(Sharecast News) - Bradda Head Lithium unveiled an updated mineral resource estimate for its Basin Project in Arizona on Thursday, having undergone an additional 2,355.2 metres of sonic drilling in 2023.
The AIM-traded company said that as a result, it had augmented its inferred mineral resource by 729,000 tonnes of lithium carbonate equivalent (LCE), taking the updated total inferred LCE content to an impressive one million tonnes.
It said the overall new mineral resource encompassed 17 million tonnes in the indicated category with a concentration of 940 parts per million, yielding 85,000 tonnes of LCE, and 210 million tonnes in the inferred category at 900 parts per million, providing one million tonnes of LCE.
Based on its gross overriding royalty agreement with the Lithium Royalty Company (LRC), Bradda Head had sought a payment of $2.5m as the new contained LCE tonnage surpassed the contract's threshold of one million tonnes.
It added that SRK Consulting UK had verified the relevant documentation.
The ongoing drilling successes at the Basin East Extension and Basin North further bolstered the company's confidence, with the board optimistic about hitting the subsequent milestone of 2.5 million tonnes of LCE in situ, which would entitle it to another $3m payment according to the royalty agreement.
SRK introduced a new cut-off grade of 550 parts of lithium per million to declare mineral resources, ensuring realistic prospects of eventual economic extraction.
Notably, that cut-off grade was higher than the previously reported 300 parts per million, effective as of 13 October 2022.
The new grade better mirrored the acknowledged metallurgical processing input parameters, Bradda Head claimed, considering the operating costs publicised by advanced projects in the same domain.
An impressive 30% increase was observed in the average in situ grade of the inferred Basin East mineral resource, shifting from 694 to 900 parts of lithium per million.
The results from the 2023 drilling programme showed extensive lateral continuity of the Basin East clay package and an exceptionally consistent stratigraphic position.
Notably, the Upper Clay Unit boasted a high-grade layer with an average grade of around 1,300 parts of lithium per million.
The upcoming phase of drilling was slated for early 2024 at Basin North, with an expansion programme also in the pipeline for 2024.
Bradda Head said it was obtaining permissions for an 80-hole programme at BWE and BW with the Bureau of Land Management (BLM), with high hopes for substantial resource growth.
"The increase in LCE at Basin East Extension and into Basin North highlights the impressive potential that we have always believed is inherent at the Basin Project," said chairman Ian Stalker.
"The total drilled area at Basin East/Basin East Extension/Basin North still only covers 2.5 square kilometres of our 41 square kilometre licence area at Basin and Wikieup.
"We believe that 2024 is going to be another exciting year of resource growth for Bradda Head, hopefully in both project areas - San Domingo Pegmatites and the Basin Clays."
Stalker said the firm remained well funded, even more so following the royalty payment.
"More drilling is already planned at Basin North and Basin West upon receipt of the environmental assessment (EA) from the BLM in the second half of 2024.
"The area we are permitting is over 11 square kilometres, which is considerably larger than BE, BEE, and BN combined.
"BHL is excellently placed to take full advantage of the near-term resource growth potential at our sedimentary lithium assets in Arizona."
The BHL team on site had done "a remarkable job", Ian Stalker said, adding that they had shown persistence in delineating the Basin Project to date.
"We have a compelling 12 months ahead with what we believe are a number of material catalysts, and we look forward to providing further updates in 2023, including our ongoing work at our San Domingo Pegmatite district as well as in 2024 in what we believe is going to be another exciting year of resource growth for Bradda both at San Domingo and Basin."
At 1536 BST, shares in Bradda Head Lithium were up 17.82% at 3.24p.
Reporting by Josh White for Sharecast.com.
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