In January 2022, Critical Resources (ASX:CRR) paid ~$3m in cash and shares, plus $3m in milestone payments for the ‘Mavis Lake’ lithium project in Canada from vendors including Essential Metals (ASX:ESS) (51% ownership).

At Mavis, historical hits included 55.25m at 1.04% lithium from 80.75m presented what the company described as “excellent potential”.

Almost immediately the company jumped into a resource drilling program which expanded, and then expanded again. Earlier this month this culminated in a tidy 8Mt resource grading 1.07%.

This makes CRR the first company in Canada to issue a maiden JORC resource in this lithium cycle, and only the third globally in the last three years.

And it’s just the start. The resource comes from just 2% of the project area.

Stockhead spoke with veteran lithium miner and CRR MD Alex Cheeseman about what comes next.


 

Give us the highlights of this maiden resource announcement.

“8Mt at 1.07% lithium; it’s all inferred and includes historical drilling from the previous owners and then our drilling from April last year to March this year,” Cheeseman says.

“The vendors had drilled about 6000m and then we drilled ~29-30,000.

“We have our April drilling data that didn’t meet the cut-off, so we are already adding tonnes into a resource upgrade.

“[The maiden resource] allows us to do some peer comparisons and objectively value the company and the project, which will show to anyone how undervalued we are right now.

“As a maiden resource it’s a solid effort but it is also a first line in the sand.

“Core Lithium’s (ASXS:CXO) maiden resource at the Finness project was 1.5Mt. Pilbara Minerals’ (ASX:PLS) maiden resource was 8.6Mt. This is a start point.

[Now it’s around 300Mt.]

“There are 400+ lithium projects in Canada at the moment but in terms of JORC compliant resources there is only a handful, and in Ontario there will now only be two – us and Green Technology Metals (ASX:GT1). That’s it.

“We are the first company in Canada to issue a maiden JORC resource in this lithium cycle, and only the third globally in the last three years.

“Delta Lithium (ASX:DLI), Latin Resources (ASX:LRS), and now us.

“We see this as an opportunity to cement our place – we aren’t just selling hopes and dreams like other exploration companies are.

“We have a resource; we build from here.”

Mavis Lake Lithium Project.

 

All drilling post-March will feed into another resource update?

“We have 8Mt and I want to double it in short order, which we will be able to achieve,” Cheeseman says.

“I would imagine February next year we would come out with a resource upgrade. Growth from there we will need to put a bit more rigour and planning into.”

 

The initial metallurgical test work on the orebody looks good.

“Yeah, solid. Really good. We did a basic series of tests to support the scoping study,” Cheeseman says.

“We achieved 87% through test work which is pretty high. The metallurgy is good, and apart from good grades we have low iron content.

“I am very comfortable having traded spodumene for some time that what we produced out of the lab was very much a premium product.”

 

It is refreshing to see companies go balls out with their drilling. ‘We have something here, let’s punch down 30,000m and get ourselves a resource’ type of thing.

“We raised money, not a lot, but it has all gone into the ground,” Cheeseman says.

“One of the benefits we have is that we are extremely low cost in terms of our overheads.

And because of the location our dollar spend on exploration really is dollars into the ground.

“We worked it out – we are sitting at about $1.02 of exploration expenditure for every tonne of resource that we have defined.

“Core just put out a corporate deck and theirs was $1.95/t, so we are happy with that.

“It’s part of our investment pitch – ‘this is what we have achieved, for this amount of money. Back us with some meaningful money and we will continue to apply that same approach’.”

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