Liontown Resources (ASX: LTR) has discovered lithium oxide grading up to 4.6% at its recently acquired Buldania project in Western Australia’s eastern goldfields.
As well as the 4.6% assay, initial rock samples also returned lithium oxide grading 2.7%, 2.8%, 3.5% and 4.2%.
The samples were taken from an extensive area and contained primarily spodumene.
Previous exploration at the tenement was for gold and nickel, with some pegmatites partially documented in historical mapping.
Located about 600km east of Perth, the newly acquired Buldania project is near to existing lithium deposits Mt Marion and Bald Hill.
Liontown plans to carry out further geological mapping and sampling to define drill targets for a campaign pencilled in later this year or early 2018, depending on regulatory approvals.
Buldania is also close to road and rail, with links to the Port of Esperance for export potential.
Liontown secured the metal rights to Buldania and the nearby Norcott project on 23 October 2017.
The company suspects the lithium mineralisation at Buldania extends into Norcott. Although there has been no previous lithium exploration at Nortcott, initial reconnaissance has identified multiple pegmatites.
The Buldania project area encompasses 55 square kilometres, while Norcott totals about 370 square kilometres.
Separate vendors own the projects and, as such, the acquisitions terms differ.
In relation to Buldania, Liontown secured the lithium and related metal rights for the project from Westgold Resources’ (ASX: WGX) subsidiary Avoca Resources.
Under the agreement, Liontown must spend $100,000 on exploration within 12 months and pay Avoca A$2 per tonne for any lithium ore mined and 1.5% of the gross sales receipts.
Whereas, private company Galahad Resources owns the Norcott project. As part of this acquisition, Liontown will pay an initial A$10,000 signing fee and once the application is granted, Liontown will make further payments amounting to A$120,000 in cash and shares.
An additional 1.25% royalty is payable to Galahad from any revenue made from minerals mined.
The company’s stock leapt from $0.01 per share to $0.02 in early afternoon trade – up more than 66%.