Disseminated on behalf of Surge Battery Metals Inc.
Grade matters because it affects how much lithium a project can produce and how costly it is to operate. Higher grades generally mean more lithium can be recovered with lower costs. This matters for projects that want to compete in the fast‑growing electric vehicle (EV) and energy storage markets.
Let’s explore why grade is essential for lithium clay projects and learn how it affects economics, operations, and investor interest. More notably, we highlight how Surge Battery Metals’ Nevada North Lithium Project (NNLP) stands out in this context.
What “Grade” Means in Lithium Projects
In mining, “grade” refers to how much lithium is present in a deposit. It is usually reported in parts per million (ppm) or as lithium carbonate equivalent (LCE). A higher grade means there is more lithium per tonne of rock.
For lithium clay, grades can vary widely. Some clay deposits have grades below 1,000 ppm. Others reach several thousand ppm. The higher the grade, the more lithium metal is available to extract.
U.S. lithium clay peers usually range from 800 to 2,540 ppm Li. Some areas are lower, at 120 to 766 ppm, like American Lithium’s Tonopah claims. Others can reach 1,690 to 2,900 ppm in drilling. Common cutoffs start at 1,000–1,250 ppm for economic viability, far above the <500 ppm in some global clays like Australia’s Kaolin resources.
Grade affects several key project factors:
- Revenue potential – Higher grade means more lithium output per tonne of material moved.
- Cost efficiency – Projects with a higher grade may spend less on mining and processing per unit of lithium produced.
- Product quality – Higher-grade feedstock can result in higher‑purity lithium products, which are valuable in battery markets.
Investors and developers pay close attention to grade because it is a strong indicator of future project performance.
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Why Grade Matters More Than Ever
The global lithium market is changing fast. EV production is growing quickly. Energy storage systems are expanding. Demand for lithium is outpacing supply in many markets. This puts pressure on producers and developers to find the most competitive resources.
In this environment, grade has become a key differentiator among lithium clay projects. Several market trends explain why grade now matters more than ever:
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Rising Demand for Battery‑Grade Lithium
Battery manufacturers require consistent, high‑purity lithium feedstock. Higher-grade deposits can deliver more lithium for refining into battery materials. They can also reduce the amount of waste material that needs to be processed.
Global lithium demand is forecast to reach 2.4–3.1 Mt LCE by 2030 (from ~0.7 Mt in 2022), with batteries driving >90% growth. High-grade clays minimize waste in refining to meet this.
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Cost Pressures in Battery Supply Chains
Global competition in battery manufacturing pushes producers to lower costs. Projects with higher grades can reduce lithium production costs. This improves project economics and makes supply chains more resilient.
Higher grades cut opex by reducing tonnage processed. For instance, >3,000 ppm clays enable <US$6,000/t LCE vs. lower-grade brine equivalents >US$10,000/t.
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Shift Toward Domestic Supply Security
Countries like the United States are prioritizing domestic lithium production. This is part of a broader energy and industrial policy.
U.S. holds ~115 Mt lithium resources, per USGS 2025 data, up from 98 Mt in 2024. However, production is <1% global. IRA mandates 80% domestic or allied sourcing by 2027, favoring high-grade projects for faster permitting/offtakes.
Projects with strong grades are more likely to secure investment, permit approvals, and supply agreements. They offer clearer pathways to sustainable production.
In this landscape, projects with both good size and high grade stand out. They can produce more lithium with fewer inputs. They also attract stronger interest from investors and manufacturers looking for reliable sources of battery metals.
Nevada North: High-Grade Lithium in Action
Among lithium clay projects in the United States, Surge Battery Metals’ (TSX-V: NILI | OTCQX: NILIF) Nevada North Lithium Project (NNLP) is a standout example of why grade matters. NNLP hosts one of the highest‑grade lithium clay resources in the country. It also shows strong potential for expansion and future development.
