Core Lithium Ltd (ASX:CXO) is out to acquire a new lithium asset near its cornerstone Finniss project in the Northern Territory.
The lithium stock has entered a binding agreement with gold giant Newmont Corporation’s subsidiary to pick up the Shoobridge project, 80 kilometres south-southeast of the Finniss asset.
Shoobridge contains historic pegmatite tin-tantalum surface workings which have not been tested for their lithium potential, making it an attractive acquisition target as Core looks to increase its lithium resources.
Core will be the first company to explore and drill these prospective, potentially lithium-rich pegmatite systems for economic spodumene lithium mineralisation.
Complementary lithium growth opportunities
Commenting on the transaction, Core managing director Stephen Biggins said it was a strategic acquisition with exploration upside that would complement Core's existing lithium projects in the NT.
"While we are firmly focused on developing the Finniss Lithium Project, we are excited by projects such as Shoobridge that provide synergies and complementary lithium growth opportunities,” he explained.
“The expected increases in resources from this deal and our well-funded resource drill programs at Finniss this year should provide a strong platform for extending and expanding lithium production from the project as lithium prices continue to rise.”
Core’s wholly-owned subsidiary, Lithium Developments Pty Ltd, has agreed to pick up the Shoobridge project from a Newmont subsidiary for $250,000, along with a 2% net smelter royalty on all gold, lithium and uranium extracted from the tenement.
Shoobridge’s backstory
Despite a long history of exploration in the Shoobridge area, little of it has focused on lithium.
In the north of the Shoobridge project area, tin was discovered at the Old Company mine in 1882, along with several other occurrences, including the Barrett's workings.
The Barrett's pegmatite occurs over a strike of at least 210 metres and thickness of around 10 metres, and it’s just one of a swarm of pegmatites that occurs over a known strike length of 2.5 kilometres.
In 2001, Julia Corporation Ltd drilled 40 reverse circulation holes on 14 traverses at Barretts and announced a significant tantalite and tin occurrence.
Core is yet to obtain the data, but considers that it is unlikely that drilling tested the prospective fresh pegmatite, nor that lithium was assayed.
In 2005, Altura undertook broad spaced soil sampling in the Barretts area and identified an anomalous lithium zone at least 500 metres long, which is not believed to have been followed up with drilling.
Also of interest is the Two Bobs pegmatite in the Plateau Point pegmatite field.
This pegmatite occurs over a width of about 110 metres and a strike of around 3.3 kilometres.
Soils collected over Two Bobs by Haddington Resources Ltd showed lower tenor than Barretts, although lithium, caesium and rubidium were able to define the pegmatite trend.
Once it completes the Shoobridge buy, Core will look to drill these pegmatites, targeting below the depth of oxidation.
Beyond lithium, the property could be prospective for gold, lead, silver, zinc and/or uranium.
About Core
Core Lithium is building Australia's newest and most advanced lithium project on the ASX, the Finniss Project in the Northern Territory.
With first production on schedule for delivery by the end of 2022, the Finniss Project places Core Lithium at the front of the line of new global lithium production.
Finniss has been awarded Major Project Status by the Australian Federal Government and, once online, will provide the globe with high-grade and high-quality lithium suitable for lithium batteries used to power electric vehicles and renewable energy storage.