Lithium Australia buys into another WA hotspot
Lithium Australia (ASX:LIT) has continued its upstream drive – doing a deal with US Masters Holdings (ASX:USH) which sees the lithium player in the box seat at a key WA field.
The emerging lithium player told its shareholders this morning that it had managed to swing a deal with the gold and nickel explorer for lithium rights in two key tenements near Lake Johnson in WA.
While USH holds the gold and nickel rights to the tenements the deal will see it transfer lithium exploration rights to LIT in exchange for 9 million LIT shares.
In return, USH will get nickel and gold exploration rights to a tenement LIT currently has under application in the area in exchange for 3 million USH shares – when the permit is granted by the WA government.
Back in May, listed exploration player Poseidon Nickel (ASX:POS) announced that sampling from lithium pegmatites close to the border of the USH permits had brought up high lithium grades.
The samples are interpreted as extending northeast into one of the USH permits.
The deal effectively gives LIT a foothold in another emerging WA lithium hotspot, and managing director Adrian Griffin said it put the company in “the box seat”.
“Lake Johnson is a significant addition to LIT’s Yilgarn asset base, and the deal with USH puts us in the box seat in the area,” he said.
“While previous exploration ignored the lithium potential of the pegmatites, recent exploration has demonstrated conclusively the prospectivity of the area.
“It’s a great deal for LIT and USH.”
Recently it announced plans to drill up to 35 holes in an area subject of a $700 million merger between Galaxy Resources (ASX:GXY) and General Mining Corp (ASX:GMM) – at Ravensthorpe which is south of the Lake Johnson plan.
The first drill target for LIT is just 18km away from the Mount Cattlin mine, and includes the Horseshoe prospect.
LIT has been increasingly active on the upstream side of the business – having reinforced its position in several promising areas including Mexico and Greenbushes, the latter the site of the world’s largest supply of lithium.
About LIT and Sileach
While LIT remains active in the upstream, it’s downstream where it hopes to truly makes its mark.
It is working to prove up its ‘Sileach’ process – a way of processing lower-grade silicate deposits normally considered sub-economic.
The Sileach process involves grounding the test ore, digesting it in sulphuric acid, removing impurities and then extracting the lithium carbonate.
If LIT is able to prove up the technology, then it could open up a raft of resource which were previously considered too poor to mine.
When the experts at Next Investors have a stock pick, it may pay to listen.
The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.
They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.
Click the link below to see what they are currently investing in.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.