u00a0project & \u200bBacanora\u2019s\u00a0Sonora\u00a0<\/i>project in Mexico?\u00a0<\/i><\/h3>\n

You used the word \u2018claystone<\/em>\u2018, and that\u2019s the obvious link between us and the three others.\u00a0 All four are lithium-bearing deposits of volcanic origin, located in Nevada and northern Mexico.\u00a0 Rhyolite Ridge and Cypress are geographically close, and the only ones near a producing lithium brine operation, which is\u00a0Albamarle\u00a0Corp.\u2018s\u00a0Silver Peak.<\/p>\n

When you look at the grades in the other three deposits, the lithium values are higher, but the mineralogy appears different, such that we hope Clayton Valley is easier to get the lithium into solution.<\/p>\n

In what ways will the work being done by these much larger unconventional lithium developers help Cypress over the next few years?<\/h3>\n

By unconventional, you mean claystone as opposed to brines or hardrock pegmatites.\u00a0 Any research or processing developments into lithium extraction from clays could be applicable, but possibly proprietary.<\/p>\n

Our immediate focus right now is to see how well we can get the lithium into solution, and what reagents and conditions that takes.\u00a0 Once there, we will be able to evaluate how to get to a product, for which there are a number of companies right now working on solutions.<\/p>\n

Based on the dimensions of known lithium mineralization, about 4,000 x 2,000 meters on the Dean project alone, with an average mineralized thickness of ~ 72 meters and average drill hole grade of ~ 940 ppm\u00a0Li\u00a0\u2014 is it possible to make a rough estimate of the potential scale of the Dean deposit?<\/h3>\n

Yes, that\u2019s possible, and it\u2019s certainly something we think about.\u00a0 However, until we have an independent QP tell us we have adequate drilling and enough information for a NI 43-101 compliant technical report, such an approximation is speculative and I have to advise against it.\u00a0 We are working towards that stage through drilling and laboratory tests and we hope to have a maiden resource by the end of the first quarter.<\/p>\n

\"\"<\/p>\n

Some believe it will be nearly impossible to obtain water rights in Clayton Valley.\u00a0 Where does Cypress stand with regard to water?<\/h3>\n

The concerns over water rights have centered around the existing lithium producer in Nevada protecting its brine resources from new operations. \u00a0Mining and processing claystone will not present the same impacts<\/em>\u00a0as would a new field of brine wells, and we are optimistic that the differences will become apparent assuming we are successful moving forward.<\/p>\n

A major hurdle for your deposits is finding a way to process them in an environmentally friendly & cost effective manner.\u00a0 How is Cypress attacking this challenge?<\/h3>\n

We are working methodically, collecting samples and running those samples through scoping bench scale tests to determine under what conditions we get the lithium to leach, and what other elements leach along with it.<\/p>\n

Once we have enough representative material from drilling to say we\u2019ve addressed possible variability in mineralogy throughout the deposit, we can move on to a metallurgical program that addresses specific leaching and recovery methods.<\/p>\n

Lithium prices in China are above US$ 20,000\/tonne.\u00a0 Are there proven processing technologies available that are expensive, but might make sense if Li prices remain strong?<\/h3>\n

Possibly, yes \u2014 calcining or leaching with a strong acid, could be considered \u201cproven,\u201d but we don\u2019t have enough information yet to say whether such steps are needed.\u00a0 We have to see where the drilling and test work takes us.<\/p>\n

The Dean & Glory deposits are pre-maiden resource.\u00a0 At what exploration or development stage might a strategic or financial player invest in Cypress?<\/p>\n

We have enough cash right now to do the work in front of us, and then some, so we don\u2019t have any pressure to bring in a partner.\u00a0 This is a good place to be in for a junior. \u00a0Obviously, if a good partner or offer comes along, we will consider it, but right now, that\u2019s not at all our focus.<\/p>\n

Thank you Bill for your time, I look forward to drill results at the Glory property and updates on ongoing metallurgy\u00a0work. \u00a0<\/strong><\/p>\n

Disclosures: \u00a0The content of this article \/ interview is for illustrative and informational purposes only.\u00a0 Readers fully understand and agree that\u00a0nothing\u00a0contained herein,\u00a0written\u00a0by Peter Epstein of\u00a0<\/em>Epstein Research<\/a>,\u00a0<\/em>[ER]\u00a0<\/em>including but not limited to, commentary, opinions, views, assumptions, reported facts, estimates, calculations, etc. is to be considered implicit or explicit, investment advice. Further,\u00a0nothing\u00a0contained herein is a recommendation\u00a0or solicitation to buy or sell any security.\u00a0 Mr. Epstein and\u00a0<\/em>[ER]\u00a0are not\u00a0responsible for investment actions taken by the reader.\u00a0 Mr. Epstein and\u00a0<\/em>[ER]\u00a0have never been, and are not currently, a registered or licensed financial advisor or broker\/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and they\u00a0do not\u00a0perform market making activities. Mr. Epstein and\u00a0<\/em>[ER]\u00a0are not\u00a0directly\u00a0employed by any company, group, organization, party or person. Shares of\u00a0<\/i>Cypress Development Corp.\u00a0are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks\u00a0can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they consult with their own licensed or registered financial advisors before making investment decisions.<\/em><\/p>\n

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At the time this article was posted, Peter Epstein owned shares in Cypress Development Corp.<\/em>\u00a0<\/em>and the Company was an advertiser on<\/em>\u00a0[ER]. \u00a0By virtue of ownership of the Company\u2019s shares and it being an advertiser on [ER], Peter Epstein is biased in his views on the Company.<\/em>Readers understand and agree that they must conduct their own research, above and beyond reading this article. While the author believes he\u2019s diligent in screening out companies that are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful.\u00a0Mr. Epstein &\u00a0<\/em>[ER]\u00a0are not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article. Mr. Epstein &\u00a0<\/em>[ER]\u00a0are\u00a0not expected or required to subsequently follow or cover events & news, or write about any particular company or topic.\u00a0Mr. Epstein and\u00a0<\/em>[ER]\u00a0are not experts in any company, industry sector or investment topic.<\/em><\/p>\n<\/div>\n

 <\/p>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By\u00a0Peter Epstein, CFA \u00a0epstein.peter4@gmail.com\u00a0 \u00a0 On January 9th,\u00a0Cypress Development Corp.\u00a0(TSX-V:\u00a0CYP) \/ (OTCQB:\u00a0CYDVF) \/ (Frankfurt:\u00a0C1Z1) [market cap =\u00a0C$ 15.5 M]\u00a0released\u00a02 additional core holes\u00a0from its Fall 2017 Clayton Valley, Nevada, drill program.\u00a0 Results include the best intersection to date, {hole # DCH-13}; 107 meters (350 feet) of\u00a01,134 ppm lithium\u00a0(\u201cLi\u201c) at the\u00a0Dean property. \u00a0Note: \u00a0{I consider the Dean […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-119462","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/119462","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=119462"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/119462\/revisions"}],"predecessor-version":[{"id":119463,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/119462\/revisions\/119463"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=119462"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=119462"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=119462"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}