ACME Lithium (ACME) - Financed for Drilling & Results Due in August

ACME Lithium Inc. is a Canadian mineral company focused on building partnerships with leading technology and commodity companies, for the acquisition, exploration and development of battery metal projects.

The company announced on the 19th of May 2022, that it had closed a second and final tranche of its non-brokered private placement financing of CAD$ 1.25 million for the total combined proceeds of CAD$ 5.7 million towards the company. The conclusion of the non-brokered private placement financing has placed the working capital of the company at CAD$ 11.9 million, with no debt. The company intends to implement the raised funds towards various exploration initiatives.

ACME Lithium Inc. announced on the 22nd of June 2022, that it had completed the drilling of drill hole DH-01 at its Clayton Valley lithium brine project to a total depth of 1400 feet or 427 metres below the ground surface. The preliminary analysis of the project has indicated a high probability of hosting aquifer units based on permeability features, lithology and colour. The results of the DH-01 drill hole are expected by the end of August 2022.

The company announced on the 7th of July 2022, that it had commenced with an extensive summer exploration program at its 11,803-acre Shatford and Cat-Euclid Lake project areas, located in south-eastern Manitoba. The exploration initiatives will be focused on areas that show abundant outcrops within the favourable structural domains to identify joint sets favoured to host pegmatite bodies. ACME Lithium Inc. has also recently announced that it had commenced with an airborne geophysical survey at the projects. The survey will consist of a total of 1,989 kilometres at a line spacing of 65 m.

Company business model

ACME Lithium Inc. follows an exploration business model with the primary aim being the advancement of the project to a mineral resource estimate. The aim of de-risking the project is to be able to bring in a strategic partner. Hanson explains the rationale regarding involving a strategic partner as follows:

“…what I've done with many companies in my past is I bring in larger strategic partners at a certain stage, that have the capital, the deep pockets, the wherewithal and know-how to advance these projects into production. There are a number of exit strategies that can be created: you can joint venture with a major company or there is M&A activity.”

Hanson further explains that various companies are approaching junior mining companies to create a joint venture. Hanson raises the acquisition of Lithea Inc. an Argentinean lithium company by Ganfeng Lithium Co. for approximately USD$ 1 billion as an example as well as Ford investing in Ioneer Ltd., an Australian emerging lithium producer. Hanson explains the phenomenon as follows:

“There are many companies within this battery metal space, that are aggressively pursuing these types of opportunities, whether they be commodity miners, technology companies, off-takers, and even now the auto manufacturers, we're seeing these types of companies come into juniors at an earlier stage, the earliest age that I've seen in my career, and really what it says is about the desperation for lithium as a commodity.”

Private placement offering

ACME Lithium Inc. announced on the 19th of May 2022, that it had concluded with a second and final tranche of its non-brokered private placement offering for the total gross proceeds of CAD$ 5.7 million. The second tranche follows the company’s oversubscribed initial private placement offering, which saw the company receive CAD$ 4.45 million in gross proceeds. Steve Hanson, the president, CEO and founder of ACME Lithium Inc. explains the raise as follows:

“We were very fortunate in that we were able to raise some additional funds in what has been a very difficult spring/summer marketplace, but we have the support of some key institutional investors. We actually had a decent amount of capital when I went out for this raise, and a couple of our institutional clients were interested in continuing to add to our coffers.”

The second tranche of the private placement offering was motivated not only due to the global commodity markets but also to enable the company to be well financed to pursue its various planned exploration initiatives. Hanson explains the rationale as follows:

“We were fortunate to raise additional capital. It was actually more than what we intended to raise, but looking at it, it was a very good idea at this time, as we're in good shape from a running room standpoint; we've got no debt, no preferred shares, and we're sitting on a war chest of capital that will allow us to not only explore multiple projects this year, in 2022, it'll give us running room into 2023. In this kind of investment climate, we're in really good shape as a company.”

The combined private placement offering consisted of the issuing of approximately 3.4 million units of the company at CAD$ 1.08 per unit. A unit consisted of one common share of the company as well as one common share purchase warrant. A purchase warrant entitles the holder thereof to purchase a common share of the company at CAD$ 1.40 for 3 years after the closing of the offering. The issuing of units resulted in the gross proceeds of approximately CAD$ 3.7 million.

The private placement also consisted of the issuing of 666,668 flow-through units. The units of the company were issued at CAD$ 1.50 per flow-through unit for the gross proceeds of CAD$ 1 million to the company. A flow-through unit of the company consisted of one flow-through common share and one-half of one non-flow-through common share purchase warrant. A non-flow-through common share purchase warrant entitles the holder thereof to purchase a common share of the company at CAD$ 1.80 for two years after the closing of the private placement.

Hanson explains the use of flow-through financing in the private placement offering and its rationale as follows:

“There is a mechanism in Canada called flow-through financing, and really, it's tax-incentive financing for investors. The money that's raised has to be deployed in Canada. It is to incentivize investors and companies to deploy capital nationally in Canada in the resource sector.”

