Metalicity greenlit to commence lithium exploration works at Mt. Surprise QLD play

Exploration microcap Metalicity (ASX:MCT) has commenced fieldwork at its recently purchased Mt. Surprise lithium project in QLD following approval from the state regulator, marking the commencement of exploration on-site by the company’s geotechs. 

Company shares are up 25%, but curious shareholders should note the penny stock is valued at 0.5c with today’s move. 

Rock chips from the acreage returned assay results showing lithium concentrations of up to 3.55%; firmly placing lithium mineralisation at the project as high-grade. 

Metalicity will now get boots on the ground to follow-up on areas of interest identified by QLD geological surveys which are believed to indicate the presence of pegmatite mineralisation.

Worth noting is that 3.55% rock chip samples came from granite rocks transitioning into lepidolite.

What is lepidolite? 

Lepidolite is another common source rock hosting mineralisation that is less commonly mined than its better-known counterpart, spodumene. 

Lepidolite is a common mineral which hosts lithium, but is often overlooked in favour of spodumene. 

Lepidolite refining practices to yield lithium metals are less developed than that for spodumene, and fewer companies focus on lepidolite exploration.

However, a number of companies on the ASX boast lepidolite deposits, including De Grey Mining (ASX:DEG), Lepidico (ASX:LPD), Lithium Australia (ASX:LIT) and Metals Australia (ASX:MLS).

The rock chip samples at 3.55% Lithium were collected in 2016 by the firm Monax, targeting an outcrop discovered on-site. The company notes mineralisation at Mt. Surprise is similar to that found at the Rhyolite Ridge lithium deposit in the USA. 

That deposit was managed by Paradigm Metals, a formerly ASX-listed company, which became IODM (ASX:IOD), a software company, in 2016. 

Outcrops the target for fieldwork 

Metalicity will get straight to work conducting a detailed field map of known outcrops on-site, as well as sniffing out more outcrops potentially present on-site. 

A fresh rock chip sampling run will be conducted as well as fresh sample analysis to further confirm the nature of lepidolite mineralisation on-site. The company is also hopeful it can find spodumene. 

Ultimately, the fieldwork campaign kicked off today will inform the company’s approach towards maiden drilling on-site as it seeks, in the long run, to produce the battery metal. 

Lithium futures remain up 350% year-on-year, after already rising in 2021. 

Tenure in its infancy: management

“We are excited to commence field work on grant of this project so quickly after securing this tenure,” Metalicity CEO Justin Barton said. 

“Previous assays and field work undertaken on this tenure, although in its infancy, shows encouraging signs for prospectivity with results of up to 3.5% lithium.”

Last week, Barton described Mt. Surprise as under-explored, and with previous exploration targeting gold and tin; not lithium. 

How is Metalicity doing? 

A surface look at the company’s share price performance reflects the following: 

• One week returns up 33.33% 

• One month returns up 33.33% 

• Year to date (YTD) performance down -53.85% 

• One year returns down -53.85% 

The company has a market cap of $13.8m and is ranked 621 of 912 constituents in the materials sector. 

Metalicity concluded the June quarter with $3.1m in cash; it spent $0.67m over the period. 

One big liability to account for 

Worth noting: Metalicity is currently embroiled in a lawsuit in the Supreme Court of WA relating to an acquisition of Nex Metals (ASX:NME). 

Metalicity claims Nex Metals MD Ken Allen acted on behalf of 26 Nex shareholders at recent meetings without the authority to do so.

There is a reason to perhaps wait for that lawsuit to conclude before investing in Metalicity, as the lawsuit could become quite protracted.

The company is taking star lawyer Tom Percy QC to court, the Chairman of Nex Metals. 

A look at Metalicity's one year charts