Lithium hunt heating up in Pilbara and these stocks have snagged some tenure
The Pilbara’s lithium scene is sizzling, with big finds, promising test drilling results and ambitious plans. And these ASX stocks have snagged tenements.
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The Pilbara has been heating up in recent weeks, since Wildcat Resources (ASX:WC8) got boots on the ground at its recently acquired Tabba Tabba project.
Oh, and then there’s also the fact iron ore giant FMG (ASX:FMG) has drilled out a lithium orebody right next door and has reportedly put in for a mining lease.
Iron ore miner FMG has secretly drilled out a 1km-long #lithium orebody in the Pilbara.
— Stockhead (@StockheadAU) May 24, 2023
Drilling goes right up to a boundary shared with explorer Wilcat Resources' recently acquired Tabba Tabba lithium-tantalum project. By @reubenadams6#ASX$FMG $WC8
https://t.co/kQ4x5CWIt6
WC8 is gearing up for maiden lithium drilling in July at the historical tantalum mine and lithium-tantalum project, which includes a bunch of mining leases – important if you want to get into production quickly — large areas of outcropping pegmatites, and a high-grade 318,000t at 950ppm Ta2O5 tantalum deposit.
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The project, briefly explored and mined by Pilbara Minerals (ASX:PLS) in 2015, was historically a tanty asset so assays for lithium are limited – but there are some nice hits like 8m at 1.42 per cent Li2O from 4m for WC8 to follow up.
“It’s kind of got that Mt Ida feel. We’re a lithium project on a mining lease, like Mt Ida, where Delta Lithium (ASX:DLI) is trying to get into production as quick as possible,” Wildcat executive director Matthew Banks and managing director Sam Ekins told Stockhead’s Reuben Adams.
“This is a key driver for value for us: if we find something, we get that material to market as quick as we can in this hot environment.”
Sayona, Morella have a stake next door
Right next door to Wildcat is Sayona Mining (ASX:SYA), which has Pilbara leases covering 1016sq km in the Pilgangoora lithium district.
The company also has a joint venture with Morella Mining (ASX:1MC) in the Mallina project, exploring lithium rights over six of the Pilbara tenements.
In late May, 1MC intercepted “significant” pegmatite with six out of 35 holes hosting spodumene more than 10m in width, and 18 showing visible pegmatites.
“This program has significantly enhanced Mallina’s appeal, due to the favourable thickness of the pegmatites, combined with their relatively shallow depths,” Morella MD James Brown said at the time.
Assays from the program are expected to come out before the end of June.
Two lithium giants just down the road
Wildcat’s project is also just 60km by road to Pilbara Minerals’ (ASX:PLS) Pilgangoora Lithium Mine processing plant.
PLS delivered a $1.24 billion profit and paid a ~$330 million maiden dividend for the first half of FY23 in February on the back of record lithium prices.
The company estimates between 13-21 copies of its Pilgangoora mine in WA’s Pilbara region near Port Hedland – where two consecutive expansions from 580,000tpa to 680,000tpa and then 1Mtpa have been approved – will be needed to feed long-term demand for EVs by 2040.
PLS is talking to potential JV partners to head downstream using material from the expansion of its Pilgangoora mine to 1Mtpa, a process expected to wrap around the end of the year.
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That will be on top of the 43,000tpa hydroxide plant for which PLS can option a 30 per cent stake in South Korea with POSCO, where a first 21,500t train will be operating by March next year.
Tabba Tabba is also 97km by road to the Mineral Resources’ (ASX:MIN) Wodgina Lithium Mine.
MIN Boss and billionaire Chris Ellison remains keen on the idea of establishing a downstream lithium hydroxide plant in WA, potentially co-located with the giant Wodgina mine.
But he told analysts on the miner’s half-year results call in February that government support would be needed to make investments in Australia attractive, admitting the returns promised by the fast-to-market Chinese plants outweighed concerns about investing in the communist country.
And in May, the company announced a restructure of its WA lithium JV with America’s Albemarle, which will cut its stake in the newly opened Kemerton plant from 40 per cent to 15 per cent, while it will become a producer of lithium chemicals in its own right with a 50 per cent stake in new Albemarle plants in China.
The near $1 billion investment would allow MinRes to grow its own lithium chemical lines to around 50,000tpa in the coming years.
MinRes has also received mining and environmental approvals to expand the Wodgina mine. Development work and pre-stripping of the Stage 2 cut-back recently commenced.
Mined ore feed to support the operation of three processing trains is now expected at the end of 2023 with a six to eight month ramp up.
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Which other stocks have tenements nearby?
Golden State Mining (ASX:GSM) has the Yule project in the Pilbara, which is 35km from Port Hedland and 13km from De Grey Mining’s (ASX:DEG) world-class Hemi gold discovery – and a stone’s throw from Wildcat’s Tabba Tabba project.
In late May, GSM picked up more ground next to Nomad, taking its ground position at Yule to about 766sq km.
And the company is starting high-resolution drone magnetics over the Nomad lithium prospect, with a detailed ground gravity survey is scheduled to begin at the end of June.
The aim is to better define structure and target a lithium pegmatite signature ahead of 2000m aircore and reverse-circulation drilling expected to begin in late July.
Also nearby is New Age Exploration (ASX:NAE) which, in November last year, flagged five lithium anomalies at the Bullock Well and Quartz Hill projects, none of which had been drill tested before despite being just a few kilometres from Wodgina and Pilgangoora.
This month the company announced it had found a bunch of targets at the Brahman project – also in the region – with ongoing evaluation of previous drilling and geophysical data to be conducted to precisely determine the optimal drill locations for the upcoming field season.
“We are gearing up for the upcoming drill program, which will cover all the identified high-priority drill targets in various locations across the Central Pilbara region,” executive director Joshua Wellisch said.
“This represents exciting progress as we approach the next phase of drilling, armed with an extensive array of high-priority targets throughout the region.”
This content first appeared on stockhead.com.au
At Stockhead we tell it like it is. While Golden State Mining and New Age Exploration are Stockhead advertisers, they did not sponsor this article.
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Originally published as Lithium hunt heating up in Pilbara and these stocks have snagged some tenure
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