NickelSearch Ltd (ASX:NIS) has confirmed significant lithium content up to 5.19% within spodumene-bearing pegmatites at its Carlingup Project near Ravensthorpe in Western Australia.
The grab samples were taken from a quarry at Carlingup, where NickelSearch is collaborating with Allkem Ltd (ASX:AKE, OTC:OROCF, TSX:AKE) to advance lithium exploration.
Allkem is the owner and operator of the Mt Cattlin lithium mine, 10 kilometres from Carlingup.
This news has drawn a positive reaction from investors, with NickelSearch shares up 1.79% at $0.057 in noon trade.
What the results say
NickelSearch, accompanied by Allkem’s geology team, collected samples from stockpiles of rock material extracted from the quarry.
The precise location where the samples came from is unknown.
However, three of the samples contained pegmatites bearing coarse visible spodumene.
Assay results confirmed the high-grade lithium content of some of the pegmatite samples including:
- NSR04389 - 5.19% Li2O, 43 parts per million (ppm) tantalum (Ta), 37.8 ppm niobium (Nb), 71 ppm tin (Sn), 85.4 ppm cesium (Cs);
- NSR04388 - 4.99% Li2O, 89.6 ppm Ta, 20.6 ppm Nb, 95 ppm Sn, 581 ppm Cs;
- NSR04386 - 1.27% Li2O, 30.8 ppm Ta, 12.6 ppm Nb, 46 ppm Sn, 65.4 ppm Cs; and
- NSR04367 (repeat sample of NSR04389) - 1.92% Li2O, 242 ppm Ta, 280 ppm Nb, 52 ppm Sn, 44.1 ppm Cs.
The exploration company believes the results demonstrate the presence of a pegmatite system capable of developing lithium spodumene mineralisation, of which the scale and extent will need to be determined in due course.
Grab sample NSR04388 from pegmatite containing coarse spodumene.
Negotiations underway
NickelSearch entered the quarry under a 30-day access permit issued by Western Australian mining authorities.
The land on which the quarry is located is private but it sits within the company’s granted exploration licence 74/685.
Uner the Mining Act 1978 (WA), exploration and mining activities on EL74/685, including the first 30 meters below the natural surface of the land, are subject to consent to access and agreement to compensation for such activities being negotiated with the owners and occupiers of the land.
Three separate consent and compensation agreements are needed for EL74/685, of which two have been signed and a third is currently under negotiations.
Next up
NickelSearch is in the process of agreeing to the next steps with the operator of the quarry, and with Allkem.
Among others, negotiations for consent and compensation to the land on which the quarry is located will continue as an agreement is required before formal exploration can begin.
In the meantime, the company has obtained a new 30-day access permit to re-enter the quarry to carry out further rock-chip sampling and geological mapping.
Across the Carlingup tenements, stream sediment sampling and additional soil sampling will be carried out.
“Great start”
“NickelSearch is excited to have confirmed spodumene in pegmatites in a number of stockpiles on our Carlingup Project,” NickelSearch managing director Nicole Duncan said.
“This is a great start to testing Carlingup for lithium potential, and a strong basis on which to take forward the technical collaboration with Allkem.
“There is a lot of work ahead. The Mt Cattlin geologists continue to share their technical expertise on greenfield lithium exploration in the Ravensthorpe area.
“We have commenced discussions with the quarry operator on next steps and are aiming to be back at the quarry in the coming days to do further rock-chip sampling.”
Capital-raising
Separately, the company has received firm commitments for a share placement to raise $1.20 million at $0.045 per share, to advance its lithium exploration.
The subscription price is before costs and represents a discount of 19.6% to the company’s last closing price and a 17.4% discount to the 5-day average.
The new shares come with a free unlisted option for every one new share subscribed and is subject to shareholders’ approval.
The options will have an exercise price of $0.0675 each and will expire on October 31, 2026.
The placement was strongly supported by existing shareholders, including several high net worth, domestic and international institutional investors.
The company’s board of directors intends to seek shareholders’ approval in late November to collectively subscribe for $65,000 in the fund-raising.
Read more on Proactive Investors AU
