Lithium bound Ardiden looks to test its mettle
Ardiden Limited (ASX:ADV), the junior graphite explorer who just last month ventured into the lithium space, has announced it will commence diamond core drilling on its Seymour Lake Project immediately.
The Seymour Lake Project is located near the town of Armstrong in Ontario, less than 4 hours from a key infrastructure hub at Thunder Bay and within 100km from the US border. The lithium-beryllium-tantalum project comprises five patented mining claims covering an area of 912 hectares.
In an ASX market update, ADV says it received drilling approvals from local Canadian authorities and has already selected a local drilling contractor to commence “in the coming week”.
ADV has planned diamond core drilling as part of an initial due diligence program to confirm encouraging historical lithium drill results at Seymour Lake. Significant historical lithium intersections include 2.21% Li2O over 5.70m, 2.39% Li2O over 9.20m and 2.081% Li2O over 16.90m.
Additionally, ADV hopes to generate cash flow from sales of other minerals found alongside lithium exploration. Tantalum and beryllium grades of up to 1180ppm (Ta2O5) and 1270ppm (BeO) respectively, were intersected in the past, which could provide ADV with by-product credits currently worth around US$500 per kg.
ADV says that the upcoming drill program “will also help to define the boundaries of the main outcropping spodumene-bearing pegmatite structures which host the lithium mineralisation at the Project”.
With over 4,000m of historical diamond drilling, the Seymour Lake Project hosts lithium-beryllium-tantalum mineralisation within the Caribou Lake Greenstone Belt, 230km north-north-east of the mining centre of Thunder Bay in Ontario.
The project has strong potential to produce a high quality lithium product to service growing North American demand and export markets.
Combined with the historical data, the results of the upcoming drilling and exploration program will enable Ardiden to make a detailed assessment about the potential of the Seymour Lake Lithium Project before considering whether to exercise its option to purchase the project.
If ADV finds sufficient commercial potential at Seymour Lake, it will likely pay around C$1,000,000 to claim full ownership.
Seymour Lake acquisition terms
- ADV has paid a C$75,000 exclusivity payment to commence a 150-day option and due diligence period
- ADV to pay a further C$75,000 in cash and C$250,000 in ADV shares at the end of due diligence
- If ADV wants to pursue the project post-option period, the company must pay C$25,000 per quarter
- A further C$250,000 in ADV shares to be paid at the completion of the option period for a total compensation of C$1,000,000 for 100% ownership of Seymour Lake
- ADV withholds the right to accelerate or withdraw from the option at any time.
The reasoning behind venturing in lithium exploration is because ADV is aiming to supply the growing market for lithium-ion batteries that require large amounts of both graphite and lithium. With its Manitouwadge graphite project progressing on schedule, ADV hopes to progress a lithium project in tandem, therefore capturing the entire value chain in supplying battery manufacturers.
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