Eye on Lithium: Is sentiment finally softening? This fresh lithium IPO is down 2.5% on listing

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• Jindalee spinoff Dynamic listed today and dropped 2.5% 
• Ioneer nabs $US700m loan from the U.S. Department of Energy
• Westar to acquire Olga Rocks next door to its Parker Dome project

All your ASX lithium news for Monday, January 16.

A fresh lithium player hit the bourse today in Jindalee Resources (ASX:JRL) spinout Dynamic Metals (ASX:DYM), which IPO’d at $7m at $0.20 per share.

The company was trading down 2.5% at $0.19 per share at the time of writing, perhaps a sign that sky-high lithium sentiment really is falling to more normal levels?

DYM’s flagship project, Widgiemooltha, covers ~880km2 extending between Norseman and Kambalda. 

The region is well known for its numerous nickel and gold mines, but more recently has emerged in significance for its lithium prospectivity. 

“The fact that we had a strongly supported oversubscribed IPO even in volatile market conditions speaks volumes to the quality of our portfolio,” MD Karen Wellman says. 

“With this funding in place, Dynamic can focus on accelerating exploration across our key Widgiemooltha, Lake Percy and Deep Well projects and unlocking the value of these fantastic assets.”

RC drilling is planned at Widgiemooltha to target nickel, with regional mapping and sampling planned to generate lithium targets.

While DYM is trading down, one thing that’s holding steady (so far) is lithium prices.

They remain extraordinarily high by historical standards, upwards of US$74,000/t for both hydroxide and carbonate in China according to Fastmarkets MB, with combined CIF China, Japan and Korea prices still above US$80,000/t – after peaking around US$85,000/t last year.

And Benchmark Minerals Intelligence expect spodumene producers to renegotiate contracts at higher levels in early 2023.

Good news for miners like Pilbara Minerals (ASX:PLS) who made $8.5 million a day in the September Quarter and is expected to begin paying dividends this year thanks to its Battery Material Exchange spodumene auctions, which have fetched upwards of US$8000/t on a 6% Li2O basis.

DYM share price today:

Here’s how ASX lithium stocks were tracking today:

A total of 39 stocks were in the green, 49 were flat and 49 were red.

Who has news out today? 

IONEER (ASX:INR)

The company has scored a $US700m loan to develop its flagship Rhyolite Ridge lithium-boron project from the U.S. Department of Energy (DOE).

The proposed DOE loan — coupled with Sibanye-Stillwater’s expected equity contribution to secure a 50% interest in the project — represents “a significant step towards a complete funding package for Rhyolite Ridge,” INR says.

The Energy Department’s Jigar Shah, who heads the Agency’s Loan Programs Office, told Reuters he was “more than excited” at the prospect of helping develop the Rhyolite Ridge Lithium-Boron Project, which the Energy Department says would produce enough lithium to build 370,000 EVs every year and slash gasoline use in the states by nearly 145 million gallons per annum.

That’s circa 550,884,708.68 litres a year.

WESTAR RESOURCES (ASX:WSR)

Westar is acquiring the Olga Rocks project which is considered “highly prospective” for lithium, rare metals and gold and is conveniently adjacent to the company’s Parker Dome Project, bringing the total holdings in the region to 32.5km2. 

The Project contains numerous albite-rich pegmatites intercepted in historical drillholes which are consistent with observed outcrops and highlight the potential for up to 1km of strike length – but were never tested for lithium or rare metals.

An aggressive exploration program is planned to commence in Q2 2023. 

“This Project provides a unique opportunity to explore along strike of known gold mineralisation, in conjunction with a region of known LCT (lithium-Caesium-Tantalum) pegmatite swarms with the ability to fast track exploration,” MD Karl Jupp said.

POWER MINERALS (ASX:PNN)

Power Minerals has extended its Memorandum of Understanding (MoU) with Xiamen Xiangyu New Energy Co., Ltd (Xiamen Xiangyu) to conduct due diligence for the binding off-take, funding, logistics and offtake agreements for the company’s Salta Lithium Project, in Argentina.

Xiamen Xiangyu provides end-to-end supply chain solutions for battery metals, sourcing supply of lithium, nickel and cobalt for battery manufacturers. 

The final component of of the due diligence is the successful delivery of Preliminary Economic Assessment (PEA) at the Rincon Salar – expected to be completed H1, calendar 2023. 

“The successful completion of the Rincon PEA will be the final step in the due diligence process, and both parties are pleased to extend the MoU to allow for its completion,” MD Mena Habib said.

MAGNUM MINING (ASX:MGU)

The company has discovered a lithium geochemistry anomaly on its Buena Vista Green Pig Iron Project ground in Nevada. 

The discovery is the first non-iron mineralisation identified on the property, and provides MGU with an opportunity to capitalise on the USA’ insatiable lithium demand with prospect less than 150km from the world’s largest lithium battery factory – Tesla’s giant lithium battery gigafactory in Sparks, Nevada.

