All You Need to Know About Jindalee Resources’ US Lithium Projects

Summary

• Jindalee expects lithium demand to rise ten-fold over the next ten years.
• The Company believes that energy security goals and growing domestic demand make the US an ideal location for development of lithium projects.
• Jindalee aims to embark on a drilling program at the McDermitt lithium project to improve the current Inferred Mineral Resource and ETR.
• As per Jindalee, McDermitt is likely to provide a substantial, long-life supply of lithium for export and domestic consumption.
• The stock of Jindalee has delivered ~52.4 per cent return on a YTD basis.

Australia-based mineral explorer, Jindalee Resources Limited (ASX:JRL) expects lithium demand to rise ten-fold over the next 10 years, driven by substantial demand for batteries used in electric vehicles. Tapping this lucrative market opportunity, Jindalee is developing two lithium sediment projects in the US, namely McDermitt and Clayton North.

In June 2018, the Company declared the acquisition of these two projects, where lithium is discovered in extensive fine-grained deposits outcropping at surface. These projects are wholly owned by Jindalee’s US-based subsidiary, HiTech Minerals Inc., and were pegged by the Company following a thorough search across Oregon, Nevada and Arizona.

Jindalee was attracted to these projects for various aspects, including:

• the projects are situated in a mining-friendly area with considerable domestic lithium demand, presently satisfied by imported material;
• the mineralisation style is prospective for long-life, large-scale sources of lithium that rest at the lower end of the global cost curve; and
• there is an opportunity to swiftly advance the projects via the exploration stage to create meaningful value for the Company.

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United States – An Ideal Location for Lithium Projects’ Development

As per Jindalee, energy security goals and growing domestic demand make the US an ideal location for development of lithium projects.

The demand for lithium for lithium-ion (Li-ion) batteries in the US is presently mostly satisfied by imported material with the Silver Peak mine, owned by NYSE-listed Albermarle Corporation, being the only operating production facility in the US.

The Company believes that the US is politically stable, with a skilled labour force and great infrastructure. Besides, lithium has become a strong area of interest for the US government over the past few years.

The U.S. Department of the Interior incorporated lithium in its list of minerals critical to the nation’s economic and national security in June 2018. Moreover, the American Minerals Security Act, formulated to secure mineral resources and decrease reliance on foreign sources, was also introduced with bipartisan support in May 2019.

Lately, in January 2020, the Federal Permitting Improvement Steering Committee (FPISC) also added critical minerals (including lithium), to the Fast-41 program, devised to accelerate large projects deemed critical to the US economy and security.

Furthermore, a domestic source of lithium in the US would not be subject to tariffs and being 100 per cent owned by Jindalee means no private royalties are payable!

McDermitt Lithium Project – Flagship Project

Located in SE Oregon, the McDermitt project is Jindalee’s flagship project, pegged by the Company post an extensive hunt across the western US.

Exploration conducted by the Company after McDermitt’s acquisition in 2018, confirmed up to 165m thick lithium-rich sediments demonstrating excellent continuity over kilometres of strike. This exploration work, comprising 13 diamond drill holes, paved the way for a substantial Exploration Target Range (ETR) and maiden Inferred Mineral Resource being declared in late-2019.

In November 2019, the Company revealed an Inferred Mineral Resource of 150Mt @ 2,000ppm Li (0.43% Li₂O) @ 1,750ppm Li cut-off at McDermitt. Importantly, the entire Inferred Mineral Resource at McDermitt is flat-lying and sits within 100m of surface, both favourable factors for future project economics.

Employing the same cut-off grade as the Mineral Resource (1,750ppm Li), an ETR of 180-330Mt @ 1,800-2,200ppm Li (excluding the Inferred Resource) was also estimated at McDermitt.

The establishment of a maiden Inferred Mineral Resource and large ETR encircling the Mineral Resource have confirmed the McDermitt project as one of the largest lithium deposits existing in the US.

Metallurgical Testwork Results

Jindalee has been undertaking additional metallurgical testwork to advance and de-risk the McDermitt project. The latest testwork has shown that beneficiation of McDermitt ore through attrition scrubbing leads to a substantial increase in head grade and decrease in carbonate and other acid consuming minerals.

The testwork has also returned lithium recoveries of over 95 per cent with short residence times, using both sulphuric acid (H₂SO₄) and hydrochloric acid (HCl). Additionally, the testwork indicated potential for a considerable reduction in the volume of material being leached, and the removal of acid-consuming minerals by applying conventional processing technologies.

The Company believes these aspects will have positive implications for both operating and capital costs for the project.

Outlook

Jindalee intends to undertake a 21-hole drilling program at McDermitt to improve the current Inferred Mineral Resource and ETR, and convert Inferred resources to Indicated status, before a potential Scoping Study. Recently, the Company has submitted an application for the proposed drilling program to the Bureau of Land Management (BLM) for permitting.

The drilling is expected to be carried out in October, contingent on permitting and availability of appropriate personnel.

Clayton North – Another US Project

Jindalee’s Clayton North project is situated just 23km to the north of ‘only lithium producing operation in the US’ at Silver Peak. Vast areas of lithium carrying sediments outcrop within the claims area and have delivered assay outcomes of up to 930 ppm Li in sampling by Jindalee’s geologists.

The Company intends to conduct drilling at Clayton North for the following purposes:

• to follow up the promising values returned from an initial surface sampling of weathered material
• to test for extensions to lithium mineralisation underneath the thin cover noted in the northern part of the claim area.

The Company has already submitted samples of the oxide material for initial metallurgical testwork to assess the amenability of the lithium-carrying clays to simple leaching.

With the US importing most of its lithium for Li-ion battery manufacturing, Jindalee expects its lithium projects (particularly McDermitt) to provide a substantial, long-life supply of lithium for export and domestic consumption.

Stock Performance: The stock of Jindalee has provided a considerable return of ~52.4 per cent on a YTD basis. The stock last traded at $0.440 on the ASX on 3^rd September 2020.