Chariot Corporation (ASX: CC9) is pommelling its near-surface lithium spodumene targets with drilling at its flagship Black Mountain project in Wyoming, USA. Armed with a Boart Longyear reverse circulation drill rig, the company is targeting high-grade spodumene resources to fast-track its quick to market initially small-scale mining strategy to service the burgeoning US electric vehicle market.
Following weeks of preparation, Chariot says the rods are now spinning at its spodumene-bearing lithium zones, with up to 18 drill holes planned for about 1000m at two designated mountainous locations.
The move comes as Chariot seeks to define a lithium resource capable of supporting a pilot mining operation to supply burgeoning US domestic demand for the electric vehicle (EV) sector and the wave of new lithium refineries sprouting across the southwest.
Samples will be sent to the American Assay Labs in Reno, Nevada, for analysis, with results anticipated to flow in over the coming months.
Chariot says it has crafted a nimble and adaptable drilling schedule in the face of Wyoming’s bitter winter conditions. Operations will continue until Christmas, before a planned shutdown and resumption in January next year.
The company says the second wave of drilling at the promising project aims to define resources for immediate production and establish a framework for long-term scalability should a predicted third wave of lithium demand and higher prices come to pass.
Chariot’s recent decision to switch from a large-scale mining plan to move on to a swift and low capex smaller-scale production route was made to capitalise on immediate local demand that will appear from the refineries now under construction in the US southwest.
Management believes it can deliver concentrate to producers who are just three hours away, saving them significant money in mostly international transport costs.
The smaller mining path is also attractive to the company because Black Mountain’s home state, Wyoming, has very attractive permit regulations for small mining operations when compared to other jurisdictions.
As with most states, Wyoming enforces a 10-acre (4-hectare) maximum surface disturbance for small mining operations. Unlike other States however, it does not impose a limit on the volume of material that can be extracted – often capped at 35,000 cubic yards (267,60 cubic metres).
Black Mountain’s high-grade lithium is near-surface and expected to remain predominantly near-surface, which lends itself to open-pit mining, thereby reducing mining costs without having to worry about any volume restrictions.
Plans have also been drawn up to pepper Black Mountain with a further 3300m of RC drilling following phase two. Chariot says a mixture of infill and extensional drilling should allow it to build up a complete 3D model of the deposit to execute its new strategy.
Lithium prices have been widely forecast to bounce back at some stage and Chariot seems to have caught the eye of the market with its low-risk and low-cost production strategy to potentially access early free cash flows.
Following the announcement of the strategy change in early October, Chariot’s share price impressively doubled in an otherwise lacklustre lithium market. The company is now cashed up and setting off to execute its plans that could see it well positioned to service a growing US market.
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