Jindalee Resources Exploring McDermitt Project’s Potential for US Lithium Market

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Jindalee Resources Exploring McDermitt Project’s Potential for US Lithium Market

 Jindalee Resources Exploring McDermitt Project’s Potential for US Lithium Market

Summary

  • Jindalee is in the process of developing two significant lithium sediment projects in the US - McDermitt and Clayton North.
  • The Company believes that the US is an ideal location to develop lithium projects as the nation produces just ~1.2 per cent of the world’s lithium and substantially relies on imported lithium.
  • The Company expects the demand for lithium to improve 10-fold over the next 10 years, backed by the growing demand for lithium-ion batteries in EVs.
  • The advancement of the McDermitt project is anticipated to make the US self-sufficient in lithium.
  • The drilling program at McDermitt is expected to kick-start in October; the Company has already received positive feedback from the Bureau of Land Management (BLM).

Mineral exploration firm, Jindalee Resources Limited (ASX:JRL) is in the process of developing two significant lithium sediment projects in the United States (US), including the McDermitt project and the Clayton North project. Jindalee believes that the US is an ideal location to develop lithium projects as the nation produces just ~1.2 per cent of the world’s lithium and substantially relies on imported lithium.

To Know More About Jindalee’s US Lithium Projects, Click Here

Over the past several years, lithium has been at the vanguard of numerous significant technological changes, particularly the shift towards electric vehicles (EVs). Burgeoning demand for EVs has been stimulating the demand for lithium-ion batteries across the world, primarily in countries reliant on imported lithium.

According to Jindalee, demand for lithium is likely to improve 10-fold over the next 10 years, backed by the growing demand for lithium-ion batteries in EVs. The Company is tapping this lucrative market opportunity via its high-grade McDermitt project, which has the potential to become one of the largest deposits of lithium in the US.

US Reliance on Imported Lithium

In the US, demand for lithium-ion batteries is primarily met by imported material. Nevada-based Silver Peak mine is the only operational manufacturing facility in the nation.

Source: Company's Presentation

As per Mineral Commodity Summaries released by the U.S. Geological Survey (USGS) in January 2020, the only lithium production in the US was from a brine operation in Nevada in 2019.

Majority of global lithium production came from:

  • Six mineral operations in Australia
  • Two brine operations in Argentina
  • Two brine operations in China
  • One mineral and one brine operation in China

The data released by the USGS highlighted that over 50 per cent of the estimated consumption of lithium was satisfied via imports from 2016 to 2018. However, in 2019, over 25 per cent of the estimated consumption of lithium was fulfilled via imports.

It is worth noting that the global consumption of lithium was lower than anticipated in 2019, with China withdrawing subsidies on EVs, consumers cutting lithium inventories, and lower EV sales volumes.

McDermitt Project to Make US Self-Sufficient in Lithium

Jindalee believes that the advancement of its high-grade McDermitt project can make the US self-sufficient in lithium. Stationed in southeastern Oregon, the project was pegged by the Company two years ago following a comprehensive search across the western region of the country.

Good Read: Get Acquainted with Exploration Player, Jindalee and its Robust Project Portfolio

Further exploration performed by the Company demonstrated sediments rich in lithium of a maximum thickness of 165m, exhibiting excellent continuity over kms of strike. Subsequent exploration enabled the Company to announce a significant Exploration Target Range (ETR) and maiden Inferred Mineral Resource at the project in 2019, as indicated in the below table:

Source: JRL ASX Update

Moreover, the metallurgical testwork conducted at the McDermitt project so far has been very promising, indicating:

  • Excellent results from leach recycling tests
  • Using either hydrochloric acid (HCl) or sulphuric acid (H2SO4), more than 95 per cent lithium recoveries with short residence times
  • Potential of beneficiation via attrition scrubbing leading to 55 per cent uplift of head grade
  • Potential to lower acid consumption through removal of 90 per cent of analcime and 50 per cent of carbonate
  • Considerable cost savings attained in recent tests, which are positive for project economics.

Jindalee is in the process of undertaking further metallurgical testwork at McDermitt to advance and de-risk the project. Besides, the Company has planned to conduct a 21-hole drilling campaign at the project to increase the existing ETR and Inferred Mineral Resource, and convert Inferred resources to Indicated classification, ahead of a potential Scoping Study.

The drilling program is expected to kick-start in October, for which the Company has already received positive feedback from the Bureau of Land Management (BLM).

Jindalee’s McDermitt project appears to hold considerable potential to become a long-life low-cost mining operation for lithium in the US. With Tesla underlining the potential of the McDermitt project at its Battery Day event, the project further seems to be in a good stead to become a significant source of lithium in the US market.

JRL traded at $0.600 on 6th October 2020 (AEST 03:02 PM).

Must Read: Jindalee to Raise ~$1.85Mn to Accelerate Exploration and Development at Key Projects

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