American Lithium (CVE:LI)#
American Lithium (CVE:LI) has provided an update on activities across the company. At a corporate level the key announcements have been that the company is progressing an NYSE listing and the recent meeting with President Castillo. Given the already strong following in the US we see this as a logical step for the company while the latter has given the company impetus and confidence to advance its Peru assets with an expanded work programme.
Operationally, the recent strong newsflow has demonstrated that progress is being made across the portfolio. In Nevada, approval has been received to drill 15 holes on the recently acquire Big Smoky / Crescent Dunes land package which substantially expands the company’s acreage to the North where the 7.13mnt LCE resource was limited only by the license boundary and remains open. Mapping and soil sampling have identified a number of high grade targets within the new license area where surface samples yielded over 2,000ppm Li which will be drill tested. This will occupy the company while the broader development programme is signed off by the BLM which is now expected by year end. The company have been conducting met test work across three flowsheets all of which have achieved strong technical success with high recoveries of 89-97% lithium. The different work streams will be brought together for a PEA to be published in Q1 2022.
In Peru; on the lithium side a 40 hole programme is lined up, primarily as an infill programme to upgrade the resource to Measured and Indicated but also to test the nearby targets which have been mapped and sampled. Drilling is ready to start as soon as the final permits are received. This work will again feed into an economic study, building on the PEA previously published which although showed potential it focused on the lithium and did not include the significant cesium or SOP by-products. Falchani is potentially one of the largest cesium resources globally and could make this project a highly strategic asset by itself.
The work programme at Macusani is also being expanded on the back of the positive Presidential meeting and uptick in uranium sentiment. A 70 hole programme (12,000m) is being planned to follow up on the recent sampling and mapping work which identified new potential zones of mineralisation. As previously highlighted this will give the company the data needed to refresh and update the PEA to enable an investment decision to be made; in the context of the core lithium portfolio and uranium market. Key areas for advancement include mine life extension on the back of resource expansion and investigation of tank leaching versus the original heap leaching concept.
American Lithium has a busy six to twelve months ahead and we expect a catalyst rich period with assay results, met testing updates all culminating in published studies that will take the company to the development phase.
We reiterate our Buy recommendation and target price of C$6.95/sh.
Tectonic Gold (NXX:TTAU)#
Tectonic Gold (NXX:TTAU) has announced that following the recent decision to immediately extend the Southern Copper drill programme the team is back on site and drilling is underway. The first 250m scissor hole is designed to confirm the discovery, in conjunction with pending assay results, reported as a 20m intercept of sulphide mineralisation from 110m depth.
TTAU’s exploration approach has been built off advanced geophysics techniques which have been pioneered with Australian universities. This novel approach has qualified the company for grant funding in the form of rebates. The 100% success rate in terms of drill intercepts have certainly vindicated this approach, in our view, making drill targeting highly cost efficient. The second hold being drilled at Goldsmith’s, the recently uncovered high grade historical workings, will test a geophysical anomaly to 300m depth. The target, described as a bullseye signature, has been worked up on the back of the recent work that has been made possible by the bushfires which uncovered the workings. Piecing the on the ground data with the geophysics has given the company the necessary understanding to test the target.
Up 45% since the start of September anticipation is beginning to build around the assay results, however, with a market cap of just £14m, little of the potential upside is priced in at this stage.
We reiterate our Speculative Buy recommendation.
Oliver O'Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: oodonnell@vsacapital.com
Paul Renken, Senior Geologist | T: +44 (0)20 3005 5011 | E: prenken@vsacapital.com
VSA Capital Research | T: +44 (0)20 3005 5000 | E: research@vsacapital.com
VSA Capital Limited, New Liverpool House, 15-17 Eldon Street, London EC2M 7LD | www.vsacapital.com
This email is intended solely for the named recipient. It may contain privileged and/or confidential information. If you are not one of the intended recipients, please notify the sender immediately, and destroy this email: any disclosure, copying to any person or any action taken or omitted to be taken in reliance on this e-mail, is prohibited and may be unlawful. Any views expressed in this message are those of the individual sender, except where specifically stated to be the view of VSA Capital Limited, its subsidiaries or associates. Whilst all efforts are made to safeguard inbound and outbound emails, VSA Capital Limited and its subsidiaries or associates cannot guarantee that attachments are virus-free or compatible with your systems and do not accept any liability in respect of viruses or computer problems experienced.
VSA Capital Limited will use your personal information to administer your account in order to provide any products and services you have requested from us. Your personal information will be kept secure and will not be shared with any other party unless you provide consent to that effect.
VSA Capital Limited is Authorised and Regulated by the Financial Conduct Authority and is a member of the London Stock Exchange.
The Company is registered in England with company number 2405923 at New Liverpool House, 15-17 Eldon Street, London EC2M 7LD.