The deposit is intruded by a number of dykes and the company speculates that pegmatite dykes also occur in the area (they’re the dominant source of lithium in Australia but far less common in the USA).

Rhyolites are a more common source of lithium in the western USA and Buena Vista occurs within a volcanic package that includes this lithology – though none has been mapped in the mine area. 

The company plans to explore for both styles of mineralisation.

MIDAS MINERALS (ASX:MM1)

Midas has defined lithium and gold target zones over 20km strike at its Newington project in WA.

“Significant work completed at Newington by the company in the second half of 2022 has been successful in delineating areas most prospective for spodumene bearing LCT pegmatites,” MD Mark Calderwood said.

“From the limited RC drilling undertaken, we have an understanding of the likely orientation and mineralogical variability of the pegmatites. 

“As part of the program some promising gold (up to 7.7g/t Au) results have been received in areas which do not appear to have been drilled. 

“The next stage of exploration is to undertake further mapping and drill hole planning within the high priority target areas with a combined strike of 20km.” 

INR, WSR, PNN, MGU and MM1 share prices today:

OCEANA LITHIUM (ASX:OCN)

Oceana is planning to pick up  two advanced lithium exploration permits in the Solonópole project area in the State of Ceará, Brazil, that include multiple high-grade rock chip results across 500 metres of outcropping pegmatite, “pointing to lithium mineralisation potential of significant scale,” the company said.

The transaction consideration is $150,000 cash and 1.6m ordinary shares in Oceana, to be voluntarily escrowed for 12 months, and a further $50,000 cash and 600,000 Oceana shares subject to reaching a JORC resource milestone. 

The acquisition includes the Bom Jesus de Baixo pegmatite located on the western end of a 500m long series of pegmatite outcrops lying along the same strike. 

“If these outcrops are linked this pegmatite will be the largest known well zoned LCT (lithium-caesium-tantalum) pegmatite in the Solonópole project area known to date,” OCN says.

Planning is underway to commence drilling the Bom Jesus area along with other targets within the Solonópole project area in Q1 2023. 

AUROCH MINERALS (ASX:AOU)

The company has confirmed LCT pegmatites at its Kangaroo Hills project in WA, with a peak assay of 2.37% Li2O returned from rock chip sampling.

“The discovery of outcropping mineralised pegmatites at a different location to the earlier November 2022 discovery at the Kangaroo Hills Project is extremely exciting,” technical director Robin Cox said. 

“Just as exciting are the elevated pathfinder elements for LCT pegmatite in the weathered outcrops across the project. 

“The company now has confirmed three high priority targets that present the potential for significant strike length mineralisation and will be tested in the first phase of drilling at Kangaroo Hills”. 

The 3,000m RC program is expected to kick off later this month.

GALAN LITHIUM (ASX:GLN)

Galan has concluded a crucial long-term pumping test to support a key definitive feasibility study workstream at its flagship Hombre Muerto West lithium project in Argentina.

The second long-term test at Pata Pila resulted in an average extraction rate of 21 litres per second and lithium grades of 815mg/L to 866mg/L, confirming well-ready capacity for the 4,000 tonne per annum lithium carbonate equivalent pilot development

Additionally, the company noted that initial results at the Pucara del Salar exploration well (PS-01-22) indicates extensive fractured media with high-grade brine averaging 974mg/L.

Brine levels were constantly monitored through multiple monitoring wells, each of which was specifically designed to monitor the brine levels response of individual hydrogeological units.

All these confirmed that the project is ready to provide the brine flow and quality for the 4Ktpa LCE pilot development.

The company added that it will only need to drill another 10-12 production wells to deliver full capacity.

RIVERSGOLD (ASX:RGL)

RGL has lodged applications for eight additional tenements and acquired a granted exploration licence, covering 151.7km2 of ground in the Pilbara region of WA, which would add to the 150.4km2 in granted exploration licences the company already holds in the region, including 99km2 at the Tambourah Lithium Project.

“With recent developments including Tianqi’s $136 million bid for Essential Metals and SQM’s recent $20 million investment in Azure Minerals highlighting the growing appetite for raw materials from safe jurisdictions such as WA, we believe the strategy we are pursuing will deliver significant reward for shareholders over time,” CEO Julian Ford said.

“The Pilbara and Southern Cross – Mt Holland regions are our focus area for increasing our tenement holdings and conducting on ground exploration to move each project to drilling.”

Lithium will be the primary focus of exploration on the new Pilbara ground, although the tenements are also prospective for gold and copper mineralisation. 

OCN, AOU, GLN and RGL share prices today:

At Stockhead we tell it like it is. While Ioneer, RiversGold, Galan Lithium and Oceana Lithium are Stockhead advertisers, they did not sponsor this article.

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