The raised funds will be implemented towards the advancement of the company projects and will also enable the company to aggressively pursue drill programs in the fall of 2022.

Clayton Valley Lithium project

The Clayton Valley Lithium project of the company is a 2,440-acre land package, which the company has an option to acquire 100% of. The project consists of 122 claims and is located in Esmeralda County, Nevada. The project hosts lithium brine with historical drilling information and geophysical surveys showing basin-fill sediments and aquifers similar to sediments currently producing lithium brines in the region. Hanson sums up operating in Nevada as follows:

“Nevada has been named recently as the number one mining jurisdiction in the world, and it continues to have a long history in the resource sector. What's great about Nevada is that you can work there 12 months of the year. There is good infrastructure, power, roads, there are lots of great technical people as well as consultants. As a jurisdiction, Nevada is an excellent place for us to be operating”

The United States of America is also attempting to advance critical mineral projects which include lithium. The Biden administration has invoked the Defence Production Act of 1950 to encourage domestic production of minerals required to make batteries for electric vehicles and long-term energy storage. Hanson explains that Nevada and the USA are actively attempting to advance critical mineral operations and that the only challenge may be the issuing of permits, he states:

“From a government regulation standpoint, this past spring, President Biden invoked the Defense Production Act around critical minerals, such as lithium, and this is the first time that this has been done in the history of the United States. That really talks to the crisis that the US is facing for a domestic supply of lithium. Part of that Defence Production Act is the creation of a USD$750M fund. Part of that capital will be used to assist in the permitting process. It'll be partly used to work on new technology for research and development, but again, I believe the biggest bottleneck is going to be at the state and municipal level, ensuring that permits move along without a lot of red tape.”

ACME Lithium Inc. announced on the 22nd of June 2022, that it had completed the drilling of drill hole DH-01 at its Clayton Valley lithium brine project to a total depth of 1400 feet or 427 metres below the ground surface. The preliminary analysis of the project has indicated a high probability of hosting aquifer units based on permeability features, lithology and colour. Hanson explains the company’s exploration initiatives at the project as follows:

“Samples were sent to the lab in early July. We're expecting to see results sometime towards the end of August. Again, this is one of the biggest catalysts for us. We're hoping to make a discovery here, and what is key here is that in the brine, we know we're into the aquifer, we're into the right horizons, we've got the right host, the question is, are we going to have economic-grade lithium? We are expecting a key milestone and hopefully a catalyst here to take place sometime towards the end of the summer.”

The assay results for the DH-01 drill hole are expected by the end of August 2022.

Shatford and Cat-Euclid Lake project areas

ACME Lithium Inc. announced on the 7th of July 2022, that it had commenced with an extensive summer exploration program at its 11,803-acre Shatford and Cat-Euclid Lake project areas, located in south-eastern Manitoba. The exploration initiatives will be focused on areas that show abundant outcrops within the favourable structural domains to identify joint sets favoured to host pegmatite bodies. ACME Lithium Inc. has also more recently announced that it had commenced with an airborne geophysical survey at the projects. The survey will consist of a total of 1,989 kilometres at a line spacing of 65 m.

Hanson explains that the appeal of the area is due to it hosting existing Lithium-Caesium-Tantalum (LCT) pegmatites as well as the Tanco Mine, owned and operated by the Sinomine Resource Group., he states:

“The reason why I focused on south-eastern Manitoba is that there actually is an existing lithium caesium and tantalum line, called the Tanco mine. It's been there off and on producing since 1969, and we were fortunate to secure 2 projects, 1 a couple of kilometres south of the Tanco mine. We actually are their southern neighbour and border their mineral leases.”

Future

ACME Lithium Inc. will continue to advance its Lithium projects in the coming year, with the company announcing on the 4th of August 2022, that it had commenced with geological fieldwork at its Fish Hook project, located near its Clayton Valley Lithium project. The fieldwork aims to better understand the lithium occurrences at the project. Hanson explains the company’s intent as follows:  

“I just gave the green light to start doing some work in Fish Lake Valley. We're going to begin some exploration there as well, starting sometime in August. We're going to be active. We've got the capital to do that and a number of ways to offer opportunities to our shareholders”

The company will implement its cash position of approximately CAD$ 11.9 million towards its ongoing exploration initiatives at its south-eastern Manitoba projects, as well as at its Clayton Valley Lithium project. Hanson sums up the company’s cash position as follows:

“I'm in good shape so that I can last, we can continue to have major milestones within our company with the capital that we have.”

The company plans to spend approximately CAD$ 2 million to CAD$ 3 million on the Clayton Valley Lithium project in the coming year pending the project’s assay results and CAD$ 3 million to CAD$ 4 million on its eastern Manitoba projects. 

To find out more, go to the ACME Lithium website