Critical Resources Ltd (ASX:CRR) shares traded as much as 31.9% higher intra-day to 12 cents after acquiring the Graphic Lake Lithium Project in Ontario, Canada.
The project is about 180 kilometres from the company’s recently acquired Mavis Lake project and is considered as prospective for both lithium and rare earth elements (REE).
There are natural synergies between Mavis Lake and Graphic Lake that demonstrate the company’s intent to cement its position in the Canadian lithium sector.
“Excellent early-stage exploration opportunity”
Critical Resources managing director Alex Biggs said: “The Graphic Lake lithium project in Ontario Canada represents an excellent early-stage exploration opportunity that is synergistic with our newly acquired Mavis Lake project.
“The company is committed to making quality acquisitions and expanding its access to lithium raw materials to provide the company’s shareholders with exposure across a range of battery and critical minerals.
“An early-stage project such as Graphic Lake allows us to add significant value from the ground floor, in a commodity that we anticipate will be in high demand for the foreseeable future.”
Key transaction terms
The company has acquired the project by paying A$80,000 in cash, issuing A$120,000 worth of shares in Critical Resources and a 1.5% net smelter royalty (NSR) capped at C$500,000 with the option to purchase at any time for C$500,000.
Graphic Lake Lithium Project is dissected by the Trans Canadian Highway, providing key links to larger cities such as Thunder Bay, Ontario to the southwest and Winnipeg, Manitoba, to the west. The region is a well-established lithium province with multiple projects across the region.
Previous works
The majority of previous works completed at Graphic Lake has been conducted by government bodies including the Ontario Department of Mines and the Ontario Geological Survey.
There is evidence that the area was staked and explored in 1980 but there is no information available. 2003 represents the first documented prospecting program on the property.
Ten samples were gathered, of which seven returned anomalous values of elements including beryllium, caesium, lithium, rubidium, tin and tantalum.
Further grassroots prospecting was completed in 2021. From this campaign, there are currently thirteen samples at the lab awaiting assays.
Forward work program
The company plans an aggressive approach to exploration at Graphic Lake with a view to delineating a JORC compliant resource. Planned activities are as outlined below.
- Surface mapping and sampling - Surface mapping and sampling of outcrops will assist in identifying drill targets in conjunction with the planned airborne survey data. Further surface mapping of the lease may find new pegmatites not previously documented.
- Airborne survey - An airborne survey is to be completed as soon as possible to help identify targets for a drill program.
- Channel sampling - Channel sampling is to be conducted on areas of interest previously identified by outcrop mapping and sampling. This sampling may require the stripping of outcrops, as a precaution. The permitting for this has already begun.
Drill program
Based on the activities outlined above, it is expected a preliminary drill program of 2,500 metres or greater will be designed with drilling permits ready to be submitted.
A secondary drill program of 5,000 metres will be designed based on the preliminary results and data interpretation from previously outlined exploration activities.
Lithium industry in Ontario
Tesla recently announced the opening of a battery gear manufacturing plant in Markham, Ontario demonstrating the significant opportunity for Ontario to become one of the world’s leading lithium provinces.
The facility will be the first branded Tesla manufacturing facility in Canada.
A significant amount of activity in the lithium exploration sector is currently occurring in Ontario.
Due to the quality of lithium assets in the region, the fundamental drivers behind the lithium market and the intent of North American manufacturers to source lithium for battery manufacturing from localised supply chains, it is an excellent time to be gaining a foothold in Ontario.