Jindalee Resources soars on confirming 10.1 million tonnes McDermitt resource is largest lithium deposit in USA

Jindalee Resources Ltd (ASX:JRL) has skyrocketed after confirming that the upgraded resource estimate of 10.1 million tonnes at McDermitt Project on the Oregon-Nevada border is the USA’s largest lithium deposit by contained lithium.

McDermitt hosts a combined indicated and inferred mineral resource inventory of 1.43 billion tonnes at 1,320 ppm lithium for a total of 10.1 million tonnes lithium carbonate equivalent (LCE) at a cut-off grade of 1,000 ppm.

This makes it the largest lithium deposit in the United States by contained lithium in mineral resource, eclipsing Lithium Americas Corp’s (TSE:LAC) (NYSE:LAC) Thacker Pass deposit.

New record high

There has been a strong response from investors with shares up almost 56% to A$2.86 in early trade, a new record high for the company which has a market cap of approximately A$88.8 million,

Since January 11, 2021, shares have increased from A$0.775 on the back of strong news flow and improved lithium markets.

Cut-off grade reduced

The cut-off grade for the resource has reduced from 1,750 ppm in 2019 to 1,000 ppm in 2021 due to encouraging results from metallurgical test-work completed over the past 18 months, which demonstrated the ore can be beneficiated before leaching.

This significantly increases confidence in the ability to reduce operating costs which impacts directly and positively upon the reasonable prospects for eventual economic extraction.

Recent infill drilling has increased confidence in geological and grade continuity through the centre of the deposit, allowing conversion of part of the existing inferred mineral resource to indicated.

There is also scope for resource extensions to the west of the deposit and south in Jindalee’s new claims with further infill drilling planned for the inferred material.

Jindalee commissioned H&S Consultants Pty Ltd to update the resource estimate following the completion of the 2020 drill program.

Potential source for US battery industry

Results from the resource update and the material uplift in contained lithium reinforces the potential of the McDermitt project as a potential source of future supply to the rapidly growing US battery manufacturing industry.

The company is well-funded to continue advancing the development of the project with additional drilling, mining and metallurgical studies planned.

Jindalee intends to continue de-risking the project through further metallurgical studies aimed at the downstream processing flowsheet ahead of a potential scoping study in the current quarter.

The 2021 drill program will be finalised based on the updated estimate with the aim to infill and further upgrade the resource and to define the full extent of the lithium mineralisation at McDermitt.

Applications for drill permitting are expected to be submitted in April 2021.

Story by ProactiveInvestors