May 2, 2018   in Analyst Coverage, Industry News


Natural Resources

2 May 2018


In the news: Plateau Energy Metals


PLATEAU ENERGY METALS††† — Large Lithium Deposit to Go with its Significant Uranium Resource

For Plateau Energy Metals (PLU : CN | C$0.61 | US$31m), drilling results at Falchani in Peru continue to suggest that it is onto a significant lithium deposit. Having outlined some large uranium resources and completed a PEA into the development of a uranium project elsewhere on its Macusani Project area in 2016, the company’s focus has recently changed to the Falchani area. In October 2017 Plateau announced that it had negotiated an access agreement with the local Chaccaconiza community, giving it the right to conduct drilling and environmental baseline work for a period of six months (ie, until mid-April 2018). Previous work had identified a large uranium anomaly of around 2km2 at Falchani, which the company was keen to follow up. The results of the first drill hole were announced in mid-November. This, and other subsequent holes announced (the most recent earlier this week), outlined an upper layer of uranium mineralization that is variable in thickness and grade.

Most significant in the latest results was the presence of a lithium-rich tuff unit that is approximately 80-100m thick, relatively flat-lying and at a depth of from around 100-200m below surface. Drilling and mapping of the outcrop of the tuff unit suggest that it extends over an area of around 2km2, indicating the large-scale resource potential of the deposit.

The lithium grade is reported to be remarkably consistent and averages around 0.7% LiO2. Although this is lower than some competing spodumene-based projects, the deposit has a number of significant advantages, including the indicated low strip ratio, which looks likely to be less than 1:1, and also the potential for bulk mining of the relatively soft tuff material. Initial metallurgical test-work showed that 77-80% of the lithium could be leached to a sulphate solution at atmospheric temperature and at a temperature of 89ºC.

Lithium was reportedly hosted in an unstable volcanic glass matrix, a factor that was responsible for the relatively good leaching characteristics compared to those of spodumene-based mineralisation. However, it appears that material from Falchani will have to be leached as whole ore and, unlike spodumene-based projects, it is unlikely to be concentrated prior to leaching.

In mid-March 2018 Plateau announced that the next stage of metallurgical test-work was underway on a representative 200kg sample that has been sent to the ANSTO labs in Sydney. The programme is planned to confirm the leaching results, impurity removal and lithium product precipitation and characterisation. The company plans to announce an initial lithium resource for Falchani and the results of the metallurgical test-work before the end of 2Q18. We anticipate the publication of a large-scale resource of moderate-grade lithium and expect that the results of the metallurgical test-work will be key to future discussions regarding value.

Corporate Broking


Jonathan Williams

+44 (0)20 3440 6817


Charlie Cryer

+44 (0)20 3440 6834



Jim Taylor

+44 (0)20 3440 6821

Greg Bowie

+44 (0)20 3440 6833

David Bird

+44 (0)20 3440 6822

*RFC Ambrian acts as Nomad to this company

RFC Ambrian acts as Broker to this company

††RFC Ambrian acts as Agency Broker to this company

**RFC Ambrian has acted as a Placing Agent for this company

***RFC Ambrian acts as Financial Adviser to this company

†††RFC Ambrian has received fees from this company over the last 12 months

This document has been approved under section 21(1) of the FMSA 2000 by RFC Ambrian Limited (“RFC Ambrian”) for communication only to eligible counterparties and professional clients as those terms are defined by the rules of Financial Conduct Authority. Its contents are not directed at retail clients as RFC Ambrian does not provide investment advisory services to retail clients.

RFC Ambrian publishes this document as non-independent research which is a marketing communication under the Conduct of Business rules. It has not been prepared in accordance with the regulatory rules relating to independent research, nor is it subject to the prohibition on dealing ahead of the dissemination of investment research. It does not constitute a personal recommendation and does not constitute an offer or a solicitation to buy or sell any security. Neither RFC Ambrian nor any of its directors, officers, employees or agents shall have any liability, howsoever arising, for any error or incompleteness of fact or opinion in it or lack of care in its preparation or publication; provided that this shall not exclude liability to the extent that this is impermissible under the law relating to financial services. All statements and opinions are made as of the date on the face of this document and are not held out as applicable thereafter. This document is intended for distribution only in those jurisdictions where RFC Ambrian is permitted to distribute its research. In particular, it is not intended for distribution in and is not directed as persons in the United States.

On the date of this document, RFC Ambrian, RFC Ambrian’s holding company, persons connected with it and their respective directors may have a long or short position in any of the investments mentioned in this document.

RFC Ambrian is a member of the London Stock Exchange and is regulated and authorised by the Financial Conduct Authority. RFC Ambrian is registered in England and Wales no. 4236075. Its registered office is at Level 5, Condor House, 10 St Paul’s Churchyard, London EC4M 8AL.