Q2 Metals’ (TSXV: QTWO; US-OTC: QUEXF) shares surged Monday to their highest level in more than six months on lithium drill results that are among the strongest ever reported from the company’s Cisco project in Quebec.
Hole CS25-036 cut 272.5 metres grading 1.61% lithium oxide (Li2O) from 280.7 metres depth, including 64.3 metres at 1.34% Li2O and 20 metres grading 1.56% Li2O, Q2 said Monday.
“We continue to view the assay results from Cisco as world-class,” Canaccord Genuity analyst Katie Lachapelle said in a note on Monday. “
Hole 36 “is a significant confirmation of the substantial width of the mineralized zone, especially when considered alongside intervals such as the 347 metres of continuous spodumene pegmatite in Hole 21,” Neil McCallum, Q2’s vice president of exploration, said in a release. He referred to last year’s intersection of 347 metres grading 1.35% Li2O in hole CS-24-021 at Cisco, an interval that McCallum called “an absolute mindset shift for our team.”
Prospective lithium corridor
Located in the Eeyou Istchee James Bay region, Cisco sits along the area’s southern corridor with other battery metal projects including Nemaska Lithium’s Whabouchi site, Rio Tinto’s (ASX, LSE: RIO) James Bay project and Critical Elements’ (TSXV: CRE; US-OTC: CRECF) Rose.
Based on this year’s exploration target for Cisco of about 16,167 metres across 40 holes, Q2 estimates the project’s main mineralized zone has a conceptual scale of 215 million to 329 million tonnes grading 1% to 1.38% Li2O.
Lachapelle said her valuation of Q2 is driven by Canaccord’s 207-million-tonne modeled resource for Cisco and that if Q2 delivers a resource in this range, “it would place Cisco as one of the largest spodumene deposits globally and potentially the largest in North America.”
Q2 shares gained 11.2% to $1.09 apiece at mid-Monday in Toronto, for a market value of $207.37 million. The stock has traded in a year-long range of 39¢ to $1.48. Lachapelle gives the stock a $2 price target and maintains her speculative buy rating.
Strong lithium results
Another highlight intercept, in hole CS25-038, returned 66.5 metres grading 1.55% Li2O from 222 metres depth, including 59 metres at 1.09% Li2O and 32 metres grading 1.62% Li2O.
A third hole, CS25-039, cut 108.5 metres grading 1.62% Li2O from 514.8 metres depth, including 71 metres at 1.84% Li2O and 107.4 metres grading 1.87% Li2O.
Holes CS25-038 and 39 confirmed mineralization in the southern part of the mineralized zone, Q2 said. Crews are now drilling with three rigs at Cisco and they’re expected to start drilling with a fourth at the end of October.
The exploration program’s focus is on infill-scale drilling in the main mineralized zone, in support of an initial inferred resource for Cisco in the first half of next year.
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