Strike Resources skyrocketed on ASX amid 90% acquisition agreement in Solaroz Lithium Brine Project

SRK

Strike Resources Limited (ASX: SRK) is a mineral mining company, headquartered in Australia. It is operating several projects namely Cusco Magnetite Iron Ore Project and Apurimac Magnetite Iron Ore Project in Peru, Burke Graphite Project in Queensland, Apurimac Iron Ore Project  and several lithium exploration tenements in Western Australia. Currently the company is headed by Chairman and Managing Director, Farooq Khan.

On 13th March 2019, the company announced that it has entered into an agreement to acquire a 90% stake in Argentina based Hananta S.A. for the Solaroz Lithium Brine Project in North-West Argentina.

The Solaroz project is located in the Salar de Olaroz Basin and is spread across 12,000 hectares, mostly adjacent to and surrounded by concessions held by Orocobre Limited and Lithium Americas Corporation. It is comprised of 8 exploitation concessions in Jujuy Province in northern Argentina, approximately 230 kilometres north-west of the capital city of Jujuy. With an altitude of approximately 3,900 metres, good quality road infrastructure provides access.

The company considers the location of Solaroz to be highly strategic and potentially capable for containing higher concentrations and commercial quantities of lithium-rich brine because the company believes that aquifer which supplies the lithium-rich brine being extracted by Orocobre Limited is likely to be extended under Strike’s Solaroz Concessions. This will be concluded by drilling and geophysical work in due course of time. Upon successful completion of these tests, fast-tracking of production of lithium carbonate is to be commenced.

The company has assessed the first step in the direction of the project which is the completion of the Environmental Impact Assessment (EIA) Report which would be submitted to the local JuJuy Mining Regulator.

At the same time, the company will commence preparatory work for a detailed geophysical programme. Once the EIA report is submitted to the regulators and the company receives all the necessary approvals, then it will start its drilling programme. This drilling work will delineate the extent of potential lithium brine, its grade and related hydrological matters. This would help in identifying the potential for commercial development of Solaroz as a lithium brine project.

For this project, the company has also partnered with Hanaq Argentina S.A and will be receiving operating support and services from them to manage the Solaroz Project. Hanaq is an established explorer and experienced lithium brine developer in Argentina. The company is based in Salta, which is located 350 kilometres from Solaroz. It could be a potential offtake partner for lithium, as it has a strong establishment in Chinese battery market through one of its major Chinese shareholders which is supplying some of the world’s largest battery manufacturers with raw materials.

On the technical front, this new development made the investors go “all in”, the result of which can be seen in an astonishing surge of more than 64% in a single trading session. The price closed massively up at A$0.069 (as of 13th March 2019) compared to the previous closing of A$0.042. The YTD return of the stock is standing negative at 8.7% but today’s rally will turn into a positive return by a significant margin.


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