Summary
- Jindalee Resources Limited (ASX:JRL) is expected to release initial assay results from the McDermitt drilling program and findings from metallurgical testwork shortly.
- The Company is undertaking discussions with several North American groups for the potential listing of its US lithium assets.
- McDermitt is ideally positioned to emerge as a future source of lithium for existing and proposed battery factory developments in the US.
Australian exploration company Jindalee Resources Limited (ASX:JRL) has released an update regarding its advanced McDermitt Lithium Project based in the US.
Jindalee informed that initial assay results from the McDermitt drilling program and findings from metallurgical testwork are due in late-January 2021. Additionally, the Company notified that it is exploring options for the listing of its lithium assets on a North American exchange.
Following the update, Jindalee shares marked an uptick of ~5 per cent to $1.05 during early trading session.
Jindalee possesses a robust and diverse project portfolio in the US, comprising the McDermitt and Clayton North projects. With the US being heavily reliant on imported lithium to meet its burgeoning demand, the Company is developing the McDermitt project that can make the nation self-reliant in lithium.
Must Read: Why Jindalee Resources’ (ASX:JRL) Shares Skyrocketed in 2020?
Initial Assays from Drill Program Expected Shortly
With about 70 per cent of the McDermitt drill program already completed, Jindalee anticipates receiving initial assay results later during this month. The Company has completed 15 holes of the 21-hole proposed program, with the drilling intersecting up to 185 metres of true thickness of the target sediments housing the lithium mineralisation at the McDermitt project.
Notably, the samples from the drill program have been submitted for analysis. The Company believes that the density of the completed holes is likely to be sufficient to achieve most of the original goals of the drill program.
Metallurgical Testwork Results in the Offing
Metallurgical testwork outcomes released so far by Jindalee have been very promising. The results indicated high lithium recoveries from conventional H2SO4 leaching at low temperature as well as atmospheric pressure.
In mid-August 2020, the Company announced that beneficiation of McDermitt ore through attrition scrubbing at 20 per cent solids resulted in:
- a rise in the lithium content in the <0.01mm fraction by over 50 per cent from 0.22 per cent to 0.34 per cent,
- a fall in the carbonate from 6.3 per cent to 3 per cent, and
- a removal of about 90 per cent of the analcime.
Jindalee advised that additional testwork designed to quantify the leaching characteristics of the beneficiated ore is at an advanced stage. The Company expects to receive the first results later this month.
Discussions Underway for North American Listing of Lithium Assets
Interestingly, the valuations of Jindalee’s TSX-listed peer companies have improved sharply over the last six months.
The appreciation in their valuations has prompted the Company to carry out discussions with several North American groups interested in potential transactions that could lead to a listing of Jindalee’s US lithium assets on a North American exchange. However, these discussions are still in the preliminary stage.
Developments Ruling in Favour of McDermitt Project
Some recent developments in the US market have been ruling in favour of Jindalee’s McDermitt project.
US automaker Tesla, Inc.’s commitment to invest in the localisation of its cathode supply chain and production in the US has underlined the strategic importance of existing sediment-hosted lithium deposits like McDermitt. With Tesla becoming the first automotive OEM to participate in lithium production, other US automakers may also replicate this move to secure greater control over the distribution chain for minerals critical for the production of EVs.
Related Read: Tesla Underlines Potential of Jindalee’s McDermitt Lithium Project, JRL Stock Records Fresh 52-Week High
Moreover, Albemarle’s (NYSE:ALB) latest decision to initiate a program evaluating clay extraction technology and sediment (clay) hosted lithium resources has emerged as a welcome development for McDermitt.
In addition to these developments, US President-elect Joe Biden’s upcoming inauguration has turned investors’ attention towards his election commitment of attaining net-zero carbon emissions by 2050 in the US. The transition to a clean energy future is expected to have positive implications on the development of US-based strategic lithium projects like McDermitt.
In a nutshell, Jindalee’s McDermitt project is advancing at a brisk pace, with the drill program and metallurgical results expected to add more bling to the project. Furthermore, the Company believes that McDermitt is well-positioned to emerge as a future source of lithium for proposed or ongoing battery factory developments in the US.
