Kalamazoo Resources has kicked off a 12,000m air-core (AC) drill program at its Dom’s Hill lithium project in Western Australia’s Pilbara region to target two broad areas prospective for lithium-caesium-tantalum (LCT) pegmatites.
The operation sits along a significant strike extent of Archaean granite-greenstone contact zone similar to Pilbara Minerals’ nearby world-class Pilgangoora lithium mine. Management expects the campaign to be completed by the end of this month, with its first assays due during the fourth quarter of this year.
Exploration at the site, in addition to the company’s Marble Bar lithium project, is part of its joint venture (JV) with major Chilean lithium producer Sociedad Química y Minera de Chile S.A. (SQM). Kalamazoo previously announced that SQM has the right to earn up to a 70 per cent interest in the tenements, with an initial 30 per cent earned by spending $12 million in four years.
The two Pilbara operations are also part of the company’s agreement to spin out its combined Australian lithium assets with TSX-listed Karora Resources and form Kali Metals, in addition to its wholly-owned Pear Creek lithium project, which is also in the region. As part of the deal, Kalamazoo is offering up its Pilbara lithium portfolio plus its Jingellic and Tallangatta lithium projects in NSW.
Karora is adding its Higginsville lithium project into the spin-out company, giving Kali Metals a combined 3800 square kilometres of tenements, including about 1600sq km in the East Yilgarn lithium corridor that is home to Mineral Resources’ Marion lithium mine and Liatam Mining’s Bald Hill lithium mine.
An exploration team recently launched early-stage field reconnaissance and rock-chip sampling at several high priority targets identified from known pegmatite outcrops at Higginsville.
Kalamazoo holds a 55 per cent interest in the new entity, which is slated for listing on the ASX next month, with Karora covering the remaining 45 per cent prior to the initial public offering (IPO).
Kali Metals will undertake an IPO that is expected to raise between $10million and $12 million in October, with Bell Potter and Canaccord appointed as joint lead manager. It will provide Kalamazoo shareholders with an initial 25 per cent in-specie distribution of its Kali shares and priority entitlement to subscribe for shares in Kali, subject to final shareholder and regulatory approvals.
Once Kalamazoo has its lithium assets squared away with the newly-formed Kali Metals, the company plans to focus its attention on its gold portfolio in the Pilbara region. It recently reported an updated mineral resource estimate at its Ashburton gold project of 16.2 million tonnes at a solid grade of 2.8 grams per tonne for a total of 1.44 million ounces, based on its four key deposits at Mt Olympus, Peake, Waugh and Zeus.
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