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Here’s why shares of Jindalee Resources are on a tear today

Summary

  • The stock of Jindalee Resources Limited (ASX:JRL) is performing strongly following the release of an updated MRE for the McDermitt project.
  • At upgraded MRE, the McDermitt is the largest lithium deposit in the United States by contained lithium in Mineral Resource.
  • Jindalee will finalise the 2021 drill program based on the updated MRE.

Shares of Jindalee Resources Limited (ASX:JRL) were hovering near their 52-week high early this morning as the market cheered the release of its major announcement related to the McDermitt project. At the time of writing, the shares were trading at AUD 2.80 (as at 10:06 AM AEST) with a substantial gain of over 50 per cent.

The share price of Jindalee is trending upwards since the start of 2021. Having traded below AUD 1.00 in early 2021, the stock now trades above AUD 2.00, reflecting a significant uptick in a short span of time.

What’s Driving Jindalee’s Share Price Higher?

Jindalee has recently announced an upgraded Mineral Resource Estimate (MRE) for the McDermitt project following the completion of its 15-hole drill program late in 2020. The Company’s core project now hosts a combined Inferred and Indicated Mineral Resource Inventory of 1,430Mt at 1,320ppm lithium for a total of 10.1Mt Lithium Carbonate Equivalent (LCE) at a cut-off grade of 1,000ppm Li.

At upgraded MRE, the McDermitt is the largest lithium deposit in the United States by contained lithium in Mineral Resource. McDermitt’s Mineral Resource Inventory now surpasses Lithium Americas’ (TSX: LAC) Thacker Pass deposit, which contains 8.3Mt LCE at a cut-off grade of 2,000ppm Li.

The 2021 MRE and the material increase in contained lithium underline the significance of McDermitt as a prospective source of future supply to the fast-growing battery manufacturing industry of the US.

Related Read: Jindalee Resources widens footprint at McDermitt, set for MRE upgrade

Notably, Jindalee has received encouraging results from its metallurgical test work completed at McDermitt over the last 18 months. These results demonstrated that the ore could be beneficiated prior to leaching. On the back of these promising results, the Company has reduced the cut-off grade for reporting of the Mineral Resource from 1,750ppm in 2019 to 1,000ppm in 2021.

The reduction in the cut-off grade substantially boosts confidence in the Company’s ability to lower operating costs which has a  direct and positive effect on the reasonable possibilities for eventual economic extraction.

Interesting Read: Jindalee Resources’ (ASX:JRL) Shares Fly Post Positive Metallurgical Results from McDermitt

Moreover, Jindalee’s lithium deposit McDermitt also remains open with an ETR (Exploration Target Range) between 1,300Mt to 2,300Mt at cut-off grade of 1,100 to 1,500 ppm Li.

What to Expect from Jindalee Ahead?

The recent infill drilling has bolstered confidence in geological and grade continuity via the centre of the McDermitt deposit, enabling conversion of a portion of the current Inferred Mineral Resource to Indicated category.

Jindalee sees significant scope for resource extensions to the south and west of the Company’s new claims, along with infill drilling of the Inferred material.

Besides, the Company intends to continue de-risking McDermitt via additional metallurgical studies, targeted at the downstream processing flowsheet before a planned Scoping Study in the 2021 June quarter.

The Company will now finalise the 2021 drill program based on the updated MRE. With the drill program, it aims to infill and further update the Mineral Resource and determine the complete extent of the lithium mineralisation at McDermitt. The Company is likely to submit the applications for drill permitting in April 2021.

All in all, Jindalee remains well-funded to advance the development of its significant McDermitt project with further drilling, mining and planned metallurgical studies.

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