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Jindalee Resources (ASX:JRL) in sweet spot with firm footing in Lithium and Gold space

  • November 12, 2020 11:45 AM AEDT
  • Team Kalkine
Jindalee Resources (ASX:JRL) in sweet spot with firm footing in Lithium and Gold space

Summary

  • Amidst the equity market resurgence from the COVID-induced March crash, gold and lithium emerged as forerunners in the financial market space.
  • Interestingly, both gold and lithium are of particular consequence to Jindalee Resources Limited (ASX:JRL).
  • Jindalee observed investors re-focusing on the potential of the battery minerals sector towards the end of FY 2020 to fuel a post-COVID economic recovery.
  • Besides, the Company believes that the outlook for gold remains positive, with no sign of monetary policy tightening in the near future.
  • Jindalee is fortunate to have exposure to both lithium and gold, with a portfolio of tenements in WA and the US, particularly the McDermitt and Widgiemooltha projects.
  • The Company believes that its strategic land packages acquired at Widgiemooltha and McDermitt hold excellent potential to generate significant value for its stakeholders.
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The unexpected onslaught of the coronavirus pandemic in Wuhan caught the world by surprise early this year. Although the health response to the pandemic was decisive across the globe, it was the fiscal and monetary response by policymakers that was probably more impressive.

With many governments injecting trillion dollars’ worth of stimulus into their respective economies, a startling bull run has been noticed in the global equity markets since the March 2020 crash.

Amidst this equity market resurgence, two themes – gold and lithium - have emerged as forerunners in the financial market space. Importantly, both these themes are of particular consequence to Australia-based resources company Jindalee Resources Limited (ASX:JRL).

Let us discuss each of these themes in some detail below:

Lithium

Jindalee believes that the destruction of global oil demand by the pandemic has catalysed the shift to green energy sources and the inevitable shortages of the raw materials that will be needed for that transition including copper, nickel and lithium.

Jindalee noted that investors were re-focusing on the potential of the battery minerals sector towards the end of the financial year 2020 to fuel a post-COVID economic recovery. While lithium prices remained subdued amidst weak demand in the EV industry, investors’ interest in lithium companies stayed very strong, especially outside North America.

The Company provides the following reasons behind this robust investor interest:

  • North American speculators’ obsession with cannabis companies, that seems to be reaching its predictable limits.
  • Positive investment climate, which indicates the worldwide focus converging towards electrification of transportation.
  • Shift in the geopolitical balance that is inducing Western countries to re-evaluate the critical role played by China in supply chains of critical materials.

To Read Jindalee’s Key Developments in Q3 2020, Click Here!

Gold

The COVID-19 era saw gold retaining and indeed strengthening its status as the safe-haven asset. The yellow metal rose to record high levels amidst the virus crisis, resulting in a new breed of Australian-focused gold majors, almost overnight.

Jindalee believes the outlook for gold remains positive, with no sign of monetary policy tightening in the near future. The Company’s optimistic projection further relies on the near-limitless appetite shown by investors for capital raisings by smaller developers and explorers.

Jindalee’s Exposure to Lithium and Gold Space

Significantly, Jindalee is fortunate to have exposure to both lithium and gold space, with a portfolio of tenements in Western Australia (WA) and the United States (US).

The Company’s two key projects – McDermitt (US) and Widgiemooltha (WA) – are prospective for lithium and gold/nickel/lithium, respectively. Moreover, the Company’s other projects comprise Clayton North in the US and Joyners, Leinster, Aries Diamond, and Prospect Ridge in Australia. These projects are prospective for a diverse range of minerals, including lithium, gold, nickel, diamonds, magnesite, and iron ore.

The Company has made significant developments at its McDermitt lithium project since the acquisition, which holds considerable potential to become a long-life source of lithium in the US market. It is worth noting that the US currently imports most of its lithium, and consequently the mineral continues to receive strong government support in the nation.

Jindalee is currently focusing on the exploration and development of its McDermitt and Widgiemooltha projects. The Company has recently raised ~$1.85 million capital through a Placement and Entitlement Offer to fund the development of these projects.

The Company intends to progress with the metallurgical testwork, drilling and resource estimation on the McDermitt project. Besides, it plans to undertake exploration activities at the Widgiemooltha project to examine nickel and gold potential.

Jindalee foresees a bright future for the resources sector, given the current favourable market conditions in the lithium and gold space. Besides, the Company believes that its strategic land packages acquired at Widgiemooltha and McDermitt hold excellent potential to generate significant value for its stakeholders.

JRL traded at $0.850 on 12 November 2020 (AEDT 11 AM).

 

 


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