- Tesla has decided to invest in localisation of cathode supply network and manufacturing in the US at ‘Battery Day’ event.
- Tesla recognised the potential of sediment hosted lithium deposits, including the McDermitt project, in delivering a low-cost and long-life source of lithium to the US electric vehicle battery market.
- Jindalee’s McDermitt project is strategically situated with respect to Tesla’s Gigafactory.
- The Company is planning to conduct a drilling program at the McDermitt project, which is expected to commence in October, subject to final approvals.
Australian-headquartered mineral exploration company, Jindalee Resources Limited (ASX:JRL) announced that Tesla (NASDAQ:TSLA) has decided to invest in localisation of cathode supply network and manufacturing in the US. Tesla made this commitment at its ‘Battery Day’ event, held on 22 September 2020.
Following the update, Jindalee’s stock recorded its new 52-week high level of $0.85 during early trading session on 25 September 2020, marking a significant uptick of ~93 per cent. The stock last traded at $0.615. The stock has provided a sizeable return of over 112 per cent on a YTD basis.
Tesla Highlights McDermitt’s Potential
As per Jindalee, Tesla recognised the potential of US-based sediment hosted lithium deposits in delivering a low-cost and long-life source of lithium to the US electric vehicle battery market. Importantly, these deposits comprise the Company’s wholly owned McDermitt sediment hosted lithium deposit, situated in Oregon.
The McDermitt project was acquired by the Company in 2018 following a comprehensive search throughout the western US. Ensuing exploration conducted by the Company at the McDermitt project exhibited up to 165m thick lithium-rich sediments demonstrating excellent continuity over kilometres of strike. This resulted in the estimation of a significant ETR (Exploration Target Range) and maiden Inferred Mineral Resource at the project in 2019.
Jindalee’s McDermitt project is hosted in lacustrine sediments within a Miocene era volcanic crater that hosts the highest and largest grade sediment hosted lithium deposits in the United States, the McDermitt Caldera. Moreover, the McDermitt project is situated strategically with respect to Tesla’s Gigafactory.
McDermitt’s Resource and Exploration Target
Jindalee announced an Inferred Mineral Resource of 150Mt @ 2,000ppm Li (0.43% Li2O) for the McDermitt project in November 2019. The Mineral Resource was estimated utilising a cut-off grade of 1,750ppm lithium, which is considered appropriate in the context of identical projects and based on an evaluation of the prospect of future economic extraction as needed by the JORC (2012) Code.
Using the similar cut-off grade as for Mineral Resource (1,750ppm lithium), an ETR of 180-330Mt @ 1,800-2,200ppm Li was also estimated at the McDermitt Project (exclusive of the Inferred Resource). The ETR suggests that the project holds the potential to become one of the largest lithium deposits in the US.
McDermitt’s Inferred Mineral Resource exhibits two positive factors for future project economics - rests within 100m of surface and is flat lying. According to the Company, assessment of the grade tonnage distribution of the McDermitt resource model underlines the potential for further material availability at lower grades.
The metallurgical testwork undertaken at the McDermitt project till date has been very encouraging, indicating:
- high lithium recoveries from conventional HâSOâ (sulphuric acid) leaching at low atmospheric pressure and temperature and,
- the potential to beneficiate the ore to improve lithium head grade and eliminate acid consuming minerals, thus advancing project economics.
Proposed Drilling Program at McDermitt
Jindalee is planning to conduct a drilling program at the McDermitt project, which is expected to commence in October, subject to final approvals. The program encompasses 21 holes devised to increase the existing Inferred Mineral Resource and ETR, and convert Inferred resources to Indicated status, before a potential Scoping Study.
The Company has already submitted the proposed drilling program to the US-based Bureau of Land Management (BLM) for permitting. BLM personnel inspected the project in mid-September and have delivered positive feedback on both the location of the proposed holes and the Company’s rehabilitation of previous drill sites.
Jindalee’s strong project portfolio and experienced leadership team place the Company in good stead to progress with its proposed exploration activities, including the significant drilling program at the McDermitt project. Besides, Tesla’s commitment has further endorsed the huge potential of the Company’s McDermitt project, providing a strong base for project development.
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