Two weeks after Lithium Ionic (TSXV: LTH; US-OTC: LTHCF) released an initial resource for its Itinga project, the company has reported grades as high as 1.86% lithium oxide (Li2O) over 5.7 metres from recent drilling at its Bandeira property in eastern Brazil.
Highlights from the summer drilling at Bandeira, part of its flagship Itinga project include 1.74% Li2O over 6.4 metres in hole ITDD-23-112, 1.69% Li2O over 7.8 metres in hole ITDD-23-109 and 1.55% Li2O over 7.01 metres in hole ITDD-23-102, the Toronto-based company said on Tuesday.
“We continue to see strong and consistent results from Bandeira,” said Lithium Ionic CEO Blake Hylands. “Eight of the 13 drills on our properties are at Bandeira, further defining the deposit and improving drill spacing to establish a mineral reserve estimate for the definitive feasibility study targeted for completion by the end of 2023.”
The results come from the company’s ongoing 50,000-metre expansion and definition drilling program for the second half of the year on Itinga’s two main targets of Bandeira and Galvani in Minas Gerais state, about 900 km north of Rio de Janeiro. The project sits between the towns of Araçuaí and Itinga, within Brazil’s prospective “Lithium Valley,” where Companhia Brasileira de Lítio’s Cachoeira lithium mine and Sigma Lithium’s (TSXV; NASDAQ: SGML) Barreiro deposit are located. Lithium Ionic also holds the 141-sq.-km Salinas project.
The reported assays are of “exceptionally high grade,” with some of the holes exceeding the 1.41% Li2O grade of the current resource, Canaccord Genuity analyst Katie Lachapelle wrote in a research note on Tuesday.
“With an aggressive drill program underway (about 7,000 metres per month at Bandeira alone), we expect continued results of this nature to support a material upgrading of inferred resources to the measured and indicated category for inclusion in the upcoming feasibility study,” she said.
Lachapelle added that Lithium Ionic is poised to fast track Bandeira into production.
“We forecast first production of spodumene concentrate in 2027 at a low upfront capital cost of US$130 million. In our view, the current mineral resource, before further expansions, can easily support up to 200,000 (tonnes per year) of production at an operating cost of (about) US$450 per tonne (well below the current spodumene concentrate spot price of about US$4,000 per tonne),” she said.
The initial resource, announced on June 27, estimates Itinga hosts 7.6 million measured and indicated tonnes grading 1.4% Li2O, and 11.9 million inferred tonnes grading 1.44%. The resource includes the Bandeira and Galvani deposits which together cover 8.7 sq. km inside LTH’s larger land package of 141.8 sq. km. The resource was based on 181 diamond drill holes and 28,204 metres of drilling.
The holes reported on Tuesday have improved drill spacing and established continuity of mineralization between previously drilled holes.
Canaccord gives LTH a target price of $5, well above its Wednesday mid-day share price in Toronto of $2.24, for a market capitalization of $262.4 million. Its shares traded in a 52-week window of 71¢ and $3.05.
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