- Jindalee Resources Limited (ASX:JRL) is making fast-paced progress at the McDermitt lithium project.
- McDermitt holds significant indicated and inferred mineral resource with huge upside.
- The high-grade McDermitt project holds the potential to materially shift US lithium supply dynamics.
Mineral exploration company Jindalee Resources Limited (ASX:JRL) is leaving no stone unturned to advance the development of its high-value lithium project in the US – the McDermitt project. Jindalee owns a 100% interest in the McDermitt project, which holds a huge upside with inferred and indicated mineral resources already estimated for this crucial lithium project.
The project is located in Malheur County and situated on the Oregon-Nevada border, about 35km west of the town of McDermitt at the northern end of the McDermitt volcanic caldera. Moreover, McDermitt boasts an area of 54.6 sq. km and is considered as one of the largest lithium deposits in the US, with inferred and indicated mineral resource of 1.43 Bt @ 1,320ppm Li (1,000ppm Li cut-off).
In this article, let us discuss some factors highlighting the significance of the McDermitt project. These factors seem to be shaping a positive growth trajectory for Jindalee in the coming years.
1. Excellent results from 2021 drill program
Jindalee has achieved excellent results from all holes drilled at McDermitt in late 2021. A total of 12 holes were drilled from an approved 39-hole program last year. The assay results received from these holes have highlighted multiple significant intercepts of lithium mineralisation over broad widths, as shown in the figure below:
The drilling at McDermitt has confirmed significant mineralisation near surface, with excellent grade continuity and over large thicknesses. The drilled holes have also encountered multiple higher-grade zones (>3000ppm lithium) within the Mineral Resource, highlighting the potential scalability of the project.
Jindalee will use the drill data to update the Mineral Resource Estimate (MRE), which is likely to be completed in the June quarter. The Company already holds drill permits for the next phase of drilling in 2022, the major of which is planned to be reverse circulation (RC). The RC drilling is expected to commence in the September quarter, in accordance with permitting conditions.
2. Strong US Government support
Jindalee is encouraged by the US government’s constant support for domestic production of critical minerals (including lithium) to reduce the current dependence of the country on foreign sources of these minerals. The Company believes that this support could have positive implications for the development of McDermitt.
In late March 2022, President Biden invoked the Defense Production Act and gave the Department of Defense (DoD) the authority to boost domestic mining and processing of critical materials for the large-capacity battery supply chain. The Defense Production Act allows the President to use emergency authority to prioritise the development of certain materials for national production.
The location of the McDermitt project to the US battery market is a major boost and is anticipated to assist with all aspects of project development, including permitting, studies, contracting and financing.
3. Solid market dynamics
As electric vehicles aggressively drive the need for lithium, there is a looming supply shortage for the commodity. The ongoing supply scarcity and robust demand for electric vehicles are unfurling a lucrative opportunity for Jindalee in the lithium space.
The Company sees the US as an ideal location to advance lithium projects as the nation relies on imported lithium and produces just about 1.2% of the world’s lithium. As per the US government’s Mineral Commodity Summaries 2022, the only lithium production in the United States was from one brine operation in Nevada.
Jindalee believes that McDermitt has the potential to materially change US lithium supply dynamics, with close proximity to major lithium customers. Importantly, the Company has recently announced its repositioning as a pure-play, US lithium developer focusing on the McDermitt project.
Jindalee shares closed the trading session at A$3.54, with a rise of over 10% on 30 May 2022.