{kanada_flagge}Usha Resources’ (TSXV USHA, FRA JO00) technical team is making final preparations to resume drilling with a more powerful drill rig at the Jackpot Lake Lithium Brine Project in Nevada. The objective of the new drilling is to deepen the existing JP22-01 and JP22-02 holes to approximately 2,000 feet (about 600 m), this time penetrating to impermeable bedrock.
{kanada_flagge}Usha Resources’ (TSXV USHA, FRA JO00) technical team is making final preparations to resume drilling with a more powerful drill rig at the Jackpot Lake Lithium Brine Project in Nevada. The objective of the new drilling is to deepen the existing JP22-01 and JP22-02 holes to approximately 2,000 feet (about 600 m), this time penetrating to impermeable bedrock.
With the old, weaker drill rig, drilling was only possible to a depth of about 500 meters. Therefore, an estimated 100 meters were missing for complete drilling to the bottom of the closed basin. Drill holes JP22-01 and JP22-02 each ended in higher porosity sand and conglomerate zones with measured intercepts of 30 and 80 meters thick, respectively. Usha geologists plan to use the more powerful drill rig to explore whether the porous sediments continue even further to depth. This would be of great importance. Because such deep porous layers physically contain brine with the highest density, i.e. with the highest concentration of lithium. Moreover, their permeability makes them well suited for brine pumping.
In two known lithium brine projects in the Clayton Valley in Nevada, the porous zones above the bedrock play a central role. The Esmeralda formation is one of the potential sources of brine lithium enrichment in Clayton Valley, where Albemarle’s Silver Peak lithium brine mine is located. The average value for the Esmeralda formation is 100 ppm lithium.
Lithium producer Albemarle is currently working to expand its Silver Peak mine through conventional production with evaporation ponds. Directly adjacent, Pure Energy is advancing its brine project together with Schlumberger. Here, too, the porous zones at depth in the Clayton Basin are of central importance. A large volume of brine with excellent grades has been identified here. Unlike Albemarle, however, Pure Energy/Schlumberger are relying on the more environmentally friendly direct extraction of lithium.
Conclusion: Usha Resources is, we think, one of the most underrated lithium companies in the market. Unfortunately, exploration of the Jackpot Lake brine project in Nevada has not progressed as quickly as desired. The old drill rig proved too weak and took nearly six months to get better replacements (including new permits). However, the company has taken advantage of the forced pause and in the meantime has assembled a substantial portfolio of hard rock lithium assets in Ontario. Exploration there is already in full swing, delivering encouraging results in series. But while the Ontario projects are still in the early stages, exploration at the Jackpot Lake project is well advanced. With the new drill rig, a well takes only a few days to drill, rather than weeks. Representative samples for the calculation of an initial resource are therefore expected to be available as early as July of this year. If the results match those from neighboring Clayton Valley, the first resource estimate could follow as early as the fall. Investors should look out for two things: Powerful pumpable zones at the bottom of Jackpot Lake and lithium grades of at least 100 ppm. News of this nature should cause a complete re-evaluation of Usha Resources. The company is currently (still) valued at CAD 12 million, only!
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