- Jindalee Resources Limited (ASX:JRL) appears well-positioned for growth in the coming years.
- The Company recently declared an upgraded Mineral Resource Estimate for the McDermitt project.
- Jindalee looks forward to continuing de-risking its McDermitt project through additional metallurgical studies before the planned Scoping Study.
Jindalee Resources Limited (ASX:JRL) is going from strength to strength in the lithium space via the development of its flagship McDermitt project based in Southeast Oregon, US. Jindalee owns a 100 per cent stake in the McDermitt project, which has a huge upside with indicated and inferred mineral resources already estimated for this high-value lithium project.
The Company has recently broadened its footprint at the McDermitt project, via the staking of 271 new claims that have increased the project’s size by 67 per cent. The new claims have expanded potential development options at the McDermitt project, with 88 of them situated in Nevada. The project now boasts an area of 54.6 sq. km, astride the Oregon-Nevada border.
At a time when Jindalee is actively progressing with the advancement of its McDermitt project, there are good reasons to believe that the Company is well-placed for growth in the coming years:
Largest Lithium Deposit in US
After upgrading its McDermitt resource to over 10.1 million tonnes of contained lithium carbonate equivalent (LCE), Jindalee recently confirmed that the McDermitt project is now the largest lithium deposit in the US.
The Company declared an upgraded Mineral Resource Estimate for McDermitt following the conclusion of its 15-hole drill program in 2020. The Company’s flagship project now hosts a Mineral Resource Inventory (Inferred and Indicated combined) of 1,430Mt at 1,320ppm lithium for a total of 10.1Mt LCE at a cut-off grade of 1,000ppm lithium.
Notably, the project’s Mineral Resource Inventory now exceeds Lithium Americas’ (TSX:LAC) Thacker Pass deposit that contains 8.3Mt of lithium carbonate equivalent at a cut-off grade of 2,000ppm lithium. Besides, McDermitt remains open with an Exploration Target Range or ETR between 1,300Mt to 2,300Mt at a cut-off grade of 1,100 to 1,500 ppm lithium.
Robust Financial Position
Jindalee remains well-funded with AUD 12.7 million held in cash and marketable securities as of 31 March 2021. The Company’s March 2021 quarterly report shows that its cash balance is enough to keep it going for a further 17 quarters.
The Company’s cash balance increased following a substantial capital raising worth AUD 9 million undertaken in March 2021 for the development of the McDermitt project. To raise the capital, the Company conducted a Placement of 6 million shares at an issue price of AUD 1.50 per share to professional, sophisticated, and institutional investors.
Lucrative Opportunities in Lithium Market
The growing demand for electric vehicles (EVs) and looming supply shortage of lithium are unfurling a lucrative opportunity for Jindalee in the lithium space.
As per the Company’s recently released presentation, every 1 per cent of electric vehicle penetration of the global passenger car market adds 50,000 to 70,000 tonnes of LCE demand or around 30 per cent of the existing lithium market. EV sales are expected to surpass internal-combustion-engine (ICE) vehicles by 2028.
Jindalee sees the US as an ideal location to develop lithium projects as the country depends on imported lithium, producing just 1.2 per cent of the globe’s lithium. Besides, lithium continues to garner strong government support in the US market due to its supply shortage.
The Company believes that the large sediment-hosted deposits in the US like McDermitt hold the potential to make the country self-sufficient in lithium.
Furthermore, Jindalee considers President Joe Biden’s election victory as extremely positive for the US lithium market. President Biden has pledged to attain zero carbon emissions by 2050. Besides, the Biden administration has committed to spending approximately USD 2 trillion on EV infrastructure in addition to other carbon reduction projects.
Jindalee believes its McDermitt project is well-positioned to become a low-cost, long-life mining operation for lithium in the US market. The Company looks forward to continuing de-risking its McDermitt project through additional metallurgical studies before a scheduled Scoping Study in the 2021 June quarter.
Jindalee shares traded at AUD 2.830 as on 27 May 2021.