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Jindalee Resources Ltd

Jindalee Resources' US lithium strategy reaps returns

Snapshot

The McDermitt Lithium Project features a high-grade ETR of 20-80 million tonnes at 2100-2600 ppm.

Lithium on table of elements

Quick facts: Jindalee Resources Ltd

Price: $0.30

Market: ASX
Market Cap: $11.21 m
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  • McDermitt Lithium Project has an exploration target that highlights its potential to be a large US deposit
  • The company holds other ground in the US, Western Australia and Tasmania
  • Its managing director has a background at Hancock Prospecting buy-up Atlas Iron

What does Jindalee Resources do?

Jindalee Resources Limited (ASX:JRL) specialises in exploration in the US and Australia. It is run by Pip Darvall, a geologist of 32 years who has more than 12 years of experience in executive and senior roles.

Darvall was an exploration and resource geology manager at Atlas Iron Limited (ASX:AGO) before it was taken over by a subsidiary of Gina Rinehart’s Hancock Prospecting Pty Ltd, Redstone Corporation Ltd.

The managing director and CEO later became MD and chief consultant at Epi Space P/L. Darvall previously held senior geologist roles at two Atlas buy-ups, Warwick Resources Ltd (ASX:WRK) and FerrAus Ltd (ASX:FRS).

What does Jindalee Resources own?

The key assets are the McDermitt Lithium Project in the US state of Oregon and the Widgiemooltha project near gold and nickel mines in Western Australia’s Goldfields.

Jindalee’s sediment-hosted lithium project McDermitt is 25 kilometres west of McDermitt township on the Nevada-Oregon border.

The project is also about 30 kilometres from Lithium Americas Corp’s (TSE:LAC) (NYSE:LAC) Thacker Pass Lithium Project.

On Tuesday, Jindalee revealed lithium from McDermitt project had leaching recoveries of up to 97% during recent test work.

The recoveries came after a four-hole vertical diamond-drilling campaign in September 2018 where holes were drilled to about 90-metre depths to improve understanding of the thickness and grade of lithium mineralisation gained in surface sampling.

These results were used for an exploration target labelled “conservative” which highlights McDermitt project’s potential to host one of the largest lithium deposits in the US.

The lower end of the exploration target range (ETR) is 160-780 million tonnes at 1300-1600ppm lithium and this includes a high-grade ETR of 20-80 million tonnes at 2100-2600ppm.

This high-grade target is within one discrete horizon.

Jindalee has another lithium project in the US, Clayton North, and has set investment criteria for lithium projects which it sees as being met by lithium-bearing clays.

The company’s criteria includes: mineralisation from surface that is flat lying to shallowly dipping with low to non-existent stripping ratios; soft and easy to drill, with low-cost mining potential for rapid exploration progress; project economics of advanced clay projects indicating costs for lithium compound production are highly competitive; and adequate scale potential to support a long-mine life.

Clayton North is 23 kilometres north of the only active producing lithium operation in the US at Albermarle Corporation’s (NYSE:ALB) (FRA:AMC) Silver Peak in Nevada.

Silver Peak started its life as a silver mine and later became a lithium brine well field used to produce lithium carbonate.

Jindalee also holds other projects in a portfolio that takes in the US, Western Australia and Tasmania as the company explores the way forward for the secondary projects.

Widgiemooltha, near the historic mining town of Widgiemooltha in WA, lies between Kambalda and Norseman in the Goldfields-Esperance region, near pegmatite-related mineralisation prospective for lithium, caesium, tantalum and tin.

The company had $1.4 million cash at the end of 2018 and is expected to file its next quarterly report to market by the end of April 2019.

Expected spending for the March quarter of 2019 was $355,000, with $185,000 budgeted for exploration and evaluation.

Inflection points

  • Exploration successes that meet or surpass exploration targets

  • Lithium market sentiment and the importance of US-originated lithium to the nation’s critical minerals strategy

  • Lithium company maturation on the ASX

  • Key milestone events, including significant Jindalee transactions

  • Consolidation of lithium companies in the US and on the ASX

Managing director and CEO Pip Darvall sees merit in US lithium

“We were already really positive about (McDermitt Lithium Project), we released that exploration target range last year that was pretty substantial and that made us think that, ‘look, this is a great opportunity to grow the project even further’,” managing director and CEO Pip Darvall said.

“The nature of the deposit that we’re chasing is it’s a very flat lying, very continuous style of deposit that we’ve seen in the drilling so far.

“For us, it was a bit of a no-brainer to expand the scale of it through adding that ground and where we could follow the actualised mineralised units, you can see them trending onto that ground.

“It was … a simple way of expanding our footprint and giving us future options to make the deposit a lot larger.”

 

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