The much-anticipated results of a geophysical survey at LIBERTY ONE LITHIU COM NPV (OTCMKTS:LRTTF)’s Pocitos West property in Argentina are out.
Regular readers will recall that in our last coverage of LRTTF, which you can find here, we stated that the results of the geophysical survey would be a very good catalyst for the stock.
In today’s piece, we’ll tell you what the survey turned up and what we see happening to the stock from now on. More details on this in a moment, but first have a look at the recent share price action.
For the sake of our readers who are getting to know LRTTF for the first time, here’s a brief review of the company’s business model.
LRTTF is an international exploration company based in Canada. The company is focused on acquiring and developing high-grade lithium brine deposits. LRTTF’s international team is comprised of renowned technical experts that have focused on lithium for decades. The management of the company is also focused on ensuring that the company is well-capitalized and consistently creating value for shareholders.
Geophysical survey at Pocitos West property turned positive results
On August 17, LRTTF released the much-anticipated report of the geophysical survey at its Pocitos West property in Argentina – and it was a pleasant surprise. The company announced that the survey was able to detect a probable brine horizon that extends throughout the entire 29 km length of its Pocitos West property.
What does this mean? In simple terms, the report suggests potential existence of lithium beneath much of LRTTF’s 160 km2 licensed mining area at the Pocitos West property. This exceeds expectations. And there’s more good news. Lithium deposit within LRTTF’s licensed mining area could be significantly huge as the survey report also indicated that the brine horizon is as much as 150 meters thick in several target locations.
LRTTF carried out the geophysical survey at its Pocitos West property through its partner Millennial Lithium Corp.
Commenting on the compelling outcome of the geophysical survey, Brad Nichol, the CEO of LRTTF, stated:
“We had hoped to find ‘sweet spots’ within our tenement, but were delighted to learn the entire length of our property may contain brine; and correspondingly, lithium. The results, and proximity on-trend to known lithium brine production 25 km to the north of our holdings, suggests the potential for the continuation of lithium brine beneath much of our property.”
The next step after obtaining the positive geophysical survey results is to further evaluate the property. The evaluation of the property would include brine sampling so as to better understand the chemistry, lithology, permeability and porosity. To undertake this program of further evaluating the Pocitos West property, LRTTF needs to obtain certain permits, and the company has already applied for the prerequisite documents.
On September 19, LRTTF announced that it has already developed an operational plan and that its operators are ready to hit the road immediately the permits are granted. The evaluation program that LRTTF has proposed is expected to include a production-scale pumping test. LRTTF intends to drill up to 11 test holes. If everything goes as expected, the company should commence drilling operations at its Pocitos West property in the four quarter of 2017 (4Q17).
How will LRTTF financing drilling at the Pocitos West property?
When small cap companies like LRTTF are undertaking huge projects, it is common for investors to ask about fundraising and its possible implications. Usually, the concern is whether the projects can lead to dilution of the stock to raise additional capital or lead to potentially toxic financing deals. In the case of LRTTF, we see none of these risks. And that is not us saying. Here’s what the company’s CEO, Brad Nichol, stated in the latest update:
“We have immediately undertaken the required actions to obtain all of the necessary permits so that we can commence drilling as soon as possible. It’s also worth noting that the drill program is fully funded with cash reserves already in our treasury.”
Now you have it. And just to add to this, the Pocitos West property is based in the heart of the famous “Lithium Triangle” and it is located within 25 km of several lithium producers. The ideal situation of property allows for low-cost lithium brine production. Furthermore, the Pocitos West property is adjacent to substantive infrastructure as well as a skilled, experienced labor force.
We look forward to LRTTF’s update regarding its permits application to commence drilling at the Pocitos West property. In the meantime, we see the compelling geophysical survey results continuing to draw more buyers into LRTTF, especially considering that the risk of stock dilution to fund drilling is not there since the company has adequate cash to carry on with the program.
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Image courtesy of European Space Agency via Flickr
Disclosure: We have no position in LRTTF and have not been compensated for this article.