Anson Resources Ltd (ASX:ASN) recently completed a site visit to its Paradox Lithium Brine Project located 20 minutes drive from the town of Moab in the U.S. state of Utah.
During the site visit, access roads and drill pad availability for additional drill hole targets were identified in the central to northern end of the project area.
These include an existing oil well, Gold Bar Unit 2, which it may be possible to re-enter resulting in a cost saving compared to drilling a new well.
During May, the company tripled the land size of the project to 291 placer claims with an area of 2,334 hectares.
Furthermore, more recently, Anson estimated an Exploration Target of 30 to 40 million barrels with a grade of 500 to 1,700 ppm lithium with an area of the project known as Clastic Zone 31.
Significantly, these grades are comparable to the highest known lithium brine grades worldwide.
Paradox Lithium Brine Project
The 2,334 hectare Paradox project is located in the resources friendly jurisdiction of Utah and is an 11 hour drive to the Tesla Gigafactory in the neighbouring state of Nevada.
It is located 4 kilometres from an operating potash mine and in a semi-desert region that has 300 days of sun per year.
Anson is earning up to 70% in the project by spending US$3 million.
Historical brine analysis taken within 800 metres of the project produced results ranging from 500 ppm to1,700 ppm lithium.
The project covers an 8.9-kilometre strike length along what is known as Robert’s Rupture, a significant rift, thought to be a source of lithium-rich brines.
A historical well, Gold Bar Unit 2, was drilled to a depth of 9,682 feet within the project and intersected Anson’s target zone known as Clastic Zone 31.
Clastic Zone 31, which contains lithium-rich brines, is possibly replenished from aquifers below, and there are an additional 20 untested Clastic Zones possibly containing brines.
Drill target permitting
Four drill targets have been identified at Paradox, T1-T4.
T1 and T3 are close to Robert’s Rupture, T2 is a previously permitted drill hole and T4 was previously drilled with re-entry a possibility.
Furthermore, recently Anson has identified four additional target sites.
Anson has recently appointed a Salt Lake City based geological and environmental company, to coordinate with all relevant Federal and State government agencies for drilling permits.
The company is also in the process of appointing a consultant to provide a well design and prepare an exploration well permit application.
Metallurgy test work
Encouraging results were obtained in the recent Phase 1 metallurgical test work completed by Outotec, Finland, on synthetically prepared brine solutions.
The test work was performed on two synthetically prepared brines that have a chemical composition similar to that of the brine extracted from the Roberts Brine and the Long Canyon No.1 wells located within 1 kilometre south of the project area.
These drill holes intersected Clastic Zone #31 were found to contain lithium-rich brines.
Analysis
At a share price of $0.017, Anson has a market cap of circa $3.1 million making it one of the lowest valued listed lithium brine explorers.
The project already has a number of foreseeable benefits such as additional revenue from by-products such as iodine, bromine, boron and magnesium.
Furthermore, the levels of heat and pressure reviewed in data support lower operating expenses, which will be further lowered by using modern processing technology.
These advantages can result in a higher margin operation, which can also be complemented by lower capital expenditure due to the location and processing plant method, which in turn can result in a shorter payback period.
Given the project’s prime location in a mining friendly jurisdiction with access to in-place infrastructure, any discovery made at Paradox has strong potential to be a share price catalyst.
Anson is run by Bruce Richardson, a 30 year veteran with a proven track record in exploration, mining and production.
Importantly, Richardson has raised over $170 million in the past few years for mining projects, which provides investors with confidence that he can take a discovery through to production.
If Anson is able to turn this Exploration Target at Paradox into an estimated lithium brine resource, it will have the important advantages of being within road freight distance of the Tesla Gigafactory and at the lower end of the cost curve.
Deutsche Bank forecasts unprecedented demand growth for lithium in the years ahead due to the rapid growth in electric vehicles and energy storage using lithium-ion batteries.