Lithium Energy heading towards maiden JORC at Solaroz brine project; lithium lull remains

Mon 28 Nov 22, 12:18pm (AEST)
A snapshot of a brine lake containing lithium where material has been mounded into small humps on the surface of a brine system
Source: iStock

Key Points

  • Lithium Energy has two drill rigs active at the Solaroz brine project in Argentina currently completing a 10-hole program
  • Shareholders have been hot and cold with the company, but its recent report of lithium brine concentrations up to 555mg/L is keeping eyes posted
  • Once the current exploration run is complete, samples will go to a US laboratory for analysis ahead of a maiden JORC resource

As an ongoing drill run at the company’s Solaroz brine project in Argentina continues to progress, Lithium Energy Limited (ASX:LEL) has today flagged its intention to publish an upcoming maiden JORC-compliant resource for the lithium project in the coming months. 

The diamond rig exploration team at Solaroz have started drilling down the second and third holes of the 10-hole program for a total of 5,000m. Two rigs are active on-site. 

Being targeted are conductive brines present at the acreage; drillers are running up to depths of 500m in each hole. 

Back in early October, Lithium Energy investors threw dollars at the stock on the news the company had identified brines likely to contain lithium, sending the share price up 40%

That was before assays were even received. 

Past results and next steps 

At the start of November, Lithium Energy posted a 235m thick (cumulative) lithium brine intersection with lithium concentrations up to 555mg per litre. 

In the two drillholes currently being completed, Lithium Energy is confident existing geophysical data suggesting further intersections of lithium-containing brines will prove to be accurate. 

Once those are done, it will then drill another 7 holes to complete the 10-hole program. 

Flow rate, density and standard assay sampling tests will continue to be conducted throughout the current campaign; once the program is wrapped up, Lithium Energy will use the results to begin crafting a maiden JORC-compliant resource estimate for the project, enhancing bankability.

The company gives no guidance, at this time, on when to expect that document. 

Worth noting is that the Solaroz play is adjacent to acreage owned by ASX lithium heavyweight Allkem (ASX:AKE) and US-listed Lithium Americas; a company worth US$3bn. 

Lithium shine dulled somewhat

No such reaction as witnessed in early October (when shares shot up 40%) has been logged on the company's charts today, which is likely in part due to macro headwinds where perceptions of an upcoming slowdown in Chinese demand last week hit lithium stocks across the Oz bourse. 

Protests breaking out in Shanghai and Beijing will likely not do much to bolster confidence in demand from the world’s second largest economy; bearishness will likely be exacerbated if the Shanghai and Shenzhen exchanges have early-week red days in response to protests. 

Of course, lithium remains the hottest commodity of the year, and it’s likely strong results down the line will only garner interest from smallcap investors eyeing lithium stocks. 

Macquarie this month forecasted lithium supplies, globally, to remain in a deficit through the 2020s's.

In June, the Bank of America forecasted a lithium oversupply to hit in 2023.

Talk about ups and downs: Lithium Energy's six month charts
Talk about ups and downs: Lithium Energy's six month charts


Related Tags

Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

Get the latest news and insights direct to your inbox

Subscribe free