Western Lithium Commences Additional Drilling in Nevada to Support Long Term Lithium Carbonate Production

The purpose of this drilling is to determine if additional years of National Instrument 43-101 compliant mine life can be added to the proposed project. According to the original Chevron data, the Stage II lens is approximately seven times larger than Stage I lens, so only a portion of the lens will be drilled at this time.

"This drilling program is intended to continue to confirm the earlier Chevron work and support our staged development plan for the project," said Jay Chmelauskas, Western Lithium’s President. "We are positioning our project in Nevada to become a major center and United States-based strategic supplier of high quality lithium carbonate for the next generation of lithium-ion battery powered transportation and mobile electronics."

The Stage II drilling is intended to provide additional confirmation of the historical resource originally drilled by Chevron Resources in the 1980s. The drilling, on a portion of the Stage II lens, is expected to take approximately two months to complete and will consist of 38 core drill holes in the main central portion of the lens. Drilling of Stage I in 2008 focused on only one of five mineralized lenses and the results supported the work previously carried out by Chevron.

A National Instrument 43-101 resource estimate has been completed for the initial Stage I lens which contains Indicated Resources of 48.1 million tonnes grading 0.27% lithium, or the lithium carbonate equivalent ("LCE") of 688,000 tonnes LCE and Inferred Resources of 42.3 million tonnes grading 0.27% lithium, for an equivalent of 606,000 tonnes LCE, both at a cut-off grade of 0.20% Lithium.

The cost of this drilling program is expected to be approximately $800,000 and is in addition to the previously announced Stage I drilling and trenching program planned for 2009.

Western Lithium is developing the Kings Valley, Nevada lithium deposit into potentially one of the world’s largest(1) strategic, scalable and reliable sources of high quality lithium carbonate. The Company is positioning itself as a major U.S.-based supplier to support the rising global demand for lithium carbonate that is expected from the increased use of mobile electronics and hybrid/electric vehicles.

Lithium is the lightest of all metals, with a density of about half that of water. Lithium is the third element in the periodic table and the first element in Group I, the alkali metals group. Like the other metals in the group, it is so chemically active that it never occurs as a pure element in nature; it is always bound in stable minerals or salts.

 Where is it found?

Economic concentrations of lithium are found in brines, minerals and clays in various parts of the world. Brines and high-grade lithium ores are the present source for all commercial lithium production. The largest known deposits of lithium are in Bolivia and Chile.

The brines, volcanic in origin, are present in desert areas and occur in playas and salars where lithium has been concentrated by solar evaporation. In the salars (saline desert basins sometimes known as salt lakes or salt flats), the brine is contained at or below the surface and is pumped into large solar evaporation ponds for concentration prior to processing. When the basin surfaces are predominantly composed of silts and clays with some salt incrustation, they are referred to as playas. If the surface is predominantly salt they are called salars. Although the fundamental character of the deposits is similar, there is great variability in size, surface character, stratigraphy, structure, chemistry, infrastructure and solar evaporation rates.

The recovery of lithium from hard rock minerals, such as spodumene in pegmatites, is through open pit or underground hard rock mines using conventional mining techniques. The ore is then processed and concentrated using a variety of methods prior to direct use or further processing into lithium compounds.

Lithium also occurs in significant concentrations in the mineral hectorite, a trioctahedral smectite, which forms the Western Lithium hectorite clay deposit. The lithium bearing clay of Western Lithium’s Nevada deposit lies near the surface where it can be mined from an open pit, likely without blasting. The lithium will be extracted from the clay through either a pyrometallurgical (roasting) or hydrometallurgical (solution) method.

In addition, several areas of the world carry potential lithium raw materials in the form of geothermal and oil-well brines.

Lithium is used in numerous applications in three basic forms: ore and concentrate, metal, and manufactured chemical compounds. Lithium’s electrochemical reactivity and other unique properties have resulted in many commercial lithium products.

