When it comes to the world of mining, the metal that is on the lips of most investors these days is “lithium”.
Soaring demand. Lithium supply moving into a long-term deficit. Record lithium prices. Any way you look at the market fundamentals, lithium is a raging bull at present.
One of the junior mining companies seeking to capitalise on this growing lithium boom is X-Terra Resources (TSXV:XTT/FSE:XTR). X-Terra is concentrating its lithium exploration in an emerging hard-rock lithium district in Canada — centred around the James Bay region of Quebec.
X-Terra’s original focus with its Quebec lithium holdings was its “Triple Lithium Properties”: Linos, Linas, and Licorne. The three properties collectively encompass over 10,000 hectares of prospective geology — part of the Rupert-Cabot structural corridor.
More recently, on June 7, 2022, the company announced the acquisition of 38 new lithium claims covering an additional 2018 hectares. The new claims are adjacent to ASX-listed Winsome Resources’ (WR1) Adina lithium project. X-Terra has since dubbed this land package its Liberty Lithium property.
At that time, X-Terra CEO Michael Ferreira offered these thoughts to investors:
“Adding another promising Lithium project to our property portfolio expands our diversification strategy and continues to add opportunities for our shareholders.”
On November 7, 2022, X-Terra Resources put out a news release reporting on drilling work at Adina by Winsome Resources.
To what was X-Terra drawing attention?
Recent drilling by Winsome has highlighted more than 160 metres of pegmatite collectively intercepted in drilling below the recently discovered Jamar outcrop at Adina. In addition, most recent assays from the Jamar outcrop have yielded exceptional grades of up to 4.89 per cent Li2O (see Winsome press release dated October 28, 2022). [emphasis mine]
Pegmatite is an igneous rock that is known to host spodumene. Spodumene, in turn, is composed of lithium aluminium inosilicate. It is thus the primary source of hard-rock lithium.
Assays for these 160 meters of pegmatite intercepts are still pending. But the market is already very excited over this news. Winsome Resources was trading at A$0.32 before the news came out. It’s currently trading above A$0.85.
Experienced traders are noting the extremely robust numbers from recent chip-rock assays from the Jamar outcrop (part of the same geological formation). Further details on those rock samples are contained in a September 30 release.
Some eye-popping numbers:
- Sample C00279921 3.38 per cent Li2O
- Sample C00279929 4.89 per cent Li2O
- Sample C00279942 4.61 per cent Li2O
- Sample C00279945 3.87 per cent Li2O
- Sample C00279946 3.66 per cent Li2O
Rock samples generally contain higher concentrations of mineralisation than are typical of the host geology. But even if the assays from Winsome’s drilling reveal numbers anywhere close to the sampling values, then Winsome Resources will almost certainly have further to run.
Then there is X-Terra Resources.
Its Liberty Lithium property is adjacent and on strike with the pegmatite-bearing geology of the Adina lithium project. And X-Terra itself has also started to move.
After dipping as low as C$0.015 in the recent crazy, market conditions, X-Terra is currently trading at C$0.04. But with a market cap of only C$4 million (versus A$142 million for Winsome), X-Terra still looks heavily discounted in relation to the potential of this news.
For investors whose portfolios are seriously hurting after the major plunge in markets, lithium stocks look like a near-term source of relief.
Michael Ferreira added this update for investors in X-Terra’s most-recent news release:
“Winsome Resources have made a very important discovery in their recent drilling program at Adina, highlighting the potential for another significant lithium deposit. X-Terra has completed its compilation and targeting initiatives and expects to commence an exploration program shortly, as the weather permits.”
Investors want exposure to lithium. Winsome Resources’ recent exploration work at Adina looks very promising. But that company has already tripled its market cap, up to A$142 million, and (for North American investors) it can be difficult to access ASX stocks.
In contrast, X-Terra Resources is sitting on strike and adjacent to Adina, and its stock has only just begun to start moving.
With new exploration work pending on the company’s Liberty Lithium property and a current market cap of only C$4 million, X-Terra offers an exciting risk-reward proposition for investors in lithium stocks.
FULL DISCLOSURE: This is a paid article by The Market Herald.