Sultan makes purchase to build new lithium empire in Canada’s booming Ontario battery metals district
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Small cap explorer Sultan Resources is moving into one of the world’s hottest exploration districts, becoming the latest ASX player to become an early mover in the burgeoning Canadian lithium scene.
Sultan (ASX:SLZ) has previously explored for nickel and cobalt sulphides near majors Anglo American and Gold Road Resources at Lake Grace in WA and across a suite of gold and copper tenements in central New South Wales.
But $4 million Sultan’s acquisition of two prospective Canadian lithium projects in the same ‘Goldilocks Zone’ in Ontario as $120 million capped Green Technology Metals (ASX:GT1) marks a significant new step for the emerging explorer.
In a canny move Sultan has signed a binding term sheet with XS Minerals to pick up two properties immediately adjacent to or abutting known spodumene bearing pegmatites in well-endowed lithium districts in Ontario.
They include the Kember Lake lithium project in North Western Ontario, located just 5km from known lithium resources at TSXV-listed Frontier Lithium’s PAK lithium project and Spark Lithium discovery.
Sultan is already reviewing the presence of mapped pegmatites on Kember Lake.
The Ruddy project, meanwhile, sits to the north of GT1’s large Ontario lithium holdings, with the interpreted ‘Golidilocks Zone’ of optimal formation of lithium-caesium-tantalum pegmatites passing through Sultan’s tenure.
“I believe this is a truly exciting opportunity for Sultan shareholders to have exposure to one of the most prospective lithium territories to explore globally,” Sultan chairman Jeremy King said.
“The projects are strategically located and present exceptional geology to explore for lithium.”
Sultan is highly leveraged to exploration success with an attractive purchase price for the projects.
It will issue a total of 34,905,660 shares worth $1.85m at a price of 5.3c, with $185,000 Australian cash and C$6000 going to XSM and C$120,000 to the Canadian vendors, who will retain a 1.5% new smelter royalty.
In a future production scenario Sultan would be able to buy back 0.5% of each royalties for just C$500,000 per project.
Sultan will complete a fundraising of up to $1.5m via the placement of up to 30 million shares led by Xcel Capital and ARQ Capital, which will be put towards acquisition and exploration costs ahead of maiden drilling at Kember Lake and Ruddy.
It will also use funds for follow up drilling at Kulin Hill in WA, exploration at its Lachlan Fold Belt projects in NSW, costs of the placement and working capital.
There are plenty of promising signs at Kember Lake and Ruddy already.
Kember is 180km north of the mining town of Red Lake and just kilometres from Frontier’s Spark discovery, where a recent intersection struck 398.25m in a pegmatite averaging 1.88% Li2O, including a 23.4m zone at 3.12% Li2O.
Those are massive numbers by any measure.
An N43-101 compliant inferred resource of 29Mt at a good grade of 1.57% Li2O already sits at PAK.
However over at Kember there has been no recorded exploration despite mapping by the Geological Survey of Ontario recording the presence of pegmatitic granites. Those will no doubt be followed up by Sultan’s geologists.
At Ruddy, 162km north-northeast of Dryden, Sultan will be directly abutting ground held by GT1 and sit on the northern extremity of the Allison Lake Batholith, a fertile intrusive responsible for development of proximal fractionated pegmatites.
They have the potential to host lithium, caesium and tantalum mineralisation.
According to reports from GT1, spodumene bearing Ourobororos pegmatites lie around 10km southwest of Ruddy in a similar geological setting.
This article was developed in collaboration with Sultan Resources, 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.