Bradda Head Lithium Ltd (AIM:BHL, OTCQB:BHL) sure did hit the ground running at the beginning of 2022.
Before January was even three-quarters over the company had announced the exercising of its option to acquire the Burro Creek assets in Arizona and their subsequent re-naming, positive metallurgical results from what is now known as the Basin project, the arrival of a couple of new investors on the share register with notifiable interests, the commencement of trading on the OTCQB market in America, and the results of geophysics programmes from the Eureka project in Nevada.
Oh, and along the way, the share price more than doubled, before dropping back a little to its current levels of around 12p.
All this from a company that listed only around six months ago.
So, what’s the secret.
First off, although the company is fairly new on the market, the assets had already been well teed up when the shares did start to trade.
The people behind Bradda Head are no mere newcomers to the market finding their way.
On the contrary, the board of Bradda Head is about as heavyweight as you could possibly find on any junior mining company.
For a start, there’s Jim Mellon, whose been a major financial force in mining for years. Then there’s Ian Stalker, a veteran of the industry, and partner with Mellon on several prior successes and ongoing ventures. Mellon fellow-traveler Denham Eke is handling the financial side, while the chief executive’s role is filled by Charles FitzRoy, an ex-army man with a good chunk of corporate finance expertise on his CV, as well as memberships of various august geological societies.
Is it surprising then, that a company put together by these men hit the ground running?
And the momentum shows no sign of letting up either, as FitzRoy explains.
First off, Bradda is cashed up, following the recent sale of a royalty over Burro Creek (as then was) and the Wikieup project, which collectively make up the part of Bradda’s lithium portfolio that’s hosted in sedimentary rocks.
A total of US$8mln will eventually make its way into the Bradda cash pile, ring-fenced for use in the development of the sedimentary assets.
“We’re funded to get the sedimentary assets to an early-stage technical study,” says FitzRoy.
In the immediate term, the plan is to update the resource at Basin East before the end of the current quarter, and to deliver a maiden resource at Wikieup not too long after that.
But that’s not all.
There are also hard rock and brine assets inside the Bradda portfolio.
The company plans to drill at the San Domingo hard rock project in Arizona in the coming months, and if that works out well, there’s every possibility that San Domingo could leap ahead of Basin in terms of a production timeline, because mining hard rock is a much simpler proposition.
Meanwhile, Bradda will also do further exploration at the Wilson and Eureka brine projects in Nevada.
Recent geophysical results from Eureka demonstrated the potential presence of both brine and clay deposits there, encouraging enough results for Bradda to stake more ground in the immediate vicinity.
That news also allowed the company to subtly remind the market of the potentially strategic location of its assets.
Not only Basin, San Domingo, Eureka and all the rest located comfortably inside of an America that’s becoming increasingly concerned about security of supply, but they are also not too far as the crow flies from Tesla’s Gigafactory in Nevada, likely to be one of the largest consumers of lithium in the Western United States, if not the largest.
Will Bradda’s supply marry up with Tesla’s demand? That’s probably a question for another day. The pertinent point though, is that the Bradda portfolio is about as close to the centre of the action as you could want it to be.
It was with that strategic factor partly in mind that potential investors in the US had been asking FitzRoy how they could invest. The new OTCQB listing has provided them with an easy way, and it surely won’t be surprising to see more Americans appearing on the register as the newsflow continues to pour out of Nevada and Arizona.
Some interesting milestones might also be passed on the way.
“We could have more resources than Arizona Lithium by the end of the quarter,” muses FitzRoy, as he tots up the potential additions to the resource base the pending updates are likely to deliver.
There are a lot of moving parts involved in that off-hand remark, but if he turns out to be correct, investors cognizant of Arizona Lithium’s A$300mln-plus market capitalization on the Australian Securities Exchange will start to wonder what sort of valuation to put on Bradda Head.
At the moment, Bradda is valued at just under £40mln on the London market. That’s quite a value gap, and one that may very well close, sharpish.