Is Yellowknife heading into a lithium rush?

For decades, nobody did much with the lithium-rich region east of Yellowknife. Suddenly, multiple companies are taking up the quest to find lithium and sending scouts to drill.

Drilling small holes across a property allows companies to get a sense of how large the deposit is beneath, and analyze samples for their lithium content.

For around half a dozen companies, that’s top of the to-do list.

At least seven companies have NWT lithium projects in their early stages, most of them near Yellowknife. They hope to strike while the lithium iron is hot as demand skyrockets for the element’s use in the likes of electric vehicles.

One company, Li-FT, says it holds leases covering the majority of what is known as the Yellowknife Pegmatite Province, an area of 9,600 square kilometres that North of 60 Mining News says is “riddled” with the lithium sources known as pegmatites. Pegmatites are a type of very coarse igneous rock, and are a host material for lithium. 

But Li-FT is far from alone.

Bill Cronk is the chief geologist at RGV Lithium, another company with an interest in the same area. RGV Lithium has optioned its property, south of Hidden Lake, to Gama Explorations, meaning Gama has the option to purchase the property if certain conditions are met. Gama says it will begin drilling at the property, much of which surrounds Plant Lake, later this summer.

Cronk, who has worked with lithium since the 1990s, says its newfound demand is part of the response to climate change. 

As the electric car industry grows, Cronk says, so will demand for the lithium batteries that power those vehicles and other items like laptops.

“Historically, a lot of lithium comes from other countries,” Cronk told Cabin Radio.

“North Americans are trying to find, define and exploit our own lithium resources in North America.”

Need for raw materials

Evidence of that can be found in the manufacturing heart of Canada.

In April, the federal and Ontario governments teamed up to secure Volkswagen’s first overseas electric vehicle (EV) battery manufacturing plant. Between them, the two governments promised up to $13 billion in subsidies to attract the company.

Now, the province is forking over more money to save a planned EV battery factory in Windsor.

Those plants will need raw materials, and companies exploring near Yellowknife are also energized by broader forecasts of giant leaps in demand over the coming decade. The International Energy Agency, a Paris-based energy policy group, has even suggested lithium demand could be 40 times higher by 2040.

Speaking to Cabin Radio from a lithium conference staged by the National Bank of Canada in New York City, Li-FT chief executive Francis MacDonald said Yellowknife was once thought to be home to one of the western world’s largest lithium resources, but was forgotten because the private company owning the leases did not market them.

“In all my discussions with car manufacturers, battery producers, lithium producers, the feeling I get is that nobody really knows where this lithium is going to come from in order to keep up with the demand,” MacDonald told Cabin Radio. His company is operating in the territory under the name of Erex International, a wholly owned subsidiary.

MacDonald said Li-FT will begin drilling at sites near the Ingraham Trail, northeast of Yellowknife, on Friday this week. The company hopes early drilling results will help it to understand the potential of those lithium deposits – and how Li-FT’s possible NWT lithium reserves fit into the broader picture.

Right now, Canada is no lithium superpower.

The country is currently estimated to hold 2.5 percent of the world’s lithium reserves, far less than top producers like Australia, Argentina, China and Chile. 

Regardless, the Canadian government has invested $4 billion in a national critical minerals strategy designed to promote activities such as mining for and manufacturing with lithium. Ottawa has also launched a $1.5-billion critical minerals infrastructure fund, alongside a tax credit for companies mining the likes of lithium. 

According to the Northern Miner, there are 409 lithium projects in various stages of development across the country.

Quebec is home to 199 of them. Ontario is in second place with 107. The Northwest Territories has 10, all in their earliest stages.

The newest prospector in town is Toronto-based Ion Energy, which announced in early May that it had acquired the Bliss Lake project. Again, Bliss Lake is in the Hidden Lake region near Yellowknife, just off the northern end of nearby Sparrow Lake.

Ion Energy’s previous work has taken place in Mongolia, where lithium deposits come in the form of brines. Bliss Lake marks its first Canadian project.

Ion’s chief executive, Ali Haji, told Cabin Radio Canada’s government funding is a big draw for this kind of project.

“In Canada, there’s the potential for us to really turn the needle,” he said ahead of an anticipated site visit this summer, where he intends to hold meetings with the community and governments.

“That will dictate when we can start to turn a drill,” he said. 

“We’ve got a fair bit of work to do … the priority for us is ensuring that the local community understands the implications of what we’re trying to do.”

At the same time, North Arrow Minerals chief executive Ken Armstrong plans to visit Yellowknife this month for a similar round of community engagement.

His company plans to start drilling in the fall near the former DeStaffany mine, 115 kilometres east of Yellowknife on the East Arm of Great Slave Lake, if permits come through.

‘It could be dead’

But not every northern mining company is similarly enthused by lithium.

Gold Terra, which spends most of its time trying to start a new gold mine near Yellowknife, has optioned two of its properties north and northeast of Yellowknife to an Australian mineral exploration company, Midas Minerals, rather than explore for lithium itself.

Gold Terra chief executive Gerald Panneton says his company isn’t wading into the lithium arena. His main concern is the longevity of the current rush. 

“Lithium could also be dead in three years from now,” he told Cabin Radio, giving the example of what might happen if a new form of battery is popularized that doesn’t use lithium.

Midas Minerals, on the other hand, is already in the field taking small samples, said managing director Mark Calderwood. 

On his return from a visit to the site, Calderwood said Midas’ exploration is at an early stage – the company is still narrowing down an area to focus on – but he expects to be drilling within a year.

Yellowknifers won’t see much of the actual prospecting in and around town, and some of the companies involved also sought to reassure canoeists, campers and hikers who ordinarily use summer to make the most of the Hidden Lake Territorial Park. (No drilling can take place in the park, but not all of Hidden Lake is within the park, and surrounding lakes are mostly fair game.)

Cronk, of RGV Lithium, said all of Gama’s drilling near Hidden Lake will be located away from hiking trails and private land. Li-FT’s MacDonald said that unless you’re out in the northeastern corner of Hidden Lake, you likely won’t see much of Li-FT’s drilling, either. There may be more helicopters flying around, he said, and Li-FT workers will be in camps near the project. 

Cronk says lithium exploration this summer is a good thing for Yellowknife. Everything has to go through the city, he argues, so interest in lithium may create a bit of a boom for restaurants, the airport, hotels, and gas stations. And the exploration could end up finding a resource worth turning into a mine, with all the attendant economic bonuses (and environmental concerns).

Calderwood, at Midas, said there is potential not only for a mine, but also a processing plant. 

“A couple of the companies could get together and do some downstream here,” he said, referring to the concept of downstream processing, an opening stage in moving anything you mine from its raw state to the finished product.

“No reason why you couldn’t, if you’ve got enough tonnage being produced.” 

But Cronk cautions that exploration is the classic process of searching for a needle in a haystack.

“Sometimes you drill, and you miss the needle, and then you just walk. That needle is still sitting there, till the next guy comes along and has a better idea, and whammo, hits the needle,” he said.

“To us geologists, the mother lode is just around the corner, it’s just over that hill, it’s just another 20 metres of drilling. We’ll hit it. We’re determined optimists.”

Correction: June 2, 2023 – 8:14 MT. This report initially stated that lithium is a mineral. Despite its presence on Canada’s critical minerals list, it isn’t. It’s an element that can be found in certain minerals – an example being spodumene, which is the mineral attracting attention near Yellowknife.