Bradda Head Lithium flies high following Basin East resource growth

A little more than nine months following its initial public offering (IPO), U.S.-focused junior Bradda Head Lithium (AIM: BHL, US-OTCQB: BHLIF) shares continue to fly high following the 65% resource growth at its Basin East lithium project in Arizona.

With rising lithium prices, Bradda Head shares trading in London have tripled in value and continues to trade at a relatively high level on heightened investor interest.

Bradda Head announced on March 29 that based on only 1,110 metres of drilling completed on the project in 2021, the company added 120,000 tonnes of lithium carbonate equivalent (LCE) to the initial resource statement of 185,000 tonnes LCE, for an updated total of 305,000 tonnes LCE.

“The increase in LCE at Basin East and assessment of exploration potential is extremely encouraging and highlights the resource growth potential,” CEO Charles FitzRoy told The Northern Miner in a recent interview.

“The total drilled area at Basin East covers 2.4% of our 47 sq. km., which previously only covered just under 2%. That’s an increase of 120,000 tonnes of LCE over a drilled area increase of 0.2 sq. km. Evidence from drilling and geophysics suggests that this higher-grade Upper Clay layer could be relatively continuous.

“We look forward to evaluating its potential further and following it into our other claims, where we believe it may also be present,” he said.

With all the exploration work Bradda has done since its IPO last July, FitzRoy believes consulting engineering firm SRK now has the confidence to define an upgraded exploration target of up to 6 million tonnes of LCE at the Basin project.

Notably, the recent exploration drilling and core logging have also identified a high-grade zone within the resource of 58,000 tonnes grading at circa 1,300 parts per million lithium. The company expects it to help identify and locate the next drilling targets.

“We’ve identified a high-grade zone of 1300 ppm, which is a really solid grade,” said FitzRoy, and if it spreads into other areas, “it really changes the asset’s potential.”

FitzRoy said the 2021 drilling programme (3 out of the 10 holes were twinned holes) had given SRK greater confidence in the estimate at Basin East. The previous MRE was contained entirely in the inferred category, and now about 23% of the updated LCE content is in the higher confidence indicated category.

Importantly, FitzRoy pointed out that some 75% of the updated total LCE is in the Upper Clay, which has a grade of around 850 ppm and about 20% of the updated total LCE sits within a newly defined zone called the High-Grade layer within the Upper Clay, which has a grade of around 1,300ppm lithium.

The High-Grade and Upper Clay zones thicken towards the northwest extent of the drilled area into the company’s Basin East Extension claim. They could potentially form part of a higher-grade mining operation than previously planned. The company suggested that this could be mined early in the mine plan as the High-Grade zone sits in the upper part of the deposit.

The previously drilled area only covered 1.9% (0.9 sq. km.) of Bradda’s 47 sq. km. of sedimentary claims. The 2021 drill programme has only increased this drilled area to 2.4% (1.1 sq. km.) of the company’s 47 sq. km. of claims in the district.

For future resource growth, the mineral resource remains open to the west and northwest of the drilled area where the company has the adjacent Basin East Extension claim block and beyond into its Basin North, Basin West and Basin West Extension claim blocks. Geological mapping and geophysical surveys here suggest that similar clay strata are present.

On this basis, SRK has determined an exploration target of between 300 to 1.3 million tonnes of material grading between 600 to 850 ppm Llithiumi identified covering the claims. This target is equivalent to a range of between 1 to 6 million tonnes of LCE.

Bradda Head is planning a 30-hole drilling programme for the remainder of 2022 at Basin East Extension and Basin North, with permits in process. Work is expected to start this quarter.

The company has also approved an additional 14-hole sonic drill programme for Basin East.

Part of its aim to establish net-zero carbon footprint lithium assets in the U.S. is the company’s other advanced sedimentary project, the Wikieup project, also in Arizona. FitzRoy said the market could expect a maiden resource at this additional sedimentary deposit in the current quarter.

Bradda Head also has lithium brine assets at Eureka and Wilson in Nevada and the San Domingo pegmatite project in Arizona.

“We have our pegmatites, brines and sedimentary clay assets comprising all three lithium types, which is very unusual for a junior. I think we’re unique in that sense,” said FitzRoy.

“We are developing all these assets at the same time.”

Bradda Head is also drilling at Wikieup and plans to drill at San Domingo in June. It is currently undertaking 3D modelling the San Domingo pegmatite district using historical drilling data and 2021 geophysics.

FitzRoy said the company remained fully funded to complete its work program for 2022.

It raised £6.2 million via its IPO in July last year, and in December, signed a royalty agreement with Lithium Royalty Corporation raising US$10.5 million.

To date, it has received US$2.5 million through a private placement with LRC and a US$500,000 initial payment on the royalty. “The following two royalty payments will come on resource expansion. So, when we get 1 million tonnes of LCE, we get another US$2.5 million. And then when we get to 2.5 million tonnes of LCE, we get another US$3 million.

“So, when we expand our resources, we’ll get the rest of the royalty payments. So that keeps us keeps us honest. We’ve got a very exciting year in front of us,” said FitzRoy.

At 14.88p per share, Bradda Head’s London-quoted equity is up nearly 160%, which gives it a market capitalization of £47.22 million ($77.38 million).