Resources Top 5: Lithium and more lithium as the tide turns for battery metals

S2 Resources hits high grade gold in Finland
Lithium plays Core, Argosy and Lepidico also lead the winners in early trade
‘Lithium chemical consumers are showing renewed interest in securing future supply,’ says Lepidico

Here’s your top ASX small cap resources winners in morning trade Monday, January 4.

S2 Resources (ASX:S2R) – also known as ‘the crew that unearthed the world-class Nova deposit’ — took a share price hit after drilling a December duster in the Fraser Range of WA.

The explorer has now pared much of those losses after announcing significant gold hits at its recent gold discovery in Finland.

Highlights include 8m at 4.8g/t gold, 575m from a previous high grade intercept of 6.85m at 11.8g/t gold.

If they connect up this could be a decent sized gold system.

“S2 has barely scratched the surface at Aarnivalkea after making a virgin gold discovery in 2019,” chief exec Matthew Keane says.

“The majority of holes to date have been drilled to less than 110 metres below surface on broad, 80 to 240 metre spaced section lines.

“The four deeper holes drilled in October 2020 were designed to test the depth potential of the ‘smoke’ identified in this earlier shallow reconnaissance drilling.

“The fact that two of the four holes identified high grade gold, some 575 metres apart, is highly encouraging.”

Nice recovery.

Core Lithium (ASX:CXO) has spiked +110 per cent over the past five trading days on no news (although there are rumours. DYOR pls).

The stock is now at its highest point since 2012.

Core’s main game is the Finniss lithium project in the Northern Territory, where it is aiming to announce a new resource for the grants deposit “in due course”.

That resource leads into the DFS [definitive feasibility study] update as the explorer looks to “ramp up lithium exploration and resource growth drilling in the first half of 2021”.

A DFS is a highly detailed look at whether a project is economic or not to build, and usually precedes — or runs concurrently with – crucial financing and offtake discussions.

The share price of advanced South American lithium brine play Argosy Minerals (ASX:AGY) is, like Core, up on no news.

In December, Argosy was selling a 20 tonne shipment of high quality +99.5 per cent purity lithium carbonate product to Korean chemical company Y. N Chemical Co at spot prices.

This carbonate – used to make batteries – was produced from the company’s industrial scale pilot plant at the Rincon project in Argentina.

A pilot plant is a smaller version of the real thing, designed to test whether a process works at scale.

“With recent lithium sector market interest and improving fundamentals, we are confident of a capex funding solution, and I am truly excited by the prospect of commencing construction on the ~2,000tpa [tonnes per annum] plant operation, further confirming Argosy’s status on the exclusive list of international battery quality lithium carbonate producers and exporters,” Argosy managing director Jerko Zuvela said last month.

Also up on no news was New Age Exploration (ASX:NAE) which has gold projects in the Pilbara and the South Island of New Zealand, but is also looking “to acquire new opportunities”.

Lepidico (ASX:LPD) says it is now in confidential discussions with up to six lithium consumers and three caesium/rubidium consumers.

Lepidico has been advised by one prospective customer that its analysis of a lithium hydroxide monohydrate sample provided in 2020 should be completed in early 2021, allowing offtake discussions to advance.

Offtake (purchase) deals are essential to financing a battery metals project.

Further lithium hydroxide samples will be sent to other potential customers over the coming weeks.

“Lithium chemical consumers are showing renewed interest in securing future supply of high quality, ethical product, evidenced by a number of new confidentiality arrangements entered into over the past month,” managing director Joe Walsh says.

“Offtake discussions for the high value lithium, caesium and rubidium products to be produced form Lepidico’s Phase 1 Project are expected to gain momentum in January 2021, with the continued objective of entering into binding long term supply agreements to support project financing and a final investment decision in the June 2021 quarter.”