Liontown Resources (ASX: LTR) has unearthed “significant” lithium mineralisation within the first two holes of its maiden exploration campaign at its Buldania project in Western Australia’s eastern goldfields and in proximity to lithium deposits Mt Marion and Bald Hill.
The maiden program has returned near-surface intersections of 16m grading 1.2% lithium from 28m. with a 2m interval containing 1.7% lithium and further higher-grade intervals including 3m at 1.8% lithium and 1m at 3.4% lithium.
A second drill hole hit 12m grading 1.2% lithium with a 7m interval containing 1.7% lithium.
According to Liontown, the lithium is associated with spodumene mineralisation which is easier to mine and process compared to other types of lithium mineralisation.
Liontown claims the initial results were “highly encouraging” and indicated the potential for the project to host thick and high-grade lithium mineralisation within multiple pegmatites.
The drilling program is currently testing targets were rock chip sampling returned up to 4.6% lithium.
Liontown reported the rock chip results in late October last year with other high grade lithium assays including 2.7%, 2.8%, 3.5% and 4.2%.
These assays were announced less than a week after Liontown secured the metal rights to Buldania from Westgold Resources’ (ASX: WGX) subsidiary Avoca Resources.
Under the agreement with Avoca, Liontown is to fork out A$100,000 on exploration at the project within 12 months and pay Avoca A$2 per tonne of lithium mined and a 1.5% royalty on lithium sales.
Private company Galahad Resources was the vendor for the nearby Norcott project, which Liontown also purchased around the same time as Buldania.
Through the agreement with Galahad, Liontown paid a A$10,000 signing fee and will make further payments of cash and shares totalling A$120,000.
Mt Marion and Bald Hill lithium projects
The Mt Marion lithium operation is held under a joint venture between Mineral Resources (ASX: MIN) (43.1%), China-based Jiangxi Ganfeng Lithium (43.1%) and Neometals (ASX: NMT) (13.8%).
During the second half of 2017, 221,000t of spodumene was produced from Mt Marion, with the joint venture bringing in US$843 per dry metric tonne (dmt) for 6% spodumene concentrate and US$478/dmt for a 4% spodumene concentrate.
Singapore listed Alliance Mineral Assets possesses the other 50% interest in the project where mining activities have begun.
First ore is expected to be fed through the 1.2 million tonne per annum Bald Hill plant sometime this month.
The Bald Hill owners plan on selling a 6% lithium concentrate to Burwill Holdings under an existing offtake agreement.
Bald Hill has a resource of 18.9 million tonnes grading 1.18% lithium and 149 parts per million tantalum.
Shares in Liontown slid 5% in afternoon trade to A$0.038.