Fully funded until 2025
Usha Resources Ltd. (TSXV: USHA; OTCQB: USHAF; FSE: JO0) plans to focus on its recently acquired Southern Arm VMS copper project in Quebec’s Abitibi Greenstone Belt this fall. Further work on the White Willow lithium pegmatite project in Ontario will be postponed for the time being, despite promising exploration results, in consideration of the market. According to the company, preparations for drilling on the Southern Arm project have already begun. A biogeochemical survey will commence shortly to identify additional priority targets to be included in the company’s initial drill program. In parallel, the company has secured CAD 924,999 in fresh capital through the issuance of 8,043,478 flow-through shares. The shares were issued at CAD 0.115 per FT share. This financing is the first tranche of a private placement that can be expanded up to a maximum of CAD 2,000,000.
Deepak Varshney, CEO of Usha Resources, commented: “The closing of this financing puts Usha in a very strong position for the future. With over C$2,000,000 in working capital, Usha can now aggressively expand its exploration program at Southern Arm and we are fully funded until 2025. With our first drill program planned for this fall, we are targeting to make the next big discovery at Abitibi.”
Southern Arm is located in the established mining camp of the Abitibi Greenstone Belt and is considered a prospective target for polymetallic VMS-style mineralization. This style of mineralization is exhibited by Southern Arm’s two neighbouring projects, the Selbaie mine (~15 km to the southwest) and Abitibi’s B26 deposit, also approximately 16 km to the southwest. The Seblaie mine has historically produced 53 Mt at 0.96% Cu, 1.9% Zn, 0.58 g/t Au, 40.7 g/t Ag. Abitibi Metals’ (TSXV: AMQ) B26 deposit currently hosts an indicated resource of 6.97 at 2.94% Cu Eq (1.32% Cu, 1.80% Zn, 0.60 g/t Au and 43 g/t Ag), but this figure is expected to be massively expanded soon by a new resource estimate. Usha has optioned the Southern Arm project from Abitibi Metals. Under the option agreement, the company can earn a 100% interest in the Southern Arm property by issuing a total of 5,000,000 common shares to Abitibi and investing C$2,000,000 in exploration over two years. Several drill targets have already been identified on Southern Arm itself, including “Hollywood” where anomalous metal values have been measured over a ~1.8 km area (see Figure 1). Usha has the same successful team of geologists already working on B26.
Conclusion: If you stand still in the exploration business or stick to old ideas, you lose. Usha Resources has therefore decided to focus on the Southern Arm VMS copper project, which has all the prerequisites for a new VMS discovery. For the time being, Usha will not be spending its own money on lithium exploration. Instead, the company expects to conclude a definitive agreement for its Jackpot Lake lithium brine project in Nevada shortly. The US company Stardust Power, Inc. (market capitalization USD 590 million) wants to secure the right to a 90 % stake in the project. According to the existing letter of intent, a total consideration of up to US$26,025,000 would be due over a period of five years. Stardust Power would commit to US$8 million of work over this period. At the same time, Usha would receive staged payments of US$ 1,525,000 in cash, US$ 750,000 in shares and, at its option, a further US$ 15,750,000 in shares or cash.
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