Thacker Pass Ain't Worth $1.5 Trillion - Quite Possibly Nothing

People are ignorant of the very basics here

One of those little reports from the world of subject expertise to burst the commonplace belief bubble:

Polymarket

@Polymarket

BREAKING: The U.S. has discovered a lithium deposit worth ~$1,500,000,000,000.00 beneath an ancient super volcano in Nevada.

That’s abject nonsense, complete tosh - whole bollocks.

Lithium Americas Corporation has indeed found lithium at Thacker Pass. That’s not new information, been known about a long time. But the value of that lithium ah, well.

A mineral deposit is not worth the value of the minerals once extracted. That’s not how it works. A mineral deposit is worth the value of the minerals once extracted minus the costs of extracting the minerals.

Think on it, your back garden contains gold. And uranium, helium, rare earths, all sorts of lovely things. Unless you’ve a very odd back garden no one is going to come and mine your back garden for anything other than the minerals to grow cabbages with. Because the cost of extracting those minerals from your back garden are going to be greater than the value of the gold, uranium, rare earths, helium and so on that can be extracted from your back garden.

There are - definitely, definitively - all those elements there. They also have no value as a mineral deposit.

So, a mineral deposit is valued at its nett value, not its gross.

We also have specialised language to describe this. A mineral deposit is just that - summat in the ground. A mineral resource - which comes in two flavours, indicated and inferred, the second being the weaker - is where we think that it might be worth digging up. Where there’s enough, in enough of a concentration, that the costs of extraction are lower than the value extracted. But it’s think, not know.

A mineral reserve is where we’ve proven - well, proven to the best of ability, there can still be slips twixt cup and lip here - that, using current technology, at current market prices, we can make a profit digging this up and, in the most firm form of a reserve, we’ve got all the licences to do so. That is, the costs of extraction are lower than the value of having extracted.

Again, the deposit’s value is that nett value, not the gross, and we have to really know about it too.

So, from Lithium Americas Corporation:

44.5 Mt LCE

Total Measured & Indicated Mineral Resource Estimate

We’ve not proven that any of this is worth spit as yet. We think it is, we’re continuing to spend money on showing it is - this is most of what mining exploration is about, moving the stuff through those certainties of proof from deposit to resource to reserve - but currently we think it’s worth mining. Probably. But because we haven’t nailed down that extraction cost properly as yet we still don’t know whether the value extracted will be greater than the cost of extraction. That’s why it’s still a resource, not a reserve as yet.

Oh, and it’s certainly not worth $1.5 trillion, that’s total buggery bollocks. That’s the value once extracted, if extraction happens, without subtracting the costs of extraction.

Sorry folks, subject expertise is important. Jus’ is.