Lithium Junior Drilling To Expand High Grades at Nevada Project

Source: Streetwise Reports   05/23/2023

Usha Resources Ltd., working toward delivering a National Instrument 43-101 resource estimate for its flagship Jackpot Lake lithium project in Nevada, is resuming drilling there with a more powerful rig.

Usha Resources Ltd. (USHA:TSX.V; USHAF:OTCQB) announced it is resuming drilling at its flagship Jackpot Lake lithium brine project in Nevada with a more powerful rig.

The new rig should allow Usha to expand two holes to 2,000 feet with the goal of delivering a National Instrument 43-101 resource estimate. Drilling is expected to start on or about June 1.

“By exploring to a depth of 2,000 feet, we aim to gather a more comprehensive understanding of the mineral potential within our project area, further enhancing the overall resource estimation and project feasibility of Jackpot Lake,” Usha Chief Executive Officer Deepak Varshney said.

The company hopes to expand on the 99-foot and 273-foot intervals of the holes to higher-porosity sand conglomerate zones where it believes the best potential brines are present.

Jackpot Lake is “somewhat in its own ‘world’” with a possible shallower and richer resource than other Nevada lithium projects, wrote Chris Temple, editor of The National Investor.

Last year, Usha said it saw the highest grades ever at the project, assaying 820 parts per million lithium (ppm Li) with an average of 334 ppm Li in 30 samples collected from shallow surface soils.

Jackpot Lake is “somewhat in its own ‘world’” with a possible shallower and richer resource than other Nevada lithium projects, wrote Chris Temple, editor of The National Investor.

Temple said he took another look at the project after colleagues told him “NOT to sleepwalk past this one.”

“Usha Resources Ltd. started as a Buy and is added to my list of Speculative-rated stocks,” Temple wrote. “Besides many of Usha’s unique attributes at Jackpot Lake (it has a few other exploration assets of various kinds as well), consider its share count: only 35 million shares or so outstanding, of which but a quarter or so is in the market.”

Technical analyst Clive Maund of CliveMaund.com noted that Usha has strategic properties of rich mine sites and is focused “on the development of quality battery and precious metal properties that are drill-ready with high-upside and expansion potential,” which makes it a safe bet for investors.

The Catalyst: Understanding the Lake Basin’s Resource

Usha focuses on high-grade battery and precious metal projects across North America. The company said it planned to also start surface exploration work at its six lithium pegmatite projects in Ontario, including several just added to its portfolio.

Technical analyst Clive Maund noted that Usha has strategic properties of rich mine sites and is focused “on the development of quality battery and precious metal properties that are drill-ready with high-upside and expansion potential,” which makes it a safe bet for investors.

The results from last year’s drilling at the Jackpot Lake holes, JP22-01 and JP22-02, show that the soils at the 8,714-acre project are highly enriched in lithium, the company said. The highest returns are over four times the reported historical average and compare favorably with the 100 ppm average for the Esmeralda formation, a potential source of lithium enrichment for the brines in Clayton Valley, which hosts Albemarle’s Silver Peak lithium brine mine.

“We are thrilled to announce the resumption of drilling operations using a larger drill rig,” Varshney said. “This marks an important step forward in our exploration efforts and understanding what the Jackpot Lake basin holds.”

Fieldwork Starts at Ontario Projects

The company recently added five highly prospective Ontario prospects to its roster, executing options for the right to purchase 100% interest in the Lee Lake, Mead, Bluett, Gathering Lake, and Triangle Lake sites.

Usha also has the White Willow Lithium Pegmatite project, also in Ontario, and the Lost Basin project in Arizona.

One out of five vehicles sold worldwide could be an EV in less than two years, and Ford and General Motors have set a goal of achieving 40–50% of their sales from EVs in the U.S. by 2030.

Fieldwork activities at the Ontario projects will include prospecting, mapping, and soil and visible outcrop sampling.

The primary target will be identifying targets for a fall drilling program, especially at White Willow, which Usha said hosts a lithium-cesium-tantalum system that contains coarse-grained tantalite crystallization.

That crystallization is only found in one other place in Ontario, the company said: the North Aubrey pegmatite at Green Technology Metals’ (GT1) Seymour Lake project, where GT1 has identified a 9.9-million-tonne resource at 1.04% Li2O.

“Each of these projects offers considerable exploration upside, as they are situated in highly prospective geological settings known for hosting significant lithium mineralization,” Varshey noted.

Why Lithium?

Lithium is a soft, silvery metal with highly reactive and flammable properties and is a major component of electric vehicle (EV) batteries, and, therefore, a focus of the green energy transition. It is also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.

The deficit between lithium demand and production and highly probable and probable lithium projects will be over 3.5 Mt by 2040, according to Benchmark Mineral Intelligence. [OWNERSHIP_CHART-10288]

One out of five vehicles sold worldwide could be an EV in less than two years, and Ford and General Motors have set a goal of achieving 40–50% of their sales from EVs in the U.S. by 2030. But to qualify for tax credits under new U.S. laws, a significant percentage of batteries and minerals in batteries must come from the U.S. or Canada. 

China only has less than a quarter of the world’s lithium resources but controlled about two-thirds of the world’s lithium processing and refining capacity in 2021, Rystad Energy said.

Ownership and Share Structure

Management and insiders own 13.3% of Usha Resources, including the CEO Varshney, who owns 5.04%. Director Navin Varshney owns 7.1%.

According to Reuters, 15.03% is owned by institutions and strategic investors. Out of this category, Palos Management Inc. has the most at 1.77%. 

The balance of 71.7% is held by retail investors.

Usha’s market cap is CA$12.3 million, with about 47 million shares outstanding. It trades in a 52-week range of CA$0.42 and CA$0.205.

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1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Usha Resources Ltd., a company mentioned in this article.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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( Companies Mentioned: USHA:TSX.V; USHAF:OTCQB, )