Jindalee Resources (ASX: JRL) continues progress on 'globally significant' McDermitt lithium project

Highlights

• Jindalee is undertaking developments to advance its McDermitt project to commercialisation.
• The total contained LCE has increased by 62% following the 2022 drill program and holds potential to increase further.
• Jindalee has reported encouraging metallurgical results. PFS is expected to be completed by 2Q24.

Jindalee Resources Limited (ASX: JRL) is a pure play lithium company focused on progressing its Tier 1 McDermitt lithium deposit in the US. McDermitt sits ~35km from Lithium Americas’ Thacker Pass Project. McDermitt is the largest lithium deposit in the US, by contained lithium, suggests the company.

The ASX-listed company has reported significant progress at its lithium deposit amid positive sectoral outlook.  

Progress at McDermitt lithium project

The mineral resource of the ‘globally significant’ lithium deposit has been increasing after each drilling program. There has been a 62% increase in total contained LCE following the 2022 drilling campaign, and the company believes that there lies potential to increase the size of mineral resource further. Next drilling campaign is expected to start in October 2023.

The 2023 indicated and inferred resource estimate stands at 3.0 Bt at 1,340ppm Li for 21.5 Mt LCE.

The recent metallurgical results have been highly encouraging, reports JRL. The review of testwork by NYSE-listed Fluor highlighted acid leach with beneficiation as a preferred flowsheet. Testwork to optimise the flowsheet and support the pre-feasibility study (PFS) study is progressing.

Fluor has been appointed as the lead manager for the PFS, which is expected to be finalised during the June quarter of 2024.

To research the optimisation of lithium extraction at McDermitt, the company has entered into a non-binding MOU with Korean company POSCO Holdings. The testwork, which is entirely funded by POSCO, would investigate three separate metallurgical processes. After the completion of the testwork, the parties will jointly assess the commercialisation of McDermitt.

Sector receiving government support

Globally, demand for lithium is growing, dominated by the automotive industry. Albemarle (NYSE:ALB), a major lithium producer, expects a 5x increase in lithium demand by 2030, driven by growing popularity of electric vehicles and the Inflation Reduction Act (IRA).

JRL referring to Benchmark Mineral Intelligence indicates that 11.2Mt LCE per annum would be needed by 2050, compared to production of around 0.75Mt LCE in 2022.

The US government has been taking several steps to reduce the country’s reliance on foreign sources for critical minerals.  

March 2022 saw legislation introduction aiding production and processing of critical minerals for domestic manufacturing expansion and reduction of reliance on foreign sources.  

President Biden announced US$7 billion for building critical minerals supply chains and US$7.5 billion for EV chargers across the US. 

Recently, the US Department of Energy (DOE) extended support to several ASX-listed companies including Syrah Resources, Piedmont Lithium and Novonix for developing battery material projects in the US.

Amid the accelerating global lithium demand, Jindalee Resources remains focused on developing its McDermitt lithium project. The focus remains on undertaking next drilling program, building and strengthening the team, engaging with additional end users, and finalising the PFS.

JRL shares traded at AU$1.750 on 6 September 2023.