According to the 2024 resource estimate, NNLP now has an inferred resource of 11.24 million tonnes (Mt) of LCE at an average grade of 3,010 ppm lithium using a 1,250 ppm cutoff. This represents a significant increase in both size and quality compared to earlier estimates. It also positions NNLP as one of the highest‑grade lithium clay deposits in the United States.
Within that total resource, a core portion of 7.43 Mt of LCE grades 3,843 ppm lithium at a higher cutoff level. Higher cutoffs generally indicate more concentrated lithium zones, which are especially valuable for economic studies and future mine planning.
NNLP’s strong grades have grown progressively through drilling campaigns. In 2023, early drilling returned exceptionally high lithium values, including intervals that ranged up to 8,070 ppm lithium in specific clay horizons. These high grades were encountered close to the surface, which could simplify mining logistics.
Surge recently reinforced this grade advantage with new drilling results at NNLP. The company reported a 31-meter intercept grading 4,196 ppm lithium from surface in a 640-meter step-out hole to the southeast. This intercept is nearly 40% higher than the project’s current average grade of 3,010 ppm lithium.
The 640-meter extension also confirms that high-grade mineralization continues well beyond the existing resource boundary. Near-surface grades above 4,000 ppm further support low stripping ratios and efficient future development.
Mr. Greg Reimer, CEO, President, and Director of Surge, said,
“These drill holes materially enhance the scale of the Nevada North Lithium Project. Intersecting nearly 4,200 ppm lithium in a 640‑meter step-out to the southeast in NNL‑037 is a significant achievement. Not only is the system continuous, but we are encountering some of our highest grades at the very edges of the known footprint. It is increasingly clear that we have only begun to tap the true potential size of this premier lithium asset.”
NNLP’s resource is also shallow and laterally extensive. The deposit extends over kilometers of strike and remains open for expansion in several directions. This suggests that further drilling could add more tonnes or improve the average grade even further.
These characteristics give NNLP a competitive advantage. High grades can translate into lower production costs per tonne of lithium. They can also support strong economic outcomes as the project progresses toward prefeasibility and eventual development.
Economics Speak for Itself
High lithium grades help improve the economic profile of a project. For developers like Surge Battery Metals, this means stronger project metrics in studies such as preliminary economic assessments (PEAs).
In the case of NNLP, the high-grade and large resource support robust economic results. A recent PEA shows an after‑tax net present value (NPV) of US$9.21 billion and an internal rate of return (IRR) of 22.8% at a lithium price of US$24,000 per tonne LCE. These figures reflect the project’s ability to generate strong cash flows over its lifespan.
High grade also means that a project can produce significant lithium volumes without requiring excessively large mining operations. This can reduce environmental footprint, capital cost, and permitting complexity. The Nevada North deposit’s grades help make future processing and extraction more efficient.
For investors, grade is a key signal of potential project strength. Projects with grades well above the global average often trade at premium valuations relative to peers with lower grades.
NNLP’s resource quality has attracted notable attention from analysts and market observers because it combines a strong grade with domestic location in a mining‑friendly jurisdiction.
The Strategic Edge in a Competitive Market
The lithium market will continue to evolve over the next decade. Global EV adoption and energy storage deployment are expected to drive demand for lithium to new highs. This will require reliable supply sources that can deliver consistent volume and quality.
In this context, grade will remain a core metric for comparing lithium clay projects. Deposits with higher grades are more likely to attract the capital, partnerships, and offtake agreements needed to advance through development phases. They also offer clearer economic paths compared to lower‑grade alternatives.
For Surge Battery Metals and its Nevada North Project, high grade is more than a number on a chart. It is a core advantage that differentiates NNLP from many peer projects. It supports strong resource economics, efficient processing potential, and a compelling narrative for domestic supply chain relevance in electric vehicle and battery markets.
As global competition for lithium intensifies, projects with both size and quality will stand out. NNLP’s high‑grade resource positions it as a leading example of how grade can influence outcomes in modern lithium clay development.
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