Go off-road: Golden State reckons EV makers should fund the frontline of lithium exploration
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The world’s carmakers could soon fund mineral exploration efforts as they jostle for reliable supply of EV battery materials, according to Golden State Mining’s Mike Moore.
Golden State Mining (ASX:GSM) managing director Mike Moore helms a company with prospective Western Australian lithium ground in the Pilbara, at the multi-commodity flagship Yule project, and in the Murchison region at the recently acquired Payne’s Find project.
Moore has watched with interest as carmakers have jostled for lithium supply in the face of a global battery material squeeze, and recently told Stockhead he believed it was only a matter of time before automakers got involved in early-stage lithium exploration to shore up their own supply chains.
“I think the way things are playing out, it will ultimately require closer relationships between mineral explorers and material end-users like automakers,” he said.
“I think they will have to get involved at an earlier stage with companies they see as having prospective ground, and maybe even help these exploration companies do a little of the heavy lifting.
“The opportunity for exploration companies is to identify areas that have good lithium credentials. Historically we’ve seen explorers develop the fundraising model to pay for their exploration activities, with offtake partners coming in and providing finance in exchange for offtake once a bona-fide resource is in place.
“What we’re seeing now, though, is end users getting involved earlier where companies have discovered lithium.
“I think that trend is going to continue as these companies look to shore up reliable supply for themselves – companies getting involved earlier than they might have previously considered.”
It’s an interesting thought – particularly when viewed in the context of Elon Musk’s recent appeals for more people to get into the lithium business.
When it comes to lithium credentials, Golden State’s potential is well-known. The company’s underexplored flagship Yule lithium, gold and base metal project was pegged by WA exploration legend Graeme Hutton in the mid-2000s for its tantalum prospectivity – a mineral which typically presents geologically in LCT pegmatites alongside lithium.
(No prizes for guessing what the L and T stand for in LCT).
Golden State picked the project up pre-IPO in 2018 and engaged pre-eminent hardrock lithium geology expert and academic Dr Marcus Sweetapple as a consultant to guide its exploration strategy.
“What he also mentioned during that time, was if we could expand our footprint, there were certain areas he identified as being more prospective,” Moore said
“Since then, we’ve grown our footprint from what was initially 360km2 to more than 700km2 in the region.
“We’ve been very active, not only on the exploration front with drilling, but also in terms of acquiring a larger footprint in what we see is a strategic positioning in a region that’s certainly on the radar for lithium explorers and producers.”
Yule’s Target 2A is rich with LCT pegmatite pathfinders, and the company is planning to get a reverse circulation drill rig onsite in the coming months to follow up its early-stage aircore drilling.
“We plan to do a minimum of 1500m RC drilling into four areas at Target 2A,” Moore said.
“The program has already been approved and we’re really looking forward to getting out and doing that work. It’s just a case of securing a rig at this stage.
Lithium is not the only mineral on the agenda at Yule, just 13km from De Grey Mining’s (ASX:DEG) Hemi gold discovery.
The company also has several gold targets in place, while nickel has previously been found at the project’s Balla Yule prospect – an underexplored area Moore believes has mineral province potential.
In a bid to add to its established Pilbara flagship, GSM recently engaged a team of expert consultants – including the former CSIRO, and University of Western Australia adjunct research fellow, Dr Marcus Sweetapple – to work with its geology team and identify new mineral opportunities within WA.
As part of this process the company lodged applications for five tenements spanning 1200km2 near Payne’s Find in WA’s Murchison.
Two of the five tenements have already been granted at the aptly named Payne’s Find project, with early planning underway ahead of first-pass exploration work.
The project is close to known lithium pegmatite fields at Goodingnow and Mt Edon and sits in a favourable geological setting for mineralisation.
It is also 30km from Tempest Minerals’ (ASX:TEM) recent Meleya copper discovery – highlighting the region’s mineral potential.
Moore said the recent work with Dr Sweetapple was to identify projects which may have been ‘missed’ by others.
“We have built a good working relationship with Dr Sweetapple, so we engaged him to work with our geophysical consultant to identify any lithium areas that maybe had been neglected – because a lot of the low hanging fruit in terms of lithium opportunities have already been pegged,” he said.
The company is currently reviewing open-file exploration data to help generate some targets, with potential for geophysical surveying to be conducted if gaps are discovered in what’s available.
Moore said he hoped to have rigs on the ground either late this year or early next.
Combining these projects with the gold potential at Yule and the company’s Four Mile Well project; where soil sampling was recently conducted, along with a suite of other multi-commodity tenement applications lodged around WA – exposes GSM to a compelling mix of mineral prospectivity in industries old and new.
“Compared with something like gold, which we’re also very familiar with, lithium is just such a fledgling industry,” Moore said.
“I personally believe WA will become one of the major global lithium hubs in terms of exploration, extraction, value-add and processing.
“There is such a big lithium opportunity here, and through our work at Yule and in pegging Payne’s Find, we’re looking to capitalise on it.”
This article was developed in collaboration with Golden State Mining, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.