New Demand for Lithium

For many years, the majority of lithium compounds and minerals were used in the production of ceramics, glass and primary aluminum. Rapid growth in lithium battery use has resulted in batteries gaining significant market share, and rechargeable lithium-ion and lithium-polymer batteries appear to have the greatest potential for growth.

Lithium is ideal for use in battery applications as it has the highest electric output per unit weight of any battery material. Battery manufacturers are increasingly moving to lithium-based batteries from other battery materials and lithium carbonate, which Western Lithium intends to produce, has been the focus of recent research for use in batteries for electric vehicles.

Portable consumer goods are expected to provide some growth in demand for lithium batteries; however the start of mass production of hybrid, plug-in hybrid and electric vehicles using lithium batteries by major automotive manufacturers such as Toyota, Honda, Nissan, Renault, BYD, Mitsubishi, Hyundai, Ford, Chevrolet and GM presents the most significant upside potential for lithium demand.

Consumption of lithium compounds and chemicals, such as lithium carbonate, in lithium batteries increased by 22% per year from 2000 to 2008. Present battery applications include watches, cell phones, portable computers, wireless handheld devices, electronic games, calculators, video cameras and handheld power tools. Nearly all cellular phones and laptop computers now incorporate lithium batteries because of their higher energy density and lighter weight than alternatives.
Industrial Demand

Ore and concentrates are primarily consumed by the glass, ceramic, and porcelain enamel industries. Perhaps the most recognized application is Corning Ware, in which lithium allows the ceramic to be used from refrigerator to oven without shattering.

In metal form, lithium is the lightest solid element and is used in lithium aluminum and lithium magnesium alloys in aircrafts, where it imparts high-temperature strength, improves elasticity and increases the tensile strength. In purified form, lithium carbonate is used in the chemotherapeutic treatment of bipolar disorder.

Hybrid Vehicles – Hybrids have an electric motor and a small bank of batteries that assist the engine, providing boosts of power or extending the range the vehicle can go, along with an internal combustion engine. Hybrids use the gasoline engine plus regenerative braking to recharge the battery. In a hybrid, the gasoline engine shuts down when the vehicle is idle, saving energy and reducing emissions, and restarts seamlessly when the driver steps on the accelerator.

Plug-In Hybrid Vehicles – A hybrid with more batteries, a charger and an electrical plug, allowing longer driving in electric mode, using less gasoline and producing fewer emissions. By plugging into an existing wall electrical socket overnight the distance traveled on battery power is significantly extended. If not plugged in, it operates like a normal hybrid.

Electric Vehicles – Vehicles powered by one or more controllers and a large bank of batteries with no gasoline engine. Electric vehicles plug into a wall socket or other source of electricity to recharge the batteries. Regenerative braking systems use the electric motor to convert some of the vehicle’s kinetic energy (the energy associated with a car in motion) into electricity that gets fed back into the batteries when the driver slows down or stops. In conventional cars, that kinetic energy simply becomes heat on the mechanical brakes used to stop the car and is wasted.

Electric vehicles can be equipped with special chargers that plug into 220-volt sockets (the kind used for clothes dryers) to provide a faster charge.

Until recently, electric cars could go about half the distance of a typical gasoline tank. With modern Lithium-ion batteries, that gap has narrowed, but state-of-the-art batteries manufactured in small quantities remain relatively expensive. Recent research into lithium-based batteries is expected to improve performance and mass adoption and manufacturing are expected to lower battery costs making electric cars a viable choice for the vast majority of drivers.

Electric vehicles are better vehicles.

Simplicity – Electric cars have 70% fewer moving parts than internal combustion engine cars. No ignition, gas tank, oil filter, catalytic converter, or muffler, to name a few unneeded parts. There’s less to go wrong, so less to service and a longer life: no oil changes or tune-ups. Since the regenerative braking systems helps slow down the car, brakes get used less and need replacing less often. Except for attention to a few components, like rotating the tires, there’s relatively little work to be done on electric cars.

