Everything counts in large amounts. Which is why lithium explorer QMC Quantum Minerals Corp. (TSX: V.QMC, OTC: QMCQF) may have a tiger by the tail.
Two recent announcements from QMC add weight to the growing perception that the Vancouver-based company may soon be able to re-commission the potentially large, but also untapped, Irgon Lithium Mine Project, near Cat Lake, Manitoba.
Pictured above: A roadside marker scaled replica of the historic head frame for the Irgon Mine
QMC initially released assay results from its 2017 regional sampling program in February with highlights including three grab samples with concentrations of over 1.90% lithium oxide (Li2O), including one that assayed as high as 2.62% Li2O.
Indeed, the survey results have gone a long way towards validating investors’ confidence in QMC’s exploration model.
Exploring a “Huge” New Lithium Anomaly
Now here’s where things get really interesting: On March 1st, 2018, the company announced a press release with the title, “QMC Identifies Huge Lithium Anomaly.”
That’s no understatement. In essence, it means the company has the potential to add considerable more tonnage to its existing lithium asset. In fact, this large anomaly strikes east-west for over a kilometre, and has been shown to be as wide as 350 meters in places.
A former project operator, Tantalum Mining Corporation of Canada (“TANCO”) had previously identified this large lithium anomaly over the area south of Cat Lake as far back as 1978, but fortunately TANCO was looking for tantalum deposits, rather than lithium.
But while no lithium assays were requested, spodumene, a pyroxene mineral consisting of lithium aluminum inosilicate and considered a source of lithium, was noted in the drill logs. According to the TANCO assessment, the “breath and length of this feature is such that it cannot be accounted for by the known pegmatite’s in the area.”
However, TANCO had no interest in producing lithium and the project was dropped.
Fast forward a few decades to a new lithium-hungry era. That’s when QMC jumped onto the opportunity in 2016 to flesh out this deposit’s true potential. Hence, QMC plans to drill test the entire area covered by the TANCO assessment this spring/summer.
All told, QMC’s management believes that a cluster of additional untested, potentially lithium-bearing pegmatite dykes (slab-like rock structures) may yet be unearthed in this area. Hence, the company has expanded its land package to 6,538 acres (2,647 hectares).
These additional dykes, which generally strike parallel (in an east-west direction) to the Irgon Mine dyke, may yet prove to be well-mineralized deposits in their own right. Or they could turn out to be lateral extensions of the Irgon dyke.
Either way, they are likely to substantially beef-up the company’s proven lithium assets, once drilling assays have been completed later this summer.
Capitalizing on the Untapped Potential of a Former Mine
This project has a compelling history that attests to the prospective presence of a significant lithium resources.
To this point, the Lithium Corporation of Canada drilled over two dozen holes into the Irgon Dike in the early 1950s and reported a historical resource estimate (unfortunately not NI 43-101 compliant) of 1.2 million tons grading 1.51% Li2O over a strike length of 365 meters and to a depth of 213 meters.
This historic resource is now outdated. However, an upcoming drill program is expected to outline a new resource estimate that is in compliance with current reporting standards.
Work crews are stripping away overburden that covers the Irgon Dyke in preparation for drilling of this lithium-bearing structure in Q2 of this year. Not only will this drill program test the deposit’s potential to depth, but it will also target the strike extensions of Irgon’s known surface parameters.
Additionally, a recent channel sampling program across the width of the dyke has revealed the presence of plenty on-surface, high-grade lithium (spodumene) mineralization.
The appeal of the Irgon Lithium Mine Project is sweetened by the fact that the lithium mineralization commences directly on surface. This means some of it should be amenable to relatively low-cost, open-pit (quarry-like) ore extraction methods – especially if the deposit grows to depth and along its northeast trending strike length.
Unfortunately for the previous operators, the commissioning of the mine was put on hold in 1957 due to the unexpected onset of a decades-long slump in lithium demand and the mine’s mineral inventory remains completely untouched.
Now that lithium demand is surging and lithium prices are escalating due to the advent of “green” batteries, this mine appears to have a new lease on life.
The odds in favour of revitalizing this mine are also supported by the presence of a provincial highway that was originally built for access to the Irgon Mine in 1956 and runs right through QMC’s property. In other words, this represents a major cost saving in terms of getting the mine’s anticipated future output to the US and world markets.
Moreover, most of the other necessary regional infrastructure for a mine to operate – such as water and an electricity grid – is already in-place nearby due to the long-standing existence of the TANCO lithium/tantalum/cesium mine located only 20 kilometres to the south.
Investment Summary
QMC benefits from an existing, under-developed lithium mine that represents a possible turnkey mining operation due to the proximity of all the necessary mining infrastructure. Then there’s all the “blue sky” potential by way of a large lithium anomaly and numerous other lithium dike targets on the property.
Now that exploration and development work is getting underway in earnest, the company should have plenty of news flow in the coming months to support its buoyant share price.
So what is the ultimate big picture potential?
The prospect of a lucrative, revitalized lithium mine coming on-stream may well be in the offing – and on an expedited timeline.
With such a company-maker opportunity quickly emerging, QMC’s share price is likely to continue to benefit from a steady flow of upbeat news in 2018.
After all, the ongoing revitalization of the former Irgon Mine goes to prove that timing is everything in the mining business.
About the Author: Marc Davis has a deep background in the capital markets spanning 30 years. He is also a longstanding financial journalist, having worked for leading digital financial news agencies in North America and in London’s financial centre. He is also a former business reporter for CBC Television.
Over the years, his articles have also appeared in dozens of digital publications worldwide. They include USA Today, CBS Money Watch, Investors’ Business Daily, the Financial Post, Reuters, National Post, Google News, Barron’s, China Daily, Huffington Post and AOL.
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