Li-FT Power is a Canadian exploration company focused on developing lithium projects within Canada to support the growing demand for electric vehicle batteries and renewable energy storage solutions.
Francis, tell us a bit about yourself and what brought you to Li-FT Power.
After working in Africa, I came back to Canada in 2016 to co-found Kenorland Minerals. As a project generator, we acquired mineral claims for relatively low costs and then partnered with big companies like Newmont or Freeport, who invested in the exploration. We retained a minority interest or royalty, minimizing our risk. Over six years, we made a significant greenfields gold discovery in Quebec with Sumitomo as a partner.
We also secured numerous deals with companies such as Barrick, Newmont, Freeport, and Sumitomo, bringing in about $100 million for exploration. This work continued until 2019 when the battery metals space began to rise. We focused on Canada, primarily for copper and gold, but soon shifted towards nickel and lithium, leading to the creation of Li-FT Power. We staked about 2,000 square kilometers around the Whabouchi deposit, which was the largest hard rock lithium resource in Canada at the time, and spun it into a new company, thus starting Li-FT.
In last year’s interview, you told us that you still had to gain confidence about the underground deposits at Yellowknife. Have you managed to do so by now?
Yes, typically, one year is not much in mining, but with lithium pegmatites, you do not need extensive drilling. We have drilled 50,000 meters this year and will release an initial resource estimate in September. We have a good idea of the resource, which remains open in several directions, indicating potential growth. We will present our findings from the 50,000 meters drilled and continue expanding the resource once the capital markets for lithium improve.
How easy is it for a junior lithium company to attract investment today?
The ease of attracting investment depends on the project's stage. For Yellowknife, we have sufficient funds for a resource estimate and metallurgy, both due in September. The next step is a preliminary economic assessment, requiring a model for a mine, which will need about 20 to 25 million Canadian dollars for infill drilling. Although infill drilling is not thrilling to investors, it is crucial for project advancement.
At the exploration stage, raising smaller amounts, like $5 million, is always possible. However, the sentiment in the capital markets for lithium is currently low, partly due to concerns about EV sales in the States. Investors are cautious, impacting our ability to secure large sums needed for advancing projects.
Do you think the current downturn in EV demand is temporary?
I firmly believe we are on a trajectory towards complete EV adoption, although it will not be a straight line, with peaks and valleys along the way. In China, EV sales are consistently rising month-on-month and year-on-year. The market is merely catching its breath. The energy transition is a long-term, 50 to 100-year mega trend, and we are just at the beginning.
Does the immature market for lithium explain its volatile price?
Yes, the volatility reflects an immature market. The lithium price surge occurred when battery producers did not know their lithium supply sources. Faced with demands from automakers like Ford and BMW, they bought every available lithium unit, driving prices from $10,000 to $80,000 per ton. This price hike attracted many to the market, increasing supply and subsequently lowering prices. However, with projections indicating a need for three million tons by 2030, supply must double again in six years, perpetuating market volatility until it matures.
Do you envisage further expansion of Li-FT Power in the short-term?
Currently, Li-FT is focused on Yellowknife, where we need to prove our resources. In Quebec, we have the largest land position in the James Bay region and are conducting greenfields exploration for new deposits.
We also have another project ready for initial drilling. We are fully occupied with these endeavors and would only consider acquiring new projects under exceptional circumstances. At Yellowknife, we aim to enter production in about six years, aligning with expected peak lithium demand.
How is your relationship with local authorities in Canada?
We receive substantial support from the Northwest Territories' government. Mining has historically contributed 30% to the region's GDP, primarily from three operating diamond mines. With these mines closing by the decade's end, the territorial government recognizes the need for new economic drivers, like lithium mining, and has been very supportive to help alleviate potential economic turbulence from the diamond mines' closure.
Can you summarize your key priorities for the next years until you enter production at Yellowknife?
In the next year, our focus is on the resource estimate, which will reveal our lithium reserves, and the metallurgy, crucial for technical de-risking by showing recovery rates during processing. Subsequently, we will release an economic study. Looking five years ahead, permitting is the main priority, as it takes about five years, including two years of baseline environmental data and two years for the environmental assessment and permitting process. This phase is critical for moving towards full production.
