Perth-based mineral explorer Kula Gold has enjoyed a sharp spike in its share price after it interpreted two new lithium prospects at its recently-acquired Kirup project in Western Australia’s South West, just 20km from the world’s biggest hard-rock lithium mine in Greenbushes.
Kula’s stock leapt 71 per cent in early trading to an intraday high of 2.4 cents on its biggest trading volume day since July in 2021, when a $1.8 million capital-raising placement was completed.
Kirup covers 117 square kilometres and sits about 20km to the west of the world-class Greenbushes mine. It complements another Kula lithium project, Brunswick, which is about 20km to the north.
Brunswick and Kirup are both within the South West Terrane greenstones in the south-west of the Yilgarn Craton. The prospects have been dubbed Mustang, situated in the north of the Kirup tenement, and Cobra, in the south, and they constitute the project’s first named deposits.
Kula says reconnaissance mapping and rock-chip sampling at Mustang has produced evidence of bladed spodumene and pegmatite at surface and the company has interpreted a 100m-wide by 1 to 3km-long strike from magnetics. It considers it to constitute a walk-up drill target to test for lithium-caesium-tantalum (LCT) mineralisation below the weathered zone, at a depth of somewhere between 15 and 50m.
Management notes it is similar to that found at the Greenbushes mine, which also boasts a deep weathering profile down to a similar depth. Drill planning is in progress and Kula is hopeful that reverse-circulation (RC) drilling will follow at Mustang in this year’s third quarter.
At the Cobra prospect, a potential strike of 100 to 200m-wide by 1 to 3km long has been interpreted. Cobra is about 12km from Mustang and though there is no evidence the mineralisation is contiguous, exploration at Kirup will continue.
These new Mustang and Cobra prospects with evident spodumene, potential LCT-suite mineralisation are an encouraging development from some regional work to add to our advancing lithium portfolio of projects. Kula Gold chief executive officer Ric Dawson
Management revealed late last year that it was buying into Kirup when it entered an agreement with Sentinel Exploration to grab a 70 per cent interest in the project’s deposits of lithium and related minerals. At the time, Mr Dawson proclaimed: “The best place to explore for lithium is near the biggest hard rock lithium mine in the world.”
Sentinel has previously identified 11 pegmatite locations at the site and Kula believes it features encouraging potential lithium-bearing rock types.
The Sentinel agreement was only finalised on March 31 when Kula’s shareholders approved the purchase. The latter has already completed groundwork as part of its due diligence and earlier this month, it reported initial samples revealing anomalous lithium rock-chip results returning up to 240.8 parts per million lithium and 71.9ppm lithium.
To effect the deal, Kula had to pay Sentinel a cash reimbursement for exploration expenditure of $200,000, 12 million fully-paid ordinary shares and a deferred consideration component of $2 million, payable in fully-paid ordinary shares upon announcing a JORC maiden resource of a minimum of 10 million tonnes of ore at a grade of at least 1 per cent lithium.
The Greenbushes deposit is recognised as boasting the world’s highest grade of lithium, in addition to containing the globe’s biggest hard-rock deposits of spodumene. Its output accounts for about 22 per cent of the global lithium market.
The mine is owned by United States-based company Albemarle Corporation and China’s Tianqi Lithium Corporation and produces nearly 2 million tonnes of lithium spodumene annually.
Kula also revealed that recent RC drilling at the Brunswick project’s Donnybrook gold mine has concluded, with four holes going to 360m. Composite samples have been sent for geochemistry analysis to determine any potential LCT and gold mineralisation.
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