Drilling at the Alvarrões mine in Portugal suggests that the resource could get a lot larger, lithium play Lepidico (ASX:LPD) says.

And some of the hits were very high grade, including 2.38 metres at 2.54 per cent Li2O.

Investors loved the news, sending the stock up about 11.5 per cent in morning trade.

It continues Lepidico’s golden run, with the share price now up over 80 per cent since the start of February.

Lepidico share price over the past 12 months.

The aim of the drilling was to estimate a measured and indicated mineral resource – due late March — from the current inferred resource of 1.5 million tonnes grading 1.1 per cent Li2O.

Mineral resources are categorised in order of increasing geological confidence from inferred, to indicated, to measured.

Lepidico is conducting a feasibility study for a 5000 tonne per annum Phase 1 lithium chemical plant using ore from Alvarrões.

Lepidico doesn’t actually own the mine; feed for the plant would be sourced through an agreement with owner-operator Grupo Mota.

In 2017, Lepidico entered into agreement with Grupo but a deal still hasn’t been finalised.

Lepidico says negotiations are “well advanced” in agreeing commercial terms “and under certain circumstances it is envisaged that these terms will convert to a joint venture arrangement”.

The final arrangements are expected to be finalised before the end of the financial year, the company says.