Lithium International kickstarts drilling next-door to Australia’s largest mine

Lithium Power International (ASX:LPI) has begun its 2023 drilling campaign in Greenbushes, WA, the region home to one of Australia’s largest operating lithium mines. 

The company is drilling the East Kirup prospect which is part of LPI’s own Greenbushes project (and not to be confused with the larger mine in the same region operated by Talison Lithium). 

LPI’s East Kirup is located 20km north-west of the Donnybrook Shear Zone which underpins Talison’s Greenbushes mine, the largest in Australia (in terms of physical size). 

Wet weather means no work 

The maiden drill run has one catch: it must be conducted during dry weather only, to limit the spread of dieback, a disease which wreaks havoc on WA’s native flora. 

Two drilling contractors with experience in forest areas are currently being hired by the company.

“The results of this drilling program will be used − along with previously completed environmental surveys − to prepare a CMP to allow drilling on new tracks, the commencement of phase three,” Lithium International CEO Andrew Phillips said.

“The project area is large, requiring careful analysis to identify the selected drilling targets. The intention is to hit the ground running in 2023, and we are pleased that the commencement of the program is so early in the year”.

Reverse Circulation (RC) rigs

The company will mostly use RC rigs, a standardised option for first-pass drilling operations. 

RC rigs effectively collect rock chips from underground, as opposed to Diamond-tipped Drills (DD) which return whole cylindrical cores to surface. 

One DD rig will be used to sink 400m worth of holes, a relatively small sample size. 

Undrilled acreage

The area is undrilled and so the company is keen to collect data on not only mineralisation and grades but also the groundwater level, geochemical soil data, and basic logistical information. 

“While the core focus for LPI in H2 2022 was in Chile, throughout this time the Western Lithium team was expanding and diligently working to add value to the [Greenbushes] project,” Phillips added.

“Final approvals were also granted to commence this inaugural drilling program in the Greenbushes area.”

LPI’s Greenbushes project is held by 100% owned subsidiary Western Lithium Ltd, which is to be de-merged from LPI in 1H 2023, “thereby potentially creating additional value for LPI shareholders,” according to the company. 

Considerations 

• Share price is 48.5c as at 1215PM AEST Friday 13 Jan 2023 

• Market cap of $305.1m 

• One year returns down -31.7% 

• Year to date returns up 10.2% 

• Market Index broker scan shows 4 say “Buy”, 1 says “Hold” 

• 4 week average trading volume: 1.181m shares 

• Ranked 112 of 942 companies in the Materials sector 

• The company had $26.4m in cash at end of September quarter 

• It spent $2.7m in opex during the same period

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