Anson Resources Limited’s (ASX:ASN) assay results from its Paradox Lithium Project in Utah fell short of expectations, but there could be a geological explanation.
Anson intercepted supersaturated brines in the three clastic horizons sampled during the re-entry drilling of the Gold Bar Unit 2 well.
There were high concentrations of magnesium, bromine and iodine, and it is possible that the low lithium levels indicate that samples are not from mineralisation that flows from the area around Long Canyon.
From a geological perspective, management said that this could be due to ‘cross-cutting’ which effectively forms lithium traps.
Second stage exploration to provide clearer picture
Anson has commenced the second stage of its exploration program at the Cane Creek 32-1 well that it purchased in February 2018.
This well is 5 kilometres south of Gold Bar Unit 2 and closer to the cross-cutting structures and Robert’s Rupture.
Once brine samples have been collected at Cane Creek 32-1 they will be sent for assaying and it is expected that the results will be available in April 2018.
Cane Creek could be the key
Should the concentration of lithium in the Cane Creek 32-1 brine prove to be of a higher value, a bulk sample will be assessed for the planned bench-top test work.
If this is successful, management suggested that the company remained on track to produce lithium carbonate in the second quarter of 2018.
Consequently, this morning’s sharp share price slump could suggest the selling hasn’t taken potentially positive upcoming events into account.
Anson has been heavily sold today, with more than 73 million shares sold by early afternoon.