The gold mining companies Osisko Development Corp. (TSX-V: ODV) (NYSE: ODV) and O3 Mining Inc. (TSX-V: OIII) (OTCQX: OIIIF) have established a joint venture to capitalize on the growing demand for lithium.
On Wednesday, they announced the formation of Electric Elements Mining Corp. (EEM). The company, funded by an initial $4.1 million financing, will explore James Bay properties owned by Osisko and O3 in the Eeyou Istchee area of Nunavik, Québec for lithium deposits.
Pursuant to the spin-out and financing by the companies, Osisko now holds 47 per cent of the joint venture’s outstanding shares and O3 has 12 per cent. The remaining 41 per cent are in the possession of subscribers who participated in the financing.
The spin-out transaction forming the company involved Osisko providing all of the shares and partnership units in its subsidiaries holding a stake in its James Bay properties in exchange for 9.6 million shares of Electric Elements Mining. O3 Mining transferred EEM the stake it holds in its Éléonore Opinaca property in the region for 2.4 million shares of the new lithium explorer.
Osisko is a company focused on developing a series of gold projects in central British Columbia, Utah and Mexico. It has a $359.6 million market cap and an enterprise value of $279.4 million.
O3 Mining has a portfolio of seven projects in Val d’Or, Quebec; Osisko has a 21.2 per cent stake in the company.
James Bay is a top Canadian lithium mining jurisdiction
Lithium was listed as one of the top six critical minerals in the Canadian government’s critical minerals strategy. Canada currently holds an estimated 3.2 million tonnes of lithium oxide resources.
In January, the federal government approved the James Bay lithium mine project, an open-pit spodumene mining operation expected to last for 15-20 years. It is operated by the private company Galaxy Lithium (Canada) Inc. and will produce an average of 5,480 tonnes of ore per day.
In 2022, Canada produced approximately 0.4 per cent of the world’s lithium and sat in spot number 8 on the list of top producers. Australia is the number 1 producer of the battery metal, accounting for about 47 per cent of lithium production globally last year.
However, Canada increased its lithium oxide and hydroxide exports by 46 per cent year-over-year in 2022. The majority of the commodities came from Quebec and were exported to France.
Other companies actively mining and exploring for lithium in Quebec include Arbor Metals Corp. (TSX-V: ABR) (FWB: 432), Patriot Battery Metals Inc. (CSE: PMET) (OTCQB: PMETF), Azimut Exploration Inc. (TSX-V: AZM) (OTCQX: AZMTF), Piedmont Lithium (Nasdaq: PLL) (ASX: PLL) and Lithium One Metals Inc. (TSX-V: LONE).