by Greg Klein | February 18, 2016
One’s a luxury, the other’s a practicality that many consider necessary. Prima Diamond TSXV:PMD apparently wants both, by adding an energy minerals project to its gemstones prospects. To that end the company announced on February 18 an agreement to acquire the Green Energy lithium property in Utah.
The project comes with an historic, non-43-101 resource of 15 million barrels of brine containing 96,000 tons of sodium, 158,000 tons of potassium (302,400 tons of potassium chloride), 5,750 tons of lithium (30,535 tons of lithium carbonate), 157,000 tons of calcium and 147,000 tons of magnesium (576,450 tons of magnesium chloride).
Prima has yet to verify the data, which the company isn’t treating as a current resource.
Approximately 20 oil exploration wells have been drilled on the 1,683-hectare property, five of which have analytical data for lithium, according to the announcement. Lithium occurs “in an over-saturated brine (40% minerals, 60% water) and was discovered during oil exploration when drill wells intercepted Bed #31 of the Paradox Formation.”
Bed #31 is around 1,683 metres deep, consisting of 9.15 metres of shale, anhydrite and dolomite, Prima stated. “The bed is not part of any oil reservoir. Engineering reports from the 1960s conclude that the brine reservoir is extensive [over 25 square kilometres] and is recharged from fresh inflows as indicated by well pressure measurements, drawdown tests and oxygen-deuterium isotopes.”
Prima intends to review well logs, undertake chemical analysis and reprocess seismic data focusing on mineral brine to evaluate reservoir potential prior to re-entry of shut-in wells.
Prima shareholders will vote in March on a proposed 1:5 share rollback. Subject to approvals, the company would acquire Green Energy by reimbursing Zimtu Capital TSXC:ZC $10,000 in acquisition costs and issue Mesa Exploration TSXV:MSA 1.5 million post-consolidation shares within five days of TSXV approval and another 1.5 million shares within the following year.
The company also proposes a private placement of up to 15 million post-consolidation units at $0.05 for up to $750,000. Each unit would consist of one share and one transferable warrant, with each warrant exercisable for $0.075 during the first year and $0.10 during the second year. Funds would go to Green Energy exploration and general administrative purposes.
The company also announced debt settlement agreements with creditors. Subject to TSXV approval, Prima would issue 15.82 million post-consolidation shares at a deemed price of $0.05 to settle $791,000.
With Tesla/Panasonic’s Gigafactory one of three lithium-ion battery megafactories expected in the coming years, along with expansions to existing plants, lithium figures prominently among the niche minerals required for consumer electronics, electric vehicles and energy storage. Read more.