Now Fully Financed Until 2025
The Canadian lithium explorer Usha Resources Ltd. (TSXV: USHA) (OTCQB: USHAF; FSE: JO0) intends to focus on its recently acquired VMS copper project Southern Arm in the Abitibi greenstone belt in Quebec this coming fall. Further work on the White Willow lithium pegmatite project in Ontario will be postponed for now, despite promising exploration results, in consideration of the market. As the company reports, preparations for drilling on the Southern Arm project have already begun. A biogeochemical survey will soon start to identify additional priority targets to be included in the company’s first drilling program. In parallel, the company has secured 924,999 CAD in fresh capital through the issuance of 8,043,478 flow-through shares. The shares were issued at 0.115 CAD per FT share. This financing is the first tranche of a private placement that can be expanded to a maximum volume of 2,000,000 CAD.
Deepak Varshney, CEO of Usha Resources, commented: “The completion of this financing puts Usha in a very strong position for the future. With working capital of more than 2,000,000 CAD, Usha can now aggressively expand its exploration program at Southern Arm and we are fully financed through 2025. With our first drilling program planned for this fall, we aim to make the next major discovery in Abitibi.”
Southern Arm is located in the established mining camp of the Abitibi greenstone belt and is considered a promising target for polymetallic VMS-type mineralization. This style of mineralization is exhibited by Southern Arm’s two neighboring projects, the Selbaie Mine (~15 km southwest) and Abitibi’s B26 deposit, also about 16 km southwest. Historically, 53 Mt with 0.96% Cu, 1.9% Zn, 0.58 g/t Au, 40.7 g/t Ag were mined at the Seblaie Mine. The B26 deposit of Abitibi Metals (TSXV: AMQ) currently hosts an indicated resource of 6.97 with 2.94% Cu Eq (1.32% Cu, 1.80% Zn, 0.60 g/t Au and 43 g/t Ag), although this figure is likely to be massively expanded soon by a new resource estimate. Usha has optioned the Southern Arm project from Abitibi Metals. According to the option agreement, the company can acquire a 100% interest in the Southern Arm property by issuing a total of 5,000,000 common shares to Abitibi and investing 2,000,000 CAD in exploration within two years. Several drill targets have already been identified on Southern Arm itself, including “Hollywood”, where anomalous metal values were measured over a ~1.8 km area (see Figure 1). Usha can draw on the same successful team of geologists that is already active at B26.
Conclusion: Those who stand still or cling to old ideas in the exploration business lose. Usha Resources has therefore decided to focus on the VMS copper project Southern Arm, which has all the prerequisites for a new VMS discovery. For the time being, Usha will not spend its own money on lithium exploration. Instead, the company expects to soon conclude a definitive agreement for its Jackpot Lake lithium brine project in Nevada. The US company Stardust Power, Inc. (market value 590 million USD) wants to secure the right to a 90% interest in the project. According to the existing letter of intent, a total compensation of up to 26,025,000 US$ would be due over a period of five years. During this period, Stardust Power would commit to work worth 8 million US$. At the same time, Usha would receive staggered payments of 1,525,000 US$ in cash, 750,000 US$ in shares, and an additional 15,750,000 US$ in shares or cash at their discretion.
