Published On: May 3rd, 2023
Table of Contents
Jindalee Resources Projects – Lithium projects
The McDermitt Lithium Project, 100% owned by the Company, is currently recognised as the largest lithium deposit in the United States (by contained lithium). In June 2018, Jindalee publicly announced the acquisition of two lithium sediment projects, McDermitt and Clayton North, in the United States via HiTech Minerals Inc (a US-based subsidiary of Jindalee Resources).
About the McDermitt Lithium Project
The McDermitt Lithium Project is in Malheur County, South-East Oregon, United States. Following an initial four-hole drilling program that concluded in September 2018, the McDermitt Lithium Project exhibited extensive sediment-hosted lithium mineralisation across considerable distances. This discovery emphasised the Project’s potential to host a substantial lithium resource. The Project spans an area of approximately 54.6 square kilometres, encompassing the potential for further mineralisation and development.
Progress in the McDermitt Lithium Project
The McDermitt Lithium Project has undergone extensive exploration, with 62 drill holes (consisting of 33 reverse circulation (RC) and 29 diamond holes) completed. The current Indicated and Inferred Mineral Resource for the McDermitt Lithium Project stands at 3.0 billion tonnes, containing lithium at a concentration of 1,340 parts per million (ppm) Li (with a cut-off grade of 1,000 ppm Li). This equates to a total Lithium Carbonate Equivalent (LCE) of 21.5 million tonnes.
During the second half of 2022, 21 holes were drilled at the McDermitt site to enhance the Mineral Resource Estimate (MRE). The drilling results were encouraging, as most holes revealed significant lithium mineralisation widths at shallow depths.
The resources at McDermitt experienced remarkable expansion between 2022 and 2023. During this period, the total contained LCE surged 62% from 13.3 million tonnes to 21.5 million tonnes, compared to a 131% rise in Indicated LCE from 4.8 million tonnes to 11.1 million tonnes. As of 2023, the Indicated LCE is 52% of the total LCE, up from 36% in 2022.
Attractiveness of Jindalee Resources Projects:
The Li demand is set to skyrocket with increasing Electric Vehicle (EV) penetration. Passenger EV registration increased 42% Y-o-Y between H1 2021 to H2 2022. IEA predicts that 14 million EVs will be sold in 2023.
The Company’s projects are located near end users – US-based battery manufacturers.
Jindalee is in a sweet spot to reap benefits from the focus of the US govt on the security of critical minerals such as:
- Spending on building EV infrastructure in the US (US$7.5 billion) announced by President Joe Biden in June 2022
- Followed by Inflation Reduction Act in August 2022, which focuses on carbon emission, domestic sourcing of critical minerals and Tax credits for miners of critical minerals for EV manufacturing
- US DOE also provided loan benefits for a Li project and financed its downstream operations on-site
McDermitt is expected to be a low-cost mining operation due to flat-lying sediment with a low stripping ratio, low operating expenses due to the soft ore body, and test results showing high metallurgical recoveries.
MOU between Jindalee Resources and POSCO Holdings
Jindalee Resources entered into a non-binding Memorandum of Understanding (MOU) with POSCO Holdings for joint research on lithium extraction from the McDermitt Project. The MOU aims to facilitate collaborative research to optimise the economic extraction of lithium at the McDermitt Lithium Project. POSCO Holdings is a leading Korean steel producer with an increasing presence in Critical and Battery mineral space (lithium and nickel).
Under the agreement, POSCO will provide funding for the test work on a composite sample of McDermitt ore. In 2022, POSCO conducted an initial analysis on a smaller sample. The upcoming test will investigate three distinct metallurgical processes for extracting lithium from the McDermitt ore. The testing is anticipated to take approximately six months and will cost around A$ 2 million. POSCO will bear the entire cost under the agreement.
Post completion of the test work, POSCO and Jindalee will jointly evaluate the commercial potential of the McDermitt Lithium Project. This collaboration highlights the interest of POSCO in exploring opportunities for lithium extraction and the potential commercialisation of McDermitt’s resources. POSCO is a leader in lithium and nickel production capacity and has deployed advanced eco-friendly lithium extraction technology (research underway).
Milestones and Upcoming Activities
The Company outlined some critical milestones and activities in its upcoming endeavours. Some of the milestones are:
- Announced significant updates to the Major Mineral Resources in February 2023
- The Company signed an MOU with POSCO Holdings in February 2023. Additionally, the Company continuously discusses and collaborates with other end users and strategic partners in the United States
- Fluor (a leading EPC player), in its review, recommends acid leaching with a beneficiation flowsheet for the McDermitt Lithium Project. Optimisation of the flowsheet is ongoing
- The Exploration Plan of Operations (EPO) was lodged in mid-January 2023
- The initiation of a significant drilling program is scheduled to begin in the September quarter of 2023, subject to the approval of the Exploration Plan of Operations (EPO)
- The Company focuses on building a solid, experienced team for US and board-level ground operations
Jindalee Resources Executive Director and CEO: Lindsay Dudfield
Figure 5: Mr Lindsay Dudfield
Jindalee Resources’ Executive Director and CEO, Mr Lindsay Dudfield, is a dynamic and experienced geologist who has worked in successful multi-commodity exploration projects for over 40 years, mainly in Australia. He has served in senior positions in the mineral divisions of companies like Amoco and Exxon and was actively engaged in identifying the Scuddles zinc copper mine at Golden Grove, Western Australia.
- Jindalee Resources holds the largest Li deposits in the US and is set to hugely benefit from govt policies and funding towards securing critical minerals domestically
- Jindalee Resources has already signed an MOU with POSCO Holdings, which further strengthens its position in Li minerals and its importance for the US
- Jindalee is highly undervalued as compared to other Li mining projects in the US, such as Clayton Valley, Thacker Pass, and Tonopah, despite having much larger lithium resources at similar concentrations
- Jindalee Resources’ share price stood at A$ 2.13 per share, and the stock volume (4-week average) was 15,399 as of May 2nd, 2023
- The market capitalisation of the Company was A$ 122.22 million as of May 2nd, 2023
- As of May 2nd, 2023, the Company has 57.4 million shares on issue.
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