Grid Metals (TSXV: GRDM; US-OTC: MSMGF) says its first drilling at the Falcon West project bodes well for building a critical minerals resource in southeast Manitoba where it also has side-by-side lithium and copper-nickel projects.
Drill hole ADL24-21 at Falcon West’s ArtDon target cut 3.7 metres grading 2.83% lithium oxide (Li2O) from 4.4 metres depth and hole ADL24-22 returned 4.3 metres at 2.82% Li2O from 1.25 metres including 1.7 metres grading 4.69% Li2O, Grid said on Monday.
Hole ADL24-01 at the Lucy target 750 metres east of ArtDon cut 13.9 metres grading 0.73% Li2O from 5.8 metres depth and 3.6 metres grading 1.11% Li2O from 34.1 metres down hole, the company said in a release.
The 612-sq.-km Falcon West lies just off the Trans-Canada Highway 110 km east of Winnipeg and 100 km south of Grid’s Donner Lake lithium project. The company has a lease agreement on the idled True North mill held by 1911 Gold (TSXV: AUMB) where it plans to process feed from Donner Lake. Grid says it’s positioning Donner Lake for a rebound in prices which have fallen by about half for battery grade lithium carbonate in the past 12 months. The price was US$15,100 a tonne on Monday, according to The Wall St. Journal.
3-km strike
“The complex pegmatite unit encountered at the target area occupies the western portion of a major craton-scale tectonic boundary zone that has seen very limited previous lithium exploration,” the company said in the Falcon West release. “This magnetic anomaly has a minimum strike length of 3 km, most of which remains untested by drilling and remains open in both directions.”
The Toronto-based company plans to submit a mining permit application late this year and complete a preliminary economic assessment (PEA) next year for Donner Lake. The infrastructure may also support the development of the adjacent Makwa Mayville copper-nickel project, which the company had put on hold as lithium prices rose. Grid plans to update the Makwa Mayville resource within two months.
Nickel project
The Makwa Mayville project holds 33.8 million indicated tonnes grading 0.27% nickel and 0.37% copper for 203 million lb. nickel and 276 lb. copper, according to a 2014 PEA.
But even nickel prices have fallen 20% in the past 12 months to US$8.70 per lb. and companies such as First Quantum Minerals (TSX: FM) are shutting mines.
Falcon West drilling showed cesium that generally occurs with lithium and spodumene-rich complex pegmatite intervals including peak values of 4.56% cesium monoxide over 3.2 metres in hole ADL24-09, Grid said. The new drill results are in general agreement with an undulating, gently dipping complex pegmatite ‘sheet’ model, it said.
“The Falcon West belt has excellent access and location and the majority of the favourable geological contact at Falcon is unexplored for lithium,” the company said. “Grid expects that with improved lithium prices and sentiment, it will devote more exploration dollars to establishing mineable zones of near surface lithium mineralization at Falcon West.”
Preparing the True North site 85 km north by all-weather road from Donner Lake would cost $50 million, according to a scoping study released in October. Grid also has a memorandum of understanding to put 200,000 tonnes of ore through the Tanco mine’s mill held by China’s Sinomine Resources, but no deal has been signed. Tanco is also much closer to Falcon West than True North.
Site visit
The Northern Miner visited the Tanco and True North sites with Grid in October and shot a video. The conpany plans for Donner Lake to produce about 75,000 tonnes a year of spodumene concentrate through the True North mill at $316 per tonne of concentrate. Mill capacity is estimated at 450,000 annually.
Donner Lake, 180 km northeast of Winnipeg, hosts 6.8 million inferred tonnes grading 1.39% Li2O, according to an initial resource estimate in July. It’s envisioned as a “modest-sized” open-pit operation to start, Grid says.
Shares in Grid Metals closed unchanged on Monday in Toronto at 7¢ apiece, valuing the company at $14.3 million. They’ve traded in a 52-week range of 6¢ to 18¢.
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