Lithium has the highest electrochemical potential of any metal, an extremely high co-efficient of thermal expansion, fluxing and catalytic characteristics, and low density. Lithium is highly sought after for a range of industrial uses, in particular energy storage where it is a vital component of most popular battery electrolytes and electrodes. A high charge and power to weight ratio makes lithium ideal for applications where weight is a significant consideration. Lithium demand is forecast to increase 10-fold over the next decade, driven largely by demand for batteries for electric vehicles and energy storage.
In June 2018 Jindalee announced the acquisition of two lithium sediment projects in the United States, at McDermitt and Clayton North. These projects are 100% wholly owned by HiTech Minerals Inc., a wholly owned, US based subsidiary of Jindalee and were generated by Jindalee after an extensive search across Nevada, Arizona and Oregon. For more detail please see our recent ASX releases here.
Jindalee was attracted to the projects by several factors:
- the mineralisation style has the potential for large scale, long life sources of lithium that sit at the lower end of the global cost curve;
- the projects are located in a mining friendly jurisdiction with significant domestic lithium demand currently satisfied by imported material; and
- there is the opportunity for Jindalee to rapidly advance the projects through the exploration stage to create significant value for the Company.
Lithium is found in pegmatites, brines and sediments. Lithium bearing sediments at Jindalee’s McDermitt Project have several positive characteristics including:
- Mineralisation is from surface, flat lying to shallowly dipping with low to non-existent stripping ratios.
- Contained within soft rocks suggesting low cost mining.
- Favourable metallurgy – initial testwork has indicated high lithium recoveries from conventional sulphuric acid leaching at low temperature and atmospheric pressure and excellent potential to beneficiate the ore.
Increasing domestic demand and energy security goals make the USA an ideal location for development of lithium projects:
- Growing local demand is currently satisfied by imported material with the Silver Peak mine owned by Albermarle Corporation (NYSE: ALB) the only operating production facility in the US.
- The USA is politically stable, with excellent infrastructure and a skilled labour force.
- US Department of the Interior report June 2018 includes lithium as critical to economic and national security.
- Bipartisan Bill ‘American Minerals Security Act’ introduced May 2019 to secure mineral resources and reduce reliance on foreign sources.
- In January 2020 the Federal Permitting Improvement Steering Committee (FPISC) added critical minerals including lithium, to the Fast-41 program which is designed to fast-track large projects considered critical to the US economy and security.
- A domestic source of lithium would not be subject to tariffs.
- 100% owned tenure, with no royalties.
The McDermitt lithium project is located in SE Oregon and was generated by the Company after an extensive search across the western US. An initial four hole drilling program completed in September 2018 intersected broad widths of sediment hosted lithium mineralisation over significant distances, resulting in the estimation of an initial Exploration Target Range (ETR) of 160-780Mt @ 1,300-1,600ppm Li at 1,000ppm Li cut-off1.
Jindalee completed nine diamond drill holes during the September 2019 quarter with all holes intersecting substantial thicknesses of lithium mineralisation over a much larger area, leading to both a significant increase in the ETR at McDermitt and estimation of a maiden Inferred Mineral Resource in November 2019. The Inferred Mineral Resource was 150Mt @ 2,000ppm Li (0.43% Li2O) at 1,750ppm Li cut-off while the ETR was calculated at 180-330Mt @ 1,800-2,200ppm Li (at 1,750ppm Li cut-off).
In late 2020 Jindalee completed 15 drillholes of a planned 21 hole program at McDermitt. The program was designed to infill and upgrade the Inferred Mineral Resource, and test for resource extensions. The program was extremely successful, with every hole intercepting significant broad zones of mineralisation including MDRC015 which was located 1.6km beyond previous drilling.
In April 2021 Jindalee announced an updated Indicated and Inferred Mineral Resource for McDermitt totalling:
1.43Bt at 1,320ppm Li for 10.1Mt LCE
The Mineral Resource was estimated using a cut-off grade of 1,000ppm Li, which is considered appropriate in the context of similar projects and based on an assessment of the likelihood of future economic extraction as required by the JORC (2012) Code. Jindalee were able to reduce the reporting cut-off as a result of positive metallurgical studies that indicated the ore was amenable to beneficiation in addition to high lithium recoveries from conventional sulphuric acid leaching at low temperature and atmospheric pressure. The Mineral Resource at various cut-off grades is included in Table 1.
The entire Indicated and Inferred Mineral Resource sits within 100m of surface and is flat lying, both positive factors for future project economics.
The Company confirms that it is not aware of any new information or data that materially affects the information included in this market announcement and that all material assumptions and technical parameters underpinning the estimates of mineral resources referenced in this market announcement continue to apply and have not materially changed.
The results from the 2021 Mineral Resource update and the material uplift in contained lithium reinforces the significance of the McDermitt project as a potential source of future supply to the rapidly growing US battery manufacturing industry. The US currently imports most of its lithium for Li-ion battery construction and Jindalee believes that McDermitt has the ability to provide a significant, long life supply of lithium for both domestic consumption and export.
The Clayton North project is located 23km north of the only producing lithium operation in the USA at Silver Peak. Extensive areas of lithium bearing claystones outcrop within the claims area, and have returned assay results of up to 930 ppm Li in sampling by the Company’s geologists. The project is ideally located in close proximity to the only lithium producing operation in the U.S.A.
Jindalee proposes to undertake drilling designed to follow up the encouraging values returned from initial surface sampling of weathered material and test for extensions to lithium mineralisation beneath the thin cover observed in the northern part of the claim area. Samples of the oxide material have also been submitted for initial metallurgical testwork to test the amenability of the lithium bearing clays to simple leaching.