SPENCER LITHIUM PROJECT – NEVADA USA(Zenith 45%, subject to JV partner meeting funding obligations)
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The Spencer Project is located in Lander County, Nevada near the lithium production area of Silver Peak-Clayton Valley (Figure 1). The Project is 100% owned by Zenolith (USA) Inc (“Zenolith”) a wholly owned subsidiary of Zenith Minerals Limited, and is located in the North Smoky Basin northwest of White Mountain. The property is comprised of 146 unpatented placer claims in two claim blocks totalling 2,920 acres that were located in November 2016 to encompass highly anomalous lithium in surface sediments and water samples, in close proximity to the Spencer hot spring that lies on the eastern margin of the North Smoky Valley basin, coincident with inferred major basin margin faults (Figure 2a).

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The project is underlain by a sequence of sedimentary formations and has fault structures similar to those found in the zone of production at the Albemarle lithium processing facilities at Silver Peak which are located approximately 170 kilometres southwest of the Spencer project. Geophysical and shallow drilling investigations performed under a U.S. Department of Energy contract in 1979 – 1980 were designed to examine the Spencer Basin gravity low, to determine basin depth, configuration, examine the sedimentary basin fill and estimate geothermal potential. The geothermal study provides an excellent initial framework for targeting lithium brines.

The Nevada Bureau of Mines under contract to the U.S. Department of Energy previously performed detailed gravity and drilling investigations that identified a layered sequence of sedimentary formations filling a deep basin beneath and extending west of Zenolith’s Spencer property. The identified basin beneath the property is faceted by faults of unknown displacement that resulted in the development of an asymmetric graben style basin with its deepest portion adjacent to the Spencer property.

The geophysical investigations have identified structures and architecture that are consistent with the lithium-bearing brine deposit models identified in the adjacent Clayton Valley area. A deep basin containing a thick sequence of saturated sedimentary formations is apparently present beneath the Spencer property. Initial surface sediment samples taken by Zenolith are enriched in lithium up to 550ppm (Figure 2b) whilst the nearby Spencer hot spring waters contain elevated levels of lithium (2ppm), supporting the hypothesis of enriched lithium waters at depth.

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The nearby Silver Peak operation in Clayton Valley is currently the only operational USA lithium project. Production by Albemarle Corporation formerly Rockwood Lithium, is facilitated through an extraction system that pumps groundwater enriched in lithium to surface solar evaporation ponds on the property. Evaporation of fluid from the ponds over a period of 12 to 18 months increases the lithium concentration prior to transfer of the concentrated brine to a processing plant for final product development. Tesla’s lithium ion battery production facility (Gigafactory) is under construction nearby, also in Nevada.
The conceptual deposit model for Zenith’s Spencer Projects is adapted from the known deposits being exploited by Albemarle Corporation. Six different water-bearing formations or aquifer types have been identified in Clayton Valley. These are specific volcano-sedimentary units within the valley-fill sequence that are either saturated in lithium-enriched brine or contain salt or clay minerals with anomalously high concentrations of lithium. In addition, recent lithium brine drilling success by Pure Energy Minerals (TSX-V:PE) in the south of Clayton Valley provides an additional lithium brine host architecture model, whereby basin margin faults along the eastern boundary have a strong control on the host sequences and entrained lithium brines.
The geologic setting within the closed Great Basin, with its thick sequence of Quaternary age clastic sediments, ash beds and evaporate deposits is prospective for lithium brines. The geologic formations that compose the surrounding mountain ranges, specifically certain Tertiary-age volcanic formations, contain anomalous concentrations of lithium and are considered one likely source of lithium in brines and sedimentary layers similar to those in the Clayton Valley area. In addition, Quaternary age tuff units crop out within the Spencer claims; these units are a second potential source for lithium in brines.
Initial reconnaissance sampling by Zenith returned up to 550ppm lithium in surface sediments at the Spencer project, these results are comparable to and higher than those from many competitor lithium brine projects in the USA.