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Under-the-radar lithium stock Jindalee Resources is raising $5.5m to advance exploration and development at the McDermitt lithium project on the Oregon-Nevada border in the US.
In 2018, Jindalee Resources (ASX:JRL) acquired two lithium sediment projects, McDermitt and Clayton North, after an extensive search across the western United States.
A lot of work has been done since then. In late February this year an updated resource at McDermitt resulted in a combined Indicated and Inferred inventory of 3 billion tonnes at 1,340ppm Li for a total of 21.5Mt LCE.
JRL says McDermitt is now the largest lithium deposit in the US by contained lithium, with the closest analogy to the project being Lithium America’s advanced 19Mt Thacker Pass asset, 30km away and currently trading with a market capitalisation of circa $2.8 billion on the NYSE and TSX.
There are huge tailwinds for companies with projects located in the US, with the government trying to foster in-country supply of raw materials to fuel the battery revolution.
Thacker Pass has already generated US$650m in offtake funding from General Motors, and the US government (Department of Energy) has agreed to loan up to 75% of the development cost for the project.
The US government has also announced a $700 million loan to Ioneer (ASX:INR) to progress its Rhyolite Ridge Project to production.
According to financial services firm Canaccord, JRL trades on an EV/Resource of $4.50 versus Thacker Pass of $112 — a significant valuation gap.
In a bid to drive McDermitt further along the development pathway, the company is looking to raise up to $5.5m, which comprises a $2m priority offer to eligible security holders and a $3.5m public offer.
Firm commitments have already been received for the public offer with more than 150 new sophisticated, professional, and retail investors set to join the company’s share register.
The company is also seeking approval at the AGM to change its name to ‘Jindalee Lithium’.
JRL says funds will be used to advance exploration and development by further proving up resources with various activities such as PFS work, drilling and exploration, metallurgical test work, and progressing heritage and environment approvals.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions. Any documents linked or referred to in this article were not selected, modified or otherwise controlled by Stockhead. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in the documents linked or referred to in this article
Further information can be found on the website of Jindalee at at www.jindalee.net. Any queries regarding Jindalee should be directed to Jindalee and not to Stockhead.
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