Usha Resources Ltd. shareholders (TSXV: USHA; OTCQB: USHAF; FRA: JO0) will vote on the spin-out of nickel assets currently held 100 percent by Usha at a special meeting of shareholders on Dec. 16, 2022. If approved by shareholders, Usha shareholders would in the future hold shares in two publicly traded companies: Usha itself and, on a 5:1 basis, its wholly owned subsidiary Formation Metals. USHA would retain its U.S. assets, including the Jackpot Lake lithium brine project, while Formation Metals would focus on the Nicobat nickel project in Ontario.
Summary: Geologically, the Jackpot Lake Salar is the little brother of the Silver Peak Salar, where Albemarle has been producing lithium for more than 50 years. The upcoming drilling is perfectly prepared. Data indicate a closed basin with an underground lithium lake above bedrock at a depth of about 625 meters. Recently, the internationally sought-after lithium expert Mike Rosko was personally on site. He will manage the resource estimate for Usha despite his multiple commitments in South America. Theoretically, just two drill holes would be enough to define a first so-called "inferred resource". However, Usha wants to drill at least six holes to a.) gain more certainty and b.) maximize the resource if possible. The value of a lithium resource in the U.S. is likely to increase even further as a result of the Biden Inflation Reduction Act. Usha's current stock market value does not currently reflect this fantasy. The current enterprise value of less than CAD 5 million (7.3 million market value less 3 million cash) says more about the current liquidity squeeze of stock market investors than it does about the value of the project itself. At the latest with the announcement of a resource, the market will no longer pass Usha by. After all, neighbor Acme Lithium (TSXV: ACME) has nearly CAD 30 million in market value after successful drilling. A clay-rock based lithium project like Cypress Development's in Nevada even brings it to more than a hundred million dollars in valuation. Whether this is rational remains to be seen. In any case, there is still a lot of room for Usha to go up if drilling is successful.
Usha Resources Ltd. (TSXV: USHA; OTCQB: USHAF; FWB: JO0) has assembled a world-class team of experienced professionals for the upcoming initial drilling at its Jackpot Lake lithium salar 35 km northeast of Las Vegas, USA. Specialist geologist Michael Rosko has been engaged as a so-called "Qualified Person" to evaluate a future lithium resource.
Usha Resources Ltd (TSXV: USHA; OTCQB: USHAF; FRA: JO0) has received a drilling permit from the United States Bureau of Land Management (BLM) for its Jackpot Lake lithium brine project 35 km northeast of Las Vegas, USA. (Figure 1) The authorities have approved six exploration wells with a drilling volume of 2,700 meters and a maximum depth of approximately 600 meters per well.
Conclusion: the American carmaker Tesla has revolutionized the market for electric mobility. But when it comes to mining lithium, the U.S. relies almost entirely on imports. Albemarle's Silver Peak Mine in the U.S. remains the country's only producing lithium mine to date. Usha therefore has several advantages with its Jakepot Lake project. The project is located in the U.S., in the mining-friendly state of Nevada just outside Las Vegas, but just far enough out that no residents or water users will be disturbed. The geology is well known and strongly reminiscent of Albemarle's Silver Peak Mine, just a four-hour drive away. The chances of a discovery are therefore good. Usha could report its first resource as early as the end of the year. The transition to a resource company is usually rewarded by the stock market with a premium. Currently, Usha trades at a market value of around CAD 10 million, making it by far the lowest valued stock among lithium explorers in Nevada.