General Base Metals
Cypress Development Corp. (TSX-V: CYP)(OTC: CYDVF) CEO Dr. Bill Willoughby on Progress at Flagship Clayton Valley Lithium Project, Nevada, and Closing of Oversubscribed C$19.5 Million Financing
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Cypress Development Corp. — Dr. Bill Willoughby. Bill, how are you today, sir?
Dr. Bill Willoughby: I'm doing great. Yeah, it's nice to be with you this morning.
Gerardo Del Real: Thank you so much for taking time. I've had a lot of interest in Cypress. We talked a bit off air, and I want to get into the asset. I want to get into what, obviously, is a surging mega trend that isn't slowing down anytime soon, right, the electrification of everything and how Cypress and shareholders can benefit from it.
But for those that aren't familiar with you and your past success, can you give us a brief background on yourself and some of the successes you've had? You've been great at monetizing assets in the past, obviously. And then, we'll get into Cypress and the company.
Dr. Bill Willoughby: Well, sure. I came to Cypress in 2017. Before that, I had been in a couple of different junior companies and with a major. All along, I've been working in project development and mining and was with a company, Teck Cominco, for about 18 years before that.
So I've got some background there in hydrometallurgy from those days and also the junior companies after that. I did a doctorate in Mining Engineering & Metallurgy at the University of Idaho back in '89. So I've been around the block for a few years.
We've got a really great team. I want to speak more to that with Cypress. We've got a metallurgist out of Butte, Montana, Todd Fayram, who's been involved with this project all along; has done a lot of his ideas and thinking through there. Another fellow out of Colorado School of Mines, Corby Anderson, has been instrumental in working with us on this project.
And then we have a great team building up around moving the project forward. A good mining engineer out of Nevada, Adam Knight, and our consulting geologist, Dan Kalmbach, all working on the team together.
Gerardo Del Real: Excellent! Let's talk about the project; the Clayton Valley Lithium Project. Again, for those not familiar, in Nevada. Can you tell us a bit about the project itself?
Dr. Bill Willoughby: Yeah. Well, this is unique in that it's a lithium clay. And the clay was deposited in a lake environment. It's in Clayton Valley, which is a closed basin; sits about halfway between Las Vegas and Reno. There's a number of clay projects coming along. Some of these you might be familiar with, or your listeners.
There's Lithium Americas' Thacker Pass Project up north of Winnemucca; ioneer Ltd. has Rhyolite Ridge to the west of us by about 40 miles; and in Mexico, there's Bacanora's Sonora Project.
So the unique thing about these is they're in clays. Lithium contents range from a thousand to several thousand parts per million. They're quite extensive; large resources in each one of them. And it's a new type of deposit as far as lithium production goes.
Most of the lithium in the world comes out of either brines or hard rock pegmatites. So no one's really gotten into commercial production yet with lithium clays. But there's four right there that are at the feasibility stage now. So we're all moving forward and looking at different ways of extraction.
Gerardo Del Real: You have a market cap that's a fraction of the net present value from the pre-feasibility study that was published back in August of last year. Can we go into the pre-feasibility study a bit?
And then, let's get into what the approach will be moving forward as far as development. And you and I joked off air that I had a lot of questions regarding NDAs. And so I want to make sure that listeners and readers are aware that we joked that… The first rule of Fight Club is you don't talk about Fight Club!
Dr. Bill Willoughby: Right!
Gerardo Del Real: I know the NDAs prevent you from discussing a lot of the questions that I received. But we will get into… I would like to get into… the mine's state moving forward. Do you plan on developing this on your own? Are you open to a potential joint venture?
But let's talk pre-feasibility study. Again, you're trading at a fraction of the net present value. Can you walk me through that a bit?
Dr. Bill Willoughby: Yeah. Well, you would expect to not be fully valued at your NPV on a project anyway. Where we're sitting today is reasonable in my view of where we are right now and where we're going to go forward. So what we designed on the project was a mine that would produce about 27,000 tonnes a year of lithium carbonate or lithium carbonate equivalent.
Our goal is to produce lithium hydroxide monohydrate out of the project. So that's an end product we want to attain. But our production rate was 27,000 tonnes in the PFS; that was based on mining 15,000 tonnes a day. So a relatively small-ish mine as far as excavation goes.
