Eye on Lithium: Are major miners eyeing lithium acquisitions?

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• Rio Tinto is interested in lithium projects but not at today’s prices
• Delta’s drilling makes multiple thick lithium intercepts at the Malinda prospect
• Kalamanzoo to spin-out Australian lithium assets

All your lithium news, Monday May 8.

Rio Tinto has flagged that while it is keen to add lithium projects to its portfolio, it considers their current costs to be too high.

Speaking after the company’s annual general meeting, chief executive Jakob Stausholm said it was hard to justify buying lithium assets at current high prices unless there was assurance that lithium could be sold at a high price.

He added that while the long-term outlook for long-run lithium prices remain unclear, Rio expected a shortage of the battery metal.

The mining giant noted that committed lithium supply and capacity expansions will only contribute about 15% to supply growth over the 2023-2050 period and that the other 85% has to come from new projects.

Meanwhile, Albemarle is considering other lithium acquisitions after its latest attempt to acquire tier 1 project developer Liontown Resources was rejected.

Chief financial officer Scott Tozier was reported as saying that the lithium producer is weighing up a broad range of potential acquisitions to expand capacity to meet demand for battery materials.

The company recently noted that it was open to renegotiating its Chilean contracts in return for securing more rights for additional resources.

Here’s how ASX lithium stocks are tracking:

Lithium started the week on a positive note with 63 companies making gains while another 37 were companies were essentially unchanged. The remaining 39 companies on our list were in the red.

WHO’S GOT NEWS OUT?

Here’s a selection of news out from lithium plays today.

Aurumin (ASX:AUN)

The company has secured Western Australian state government co-funding under its Exploration Incentive Scheme for drilling at the Mt Palmer lithium project.

Aurumin will receive up to 50% of the direct drilling and mobilisation costs to a cap of $150,000 for drilling of high priority lithium targets defined by geochemical anomalism and geological setting.

This covers targets identified from geochemical multielement soil anomalism with lithium results up to 146 parts per million lithium and resampled historical drill spoils returning tantalum results up to 391ppm.

While previous reverse circulation drilling intercepted multiple flat lying pegmatites, extensive pathfinder elements and low-level lithium, it was unsuccessful in drilling below about 100m due to ground conditions and water ingress.

Diamond tails by the company will be drilled vertically, to a nominal depth of 250m, to appropriately test for interpreted broad flat lying pegmatites.

Delta Lithium (ASX:DLI)

Drilling at Delta’s Yinnetharra lithium project has returned multiple thick lithium intercepts from surface at the Malinda prospect.

Notable results such as 20m at 1.29% Li2O from 28m (YRRD011), 14m at 1.38% Li2O from 128m (YRRD007) and 15m at 1.28% Li2O from 99m (YRRD009) indicate that lithium mineralisation at the prospect is consistent and predictable.

Drilling at Malinda has also discovered two further spodumene mineralised pegmatites with assays expected soon.

Adding further interest, Malinda has a very large footprint that remains largely untested.

Forrestania Resources (ASX:FRS)

Forrestania has reached an agreement to earn a 50% interest in ALX Resources’ Hydra lithium project in Quebec’s emerging James Bay Region.

Hydra covers 293km2 and consists of eight sub-projects that either overlie or are positioned on the margins of highly prospective greenstone belts.

Outcropping pegmatites have been identified at various sites across the project and there is potential to find further LCT type pegmatites and lithium resources given its proximity to recent major discoveries.

Field work is expected to begin at the end of May.

Kalamazoo Resources (ASX:KZR)

The company has entered into an agreement with TSX listed gold miner Karora Resources to pool their Australian lithium projects into a new ASX listed exploration company.

Kalamazoo’s new spin-off, Kali Metals, will have a consolidated lithium and critical minerals tenure covering about 3,833km2 in the Eastern Yilgarn and Pilbara regions of Western Australia as well as the Lachlan Fold Belt in New South Wales and Victoria.

The new company will seek to raise between $10m and $12m to fund its exploration and drilling plans across the combined Australian lithium portfolio.

Kalamazoo will own 55% of the company prior to the IPO while Karora will hold the remaining 45%.

Lithium Australia (ASX:LIT)

Lithium Australia has reached a binding agreement to divest a 70% interest in the Lepidolite Hill project to Eastern Resources (ASX:EFE) for $550,000 in three tranches.

The company will be free carried under the joint venture until a Definitive Feasibility Study has been completed.

Eastern Resources can then opt to acquire Lithium Australia’s remaining 30% interest by paying $1m in cash or shares.

Lord Resources (ASX:LRD)

Assays from first RC drilling at Lord’s Horse Rocks project have returned “encouraging” results such as 20m grading 0.11% Li2O, 1,129 parts per million caesium oxide and 337ppm tantalum as well as 6m at 0.18% Li2O.

The results indicate that the pegmatites at Horse Rocks are part of a highly fractional LCT pegmatite system and warrant further exploration and drilling.

Exploration manager Georgina Clark said the results demonstrate that the company is in the right neighbourhood for an economic lithium discovery.

“The technical team will evaluate trends observed within the fractionation ratios and look to plan follow-up work along strike and at depth in order to identify potential economic grade lithium bearing pegmatites for a Phase 2 drilling program,” she added.

“We know we are in the right rocks with the right LCT ratios to make a significant lithium discovery, the company is excited to get Phase 2 of the drilling underway.”

Loyal Lithium (ASX:LLI)

Loyal Lithium’s drilling has intersected consistent large intervals of sedimentary clays from near surface to about 170m vertical depth at its Scotty lithium project in Nevada.

Drilling to date has confirmed the company’s interpretation of a sedimentary basin in the northern region.

This interpreted sedimentary basin is beneath the strong lithium-boron soils assay results and just 1km west of Nevada Lithium’s 2022 drilling that confirmed two layers of lithium mineralisation.

Further drilling is underway as the program has only reached its halfway mark.

There is also potential for a maiden JORC resource subject to assay results.

Pursuit Minerals (ASX:PUR)

Pursuit is aiming to become a near-term lithium producer after reaching a binding agreement to acquire a lithium carbonate plant in the city of Salta, Argentina, for US$365,000.

The pilot plant has historically produced both technical grade and battery grade lithium carbonate at a run rate of 100 tonnes per annum nameplate capacity.

It will allow the company to immediately develop a chemical process pathway that is efficient and scalable for its Rio Grande Sur project.

Rio Grande Sur consists of five tenements covering a total area of 9,233 hectares.

Tyranna Resources (ASX:TYX)

Exploration at Tyranna’s Namibe project has resulted in the discovery of lithium pegmatite about 350m southeast of the Muvero prospect, which also confirms that a large mineralised system is present at Muvero.

The company has now completed drill hole mark-out for the next drilling campaign.

Additionally, it has completed in-field planning with civil engineering contractor for additional and upgraded access, preparation of drill-pads and camp site preparation.

Tyranna could also be on the verge of securing a substantial investment into the project after Sinomine Resource Group completed a project inspection as part of their due diligence.

At Stockhead we tell it like it is. While Burley Minerals and Recharge Metals are Stockhead advertisers, they did not sponsor this article.

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