Latin Resources (ASX: LRS) has revealed a new string of thick, high-grade lithium oxide hits in a recently-discovered core of its Planalto prospect that could extend and upgrade its Salinas project in Brazil.
The company’s recent diamond drilling confirms a widespread mineralised system exists at Planalto, extending in an area measuring about 1300m by 700m and remaining open along strike towards the north-east and south-west and also down-dip.
The Planalto discovery was made about 1500m south-west of the company’s world-class Colina deposit in a diamond drillhole originally intended to test a blind (non-outcropping) geophysical anomaly, intersecting a stacked pegmatite system through about 45m of lithium-rich spodumene mineralisation. Spodumene has a theoretical lithium oxide content of 8.03 per cent and due to that high content, it is considered the pre-eminent ore mineral of lithium metal.
Initial results from the discovery hole point to the high-grade nature of the Planalto system, which looks a lot like the Colina deposit, including its characteristic eastward-dipping, coarse-grained spodumene-rich pegmatite.
Analysis of the discovery drill core revealed runs of 9.25m at 1.21 per cent lithium oxide from 395.29m and 16.14m going 1.29 per cent from 425m including 7.14m running 1.63 per cent from 434m.
The Planalto prospect shows similar mineralisation characteristics to our world-class tier-one Colina Deposit. While the stacked pegmatite lenses at Planalto show a shallower dip to those at Colina, the coarse-grained spodumene-only mineralisation is consistent with what we see at Colina.
Latin Resources Vice-President of Operations (Americas) Tony Greenaway
The company’s latest recent drilling at Planalto has reinforced the initial high-grade nature of the area intercepted by the discovery hole, producing seven best holes with primary intercepts ranging between 4.24m and 16.05m in length and grades ranging between 1.09 and 2.57 per cent lithium oxide. The top intercept in terms of metres by percentage came in at 16.05m at 2.18 per cent lithium oxide.
The same hole also produced the best interval of 9.22m at 2.54 per cent lithium oxide from 293.29m and also gave up a second run of 3.59m going 2.52 per cent from 305.14m. Management says that with the latest drilling highlighting an up-dip trend to the high-grade core of mineralisation, that zone will become the focus of further drilling.
Two priority areas of drilling have been defined. They include a zone between an interpreted cross-cutting fault and the south-western end of the current Colina limit of drilling and a second area south-east of the current Planalto drill pattern and the south side of the same cross-cutting fault, which could possibly be a lateral “jog” in the overall mineralised trend.
Management has also slated the production of an initial mineral resource estimate for Planalto for later this quarter. It is expected to include all available drilling data and will put it together as soon as all the outstanding assay results have been received from the laboratory.
Latin has already begun wire-frame modelling the mineralised pegmatite lodes in preparation for resource estimation to be undertaken by independent resource consultants SGS Geological Services, which has extensive experience with the mineral systems at the Salinas lithium project.
There is a general sentiment out there right now that the lithium spodumene price reduction over the past couple of years has made lithium projects unviable for now. However, just a cursory glance at Pilbara Minerals’ June quarterly tells a starkly different story.
Pilbara managed to produce a tonne of 5.3 per cent spodumene during the June quarter on an FOB (free on board) basis from its Pilgangoora mine in Western Australia for US$390 (AU$597). It sold that produce for US$840 (AU$1286) a tonne – that’s a 115 per cent mark-up, or a gross profit of 53.5 per cent.
Those sort of margins would make a gold miner blush.
Notably, Pilbara sold that same product last quarter for US$810 (AU$1240) a tonne, which means the price is moving north … not that it really needs to with margins already exceeding 50 per cent.
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