One of the benefits of our project; it's flat lying, it's right at the surface. There's barely any overburden on it, and what overburden we have is like a veneer of gravel. So it lends itself to a really low strip ratio. It’s a clay; it doesn't require drilling and blasting. So you can excavate it with an excavator, throw it on a conveyor, and take it to a mill.
The mill is going to be acid bleach extraction; either sulfuric acid or hydrochloric acid. We are looking at the latter right now as an option. But probably that's the first thing we're going to look at going forward is the extraction using hydrochloric acid in our pilot plant program.
But from the plant perspective, it's fairly straightforward. We do leach extraction, get the lithium into solution, separate the solids out from the liquids. And then from there, we go into a direct lithium extraction process, most likely using some form of ion exchange of membranes in reverse osmosis to get to the point where we've got a solution, which we can then concentrate and make a lithium product from.
So all of the basic parts of it look fairly straightforward to us. And what we're engaged in right now is working towards a pilot plant program, which will demonstrate this on a larger scale than what we've done in the past.
Gerardo Del Real: Do you have a timeline for those pilot plant results? I know a gentlemen, Stuart Semple, wrote in and asked what the timeline looked like and the same for a feasibility study.
Dr. Bill Willoughby: Yeah, well, my timeline is always as fast as possible. And the very first thing we want to do is… we do have a metallurgical facility space in one leased south of Beatty. It's actually a gold refinery, so it's already permitted and has chemical permits for the materials we want to handle there. It's a little ways from the project but it's a reasonable distance. So we can bring down our bulk sample and test it there.
Then, we've already started the process of ordering up some equipment for it. We've already got the thickeners ordered and they're being refurbished at this moment in Winnemucca. So things are moving along. Hopefully, we get this thing put together sometime in the space of around May or so. And then, have her up and running, our pilot plant program, during the summer.
Gerardo Del Real: Excellent. And given your track record, are you looking to build this yourself, Bill; you and the team? Or is monetizing it an option with an attractive enough offer?
Dr. Bill Willoughby: Yeah, down the road. I think we don't have a For Sale sign on us right now. We're looking at the production scenario and what we can do to advance it. We're obviously open to other parties coming in, taking a look and, say, joint venturing with us — particularly if they have things to offer.
But right now at this point, we're carrying forward as though we're going to take it all the way to production, which my team is completely capable of doing.
Gerardo Del Real: You just closed a financing for nearly C$20 million; an oversubscribed financing, I should mention. How do you plan to allocate the funds here?
Dr. Bill Willoughby: Oh, that's definitely going into the pilot plant program first and foremost. We've got some things to do on water supply and acquisition. So we'll take a look at that and see if we can make progress there. And, basically, we've just got a nice treasury right now to do the work that we've always wanted to do.
We've been at this lean junior company stage quite a while. But now with this financing, which I have to say thanks to PI Financial for carrying us through that. That was great; their team did a great job. Our team worked really hard on getting this financing closed. It puts us, probably, in the best financial position Cypress has been in for quite a while. So I'm quite happy with where we're sitting today.
Gerardo Del Real: Fantastic! You answered my next question. I was going to ask you about the water. But it sounds like you have your finger on the pulse of that. And it sounds like that's likely something you can't comment on right now as well, right?
Dr. Bill Willoughby: Exactly. You don't just sort of show your cards while you're at the table.
Gerardo Del Real: Agreed! Bill, it sounds like there's an exciting couple of quarters ahead of us. Again, I don't believe that the electrification of everything is a fad or something that is going to go away anytime soon, especially with, frankly, we have government mandates now to go greener, right, and a pivot towards electric.
So I think you're in the sweet spot of the cycle. Is there anything else that you'd like to add?
Dr. Bill Willoughby: Oh, I think that was good. Every day, you see something new coming out on the EVs. Over the weekend, I saw a Ford Mustang and it was an all-electric. So I think it is here to stay, and it's a great place to be for where our project is. So all of these cards seem to be lining up for us.
Gerardo Del Real: Agreed. Sir, thank you so much for your time. I'm looking forward to having you back on as you check the boxes off here this year. Quite a list!
Dr. Bill Willoughby: Excellent!! Yeah, thank you for the time. Appreciate it and thank your listeners too.
Gerardo Del Real: Thank you. Stay safe out there. Bye now.
Dr. Bill Willoughby: Will do.