Yellowknife lithium project touts encouraging results amid market slump

The president of a company exploring for lithium in the Yellowknife area is touting the results of its first drilling campaign — but Li-FT is facing the same challenges affecting the lithium market around the world: low prices.

When Li-FT bought the project properties along the Ingraham Trail in late 2022, lithium prices were around $80,000 a tonne. Now it sells for around $10,000. 

That hasn't discouraged Li-FT president Alex Langer. He says the company's first drilling results suggest that it has the third-largest hard rock lithium deposit in Canada.

He says the current market does make access to capital more difficult, but says the company was lucky enough to raise a large amount during the initial boom.

"I think we've raised $70 or $80 million in the first two years. So we have shareholders and directors that are able to raise capital even in downturns of markets. So it allows us to still push for the project because we do believe in the longer-term price of lithium," said Langer.

He believes that the world may only need 10 or 20 more lithium mines, so while other mining projects slow down or shut down he says Li-FT is preparing for a future lithium boom.

In a news release this week, Li-FT said initial drill results indicate pegmatites in the Yellowknife area hold an estimated 50.4 million tonnes of lithium. Pegmatites are large rocks that host lithium. Five more pegmatites on Li-FT's Yellowknife properties have yet to be drilled. 

Langer says these results place the project within the top 10 largest resources within the Western Hemisphere.

"It sets the stage that we are going to be one of the largest ones," said Langer.

John Ciampaglia, CEO of capital market company Sprott Asset Management, said lithium exploration projects around the world are struggling in the current market. He said numbers have been pretty flat over the last year or so.

"That's because a number of companies say 'we cannot produce lithium at these prices,'" said Ciampaglia.

He said more projects have shut down than have started up

Ciampaglia said companies like Albemarle, one of the world's largest producers of lithium, recently announced that they're curtailing operations and reducing their workforce. 

"When the majors are announcing that prices are not economical to continue production, that is not a great sign for projects that are still in early phases of development, given how much capital they need to get off the ground."