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.
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.
- The economics of advanced sediment projects demonstrate the costs to produce lithium compounds used in battery manufacture are highly competitive.
- An adequate scale potential to support a long mine life.
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.
- Executive Order ‘Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals’ signed by President Trump on 20 December 2017 makes the development of lithium projects in the U.S.A. a focus for Federal agencies.
- 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 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.
On 13 November Jindalee announced that the ETR* at McDermitt had increased to 2.2-4Bt @ 1,200-1,600ppm Li (at 1,000ppm Li cut-off)2, more than six times larger than the 2018 ETR at the same cut-off. A summary of the updated ETR* at several cut-off grades is shown in Table 1, below:
|Upper Limit (Mt)||Grade Range
|Mid-Point Contained LCE (Mt)|
Table 1 – Summary of Exploration Target Ranges at various cut-off grades, with the contained lithium carbonate equivalent (LCE) for each range calculated using the mid-point of each range
On 19 November Jindalee announced a maiden Inferred Mineral Resource of 150Mt @ 2,000ppm Li (0.43% Li2O) at 1,750ppm Li cut-off3 had been estimated at McDermitt (refer Table 2, below):
|Contained LCE (Mt)|
Table 2 – Summary of the maiden Inferred Mineral Resource
The Mineral Resource was estimated using a cut-off grade of 1,750ppm 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.
Importantly, the entire Inferred Mineral Resource sits within 100m of surface and is flat lying, both positive factors for future project economics. Furthermore, analysis of the grade tonnage distribution of the McDermitt resource model highlights the potential for additional material available at lower grades.
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.
Using the same cut-off grade as the Mineral Resource, an ETR* of 180-330Mt @ 1,800-2,200ppm Li (exclusive of the Inferred Resource) was also estimated (refer Table 3, below), with the previous ETR* updated by excluding the material now classified as Mineral Resources.
|Mineral Resource||ETR Lower Limit (Mt)||ETR Upper Limit (Mt)||ETR Grade Range (ppm Li)|
Table 3 – Summary of the maiden Inferred Mineral Resource and revised ETR at various cut-off grades, with the preferred cut-off grade figures in bold. (NB: figures may not sum precisely due to rounding, and an increased number of significant figures does not imply increased precision).
The Clayton North project is located 23km north of the only producing lithium operation in the USA at Silver Peak. Extensive areas of lithium (Li) 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.
With title to the claims now confirmed, Jindalee is working to obtain the necessary permits and approvals to allow drill testing of the project area. The proposed drilling program is 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.