Efficiency – Electric vehicles us less energy than gasoline vehicles. Electric drive systems are able to convert more of the available energy into the force that propels the car, wasting less energy and requiring less energy to go the same distance as a gasoline car. In addition the use of regenerative breaking eliminates the wasted energy that is normally converted to heat from friction. And, under a "wells-to-wheels" comparison, which accounts for the energy used to make the fuel (electricity or gasoline), the energy loss in transporting the fuel, and the energy used to run the car, it is estimated that an electric car requires only about one-third of the energy required by a gasoline-powered car for comparable performance.

Cost – Driving on electricity costs one-quarter to one-half of the cost of fueling conventional cars or hybrids because driving on electricity is more efficient and electricity is less expensive than gasoline – even with oil at $40 per barrel. In terms of sticker price, electric cars and hybrids have been more expensive, mainly because they have never been mass-produced and the cost of batteries has also been high, again because they have not been produced in sufficiently large quantities to reach a scale of production that would lower costs. The mass production of hybrids, however, has started to reduce the cost of many of the electrical components and that trend should continue as plug-in hybrids and electric cars hit the market. Despite the higher initial cost consumers still save money because the savings in fuel offsets the higher initial sales price.

Emissions – An electric car has no tailpipe because it has no emissions. On a "wells-to-wheels" basis fewer emissions are produced, even when you include the emissions from power plants. It is expected that as the economy turns to renewable and other sources of non-greenhouse gas emitting electrical power generation in the coming years, this emissions advantage will improve further. In addition, emissions are moved away from large population centers to fewer single point power plants, where they are easier to regulate and reduce than trying to control emissions from hundreds of millions of tailpipes.

Power – Modern electric vehicles have plenty of power. The land speed world record for electric vehicles is 271 miles (436 kms) per hour. Many of the new electric sport vehicles can accelerate from zero to 60 miles per hour in under 4 seconds.

Convenience – Both electric vehicles and plug-in hybrids bring the convenience of charging at home, typically overnight.

Noise – You don’t need a muffler for an electric car because there’s nothing to muffle. No engine, no ignition
The infrastructure is in place

The infrastructure required to switch to electric cars is already in place. The U.S. Department of Energy’s Pacific Northwest National Laboratory estimates that 84% of cars, trucks and SUV’s could be powered by the U.S. electrical grid overnight during off-peak usage without a single additional power plant being built.
The political will is in place

There are a number of driving forces behind the push for electric cars. Among them is the desire to reduce the western world’s dependence of foreign oil and increasing worldwide desire to reduce carbon dioxide and other greenhouse gasses.

The U.S. alone:

* consumes 25% of the world’s oil supply, yet has only 3% of the global oil reserves.
* spent an estimated $600 billion on foreign oil – more than its entire defense budget.
* imports two thirds of its oil.
* uses two thirds of all oil used in the U.S. directly for transportation. In contrast, only 2% of the U.S.’s electricity is generated from oil.
* 97% of fuel used for U.S. transportation is oil based.

Moving to the forefront of the advances in battery technology is a stated aim of the Obama administration, with the recent stimulus package including $2 billion for battery development.

Why lithium batteries?

The last decade has seen a significant amount of development work on lithium batteries for vehicles, which has been greatly enhanced by the efficiency and safety improvements in the lithium batteries for portable electronics. Prices have started to decline and are expected to drop considerably with the mass adoption of electric vehicles providing economies of scale and government subsidies providing increased incentives in the short term.

Lithium batteries enjoy several advantages over Nickel Metal batteries used in hybrid cars today, including greater cell voltage, higher energy and power densities, higher useful capacity, greater charge efficiency, lower self discharge rates and a longer operating life.

Nearly every major car manufacturer now has a lithium battery project underway and there is a push underway for lithium batteries to power the vast majority of electric cars from 2011 onwards.

Development of alternative energy generation technologies such as solar and wind power is also increasing. Many of these technologies capture energy as it is available and store it for use when needed. These increased storage requirements are also expected to impact the demand for lithium-based batteries.