Sometimes trying to beat the rush, becomes the rush.
It might have been a touch more orderly than the online stampede of groovers – both young and old – trying to secure Taylor Swift tickets, but there was still a healthy dose of hype around Forrestania Resources last week as its share price rocketed from 0.086 cents to 0.235c after the company landed an eye-watering 63m pegmatite hit in Western Australia’s Yilgarn region.
The company says it expects assays in about six weeks, after wrapping up its maiden drilling program at the company’s Calypso lithium prospect, with 14 reverse-circulation (RC) drillholes completed for 1968m. In the meantime, the savvy punters who jumped on pre-truth divining will be counting down the minutes to find out if they bought themselves a golden (or should that be lithium) ticket, while the roulette ball bounces around the wheel.
With accuracy that would make William Tell proud, Forrestania pierced multiple stacked pegmatites in 13 of 14 holes to gather 65 intervals. A total of 456m was logged across the baker’s dozen of holes.
The exploration was designed to define and expand the boundaries of the area of known pegmatites that had been identified from mapping and historic mineralisation. Despite the lab still working out if the pegmatite sausage matches the market sizzle, Forrestania is keeping its foot on the pedal with drilling work ongoing at its South Iron East prospect.
The company burst onto the ASX on September 30 in 2021 and while it started with a primary focus on gold, some early lithium results – and, of course, the growing global appetite for the commodity – in addition to the prospectivity of its land, pivoted its focus and it is now firmly chasing the battery metal.
And the Forrestania region from which it has taken its name certainly has a bit going on.
Classic Minerals is getting close to pressing go on its pilot facility as it inches towards becoming the State’s next gold producer at its Kat Gap gold mine, which is 170km south of Southern Cross.
Kat Gap boasts 975,722 tonnes of ore at 2.96 grams per tonne gold for a total of 92,800 ounces across the project’s lifespan. It sits just 120km south of historic WA gold mining stopover Southern Cross and 50km south of Classic’s 80 per cent-owned Forrestania gold project, which has a resource estimate of 311,050 ounces of gold at grades of up to 1.4g/t. In order to remain focused on its gold projects, in February last year the company sold 80 per cent of its lithium rights at Kat Gap to Tribitrage Holdings through a binding heads of agreement.
Also nearby is St George Mining’s Split Rock project, which comprises four granted exploration licences covering an area of 73 square kilometres. The project is within the Mt Holland pegmatite field and about 25km north-west of Covalent Lithium’s Earl Grey deposit, which has a resource of 189 million tonnes going 1.5 per cent lithium – one of the biggest and highest-grade lithium deposits in Australia. Covalent is a 50-50 joint venture between Chile’s Sociedad Química y Miner (SQM) and Wesfarmers.
The constant excitement around lithium can be exhausting for some, but it appears unlikely to be going anywhere anytime soon.
Earlier this week, Rio Tinto minerals division chief Sinead Kaufman told a mining conference in Brisbane that he believed the demand for lithium is expected to grow fivefold out to 2030, with a significant supply-demand deficit expected from the second half of this decade.
Lithium demand also got a shot in the arm earlier in June when China unveiled a US$72.3 billion (AU$109 billion) package of tax breaks over four years for electric vehicles (EVs) and other green cars, in a move which it hopes will boost slow sales growth in the world’s biggest auto market.
China previously offered a subsidy for EV purchases for more than a decade, but the program ended last year and it was immediately reflected by a drop in sales. Now, there is a resurgence.
Chinese EV maker BYD, which is becoming renowned for its pop-up showrooms inside shopping centres and is backed by Warren Buffett’s investment company Berkshire Hathaway, has become the country’s biggest auto maker by sales volume this year.
Analysts now argue that the new incentives, which put a cap on the purchase tax exemption, will help drive the growth of cheaper models that are mainly produced by domestic firms, rather than premium vehicles from foreign manufacturers. Research group Rystad Energy is anticipating EVs sales in China will grow by 30 per cent next year, up from the 15 per cent estimated for this year.
And all those cars need lithium.
Elsewhere in the markets last week, Metal Hawk soared more than 158 per cent after getting its talons into high-grade rare earths with its first attempt with the drillbit in WA’s Esperance hotspot. The Hawk’s stock went from 8.7c to touch 22.5c.
But sometimes explorers don’t even need to put their boots on and that was the case for Western Yilgarn, which jumped from 7.5c to 17.5c – a boost of 133 per cent – after a desktop review uncovered some targets near Chalice Mining’s famed Julimar nickel project. Notably, that project took Chalice from 10c to $10 and at the same time wrote its name into ASX folklore.
Another notable stock jump came for cancer diagnostics company Inoviq, which nearly doubled its price following the tabling of some positive results relating to its blood-testing technology that can screen for breast cancer. Its share price hit a 52-week high of 99c after closing out the previous week at just 50.5c.
With 190 biotech companies listed on the ASX, it is getting harder and harder to attract investor attention. A problem for some, but clearly not for Inoviq.
Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au
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