This article is a sponsored feature from Mining.com.au partner Astute Metals NL. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Astute Metals’ (ASX:ASE) Red Mountain Lithium Project in Nevada has shown early indications of its potential to rival some of the biggest lithium projects in North America.
But grade is what will set it apart from most other clay projects in the US state, according to CEO Matthew Healy.
In maiden diamond drilling completed at Red Mountain at the end of last year, Astute identified a new zone of high-grade mineralisation in hole RMDD001.
RMDD001 had one of the highest single drill sample assays observed so far of 1.5m @ 3,070 parts per million (ppm) lithium from 86.9m.
Additionally, mineralisation was extended 375m north in hole RMDD002, which is now the northernmost intersection at the project.
This drill hole returned a top hit of 86.9m @ 1,470ppm lithium from 18.3m, including an internal high-grade zone of 32.1m @ 2,050ppm lithium.
“It means a couple of things. Number one, there is high-grade mineralisation out there that we haven’t intersected yet, and it is entirely possible the best is yet to come,” Healy tells Mining.com.au.
“Secondly, we think that the grade of lithium intercepts we have been getting at Red Mountain is going to set the project apart from most of the other clay projects in the state.”
Maiden diamond drilling culminated in the definition of a two-part exploration target in mid-February of 1.136 billion tonnes to 1.515 billion tonnes @ 785ppm to 1,328ppm for 4.7 million tonnes to 10.7 million tonnes of lithium carbonate equivalent (LCE).
Target A, which comprises 796 million tonnes to 1.061 billion tonnes @ 780ppm to 1,470ppm for 3.3 million tonnes to 8.3 million tonnes of LCE, is the focus of an upcoming exploration drilling program.
Target B, which comprises 341 million tonnes to 454 million tonnes @ 799ppm to 997ppm for 1.4 million tonnes to 2.4 million tonnes of LCE, will undergo further surface sampling before drilling.
Positioning Red Mountain for rapid growth
Chairman Tony Leibowitz said at the time the exploration target was announced that it shows the scope to rapidly drill out a substantial part of Red Mountain which Astute believes “could rival some of the biggest lithium projects in North America”.
The company’s aspirational goal is to define one of the top four lithium clay projects in the US.
Typical lithium projects in Nevada host resources between 218 million tonnes and 5.5 billion tonnes at an average grade of between 620ppm and 2,956ppm.
Surge Battery Metals’ (CVE:NILI) Nevada North Project is the highest grade at 2,956ppm.
Lithium Americas’ (TSX:LAC) Thacker Pass mine, which is currently in the Feasibility Study stage, is the most advanced and has an average resource grade of 2,230ppm and an average reserve grade of 2,540ppm.
Thacker Pass is planned to be ramped up in four stages targeting an initial 40,000 tonnes per annum and ramping up each year by a further 40,000 tonnes until it hits annual production of 160,000 tonnes of battery quality lithium carbonate.
In October 2024, Lithium Americas locked in a C$625 million ($693.5 million) investment agreement with automotive giant General Motors to establish a joint venture for the purpose of funding, developing, constructing and operating Thacker Pass.
Like Thacker Pass, Red Mountain is a clay-hosted lithium deposit, which is a sedimentary deposit where lithium is hosted within clay minerals.
Advantages of these deposits include being near-surface, generally flat-lying and having simple stratigraphy.
They are also much softer than their hard-rock pegmatite counterparts, which should enable mining with very low strip ratios and without the need for high-cost drilling and blasting during extraction.
Lithium clay projects provide a low-cost pathway to a battery product and can produce battery-grade lithium carbonate at the mine.
These mines are also long life assets, with Thacker Pass estimated to sustain production for up to 85 years.
US market growth favours domestic projects
Meanwhile, Nevada is a prime location for a lithium project, with the US Government focused on securing domestic supply of critical minerals, including lithium.
US President Donald Trump has begun implementing tariffs on imports to the US from countries such as Mexico and Canada in a bid to encourage greater in-country production.
This is providing advantages for explorers in the region.
“It is only early days in the second Trump presidency, but we know from Executive Orders that there is a focus on improving permitting timeframes and shoring up domestic supply,” Healy says.
“With Red Mountain being located in the mining-friendly jurisdiction of Nevada, the project is well-placed to advance quickly with these tail winds.”
Astute plans to be back on the ground as soon as the Nevada winter is over and straight into further diamond drilling.
“We have seen the best grades of lithium intersected to date at the project, and the thickest intersection so far,” Healy says.
“When you take these results into account with existing intersections, we now have intersected lithium in every hole over a 5km strike of the project. These results bode very well for future drilling at the project.”
Healy says Astute will likely undertake a second drilling campaign at Red Mountain in the second half along with some further metallurgy work.
Astute has previously demonstrated in Scoping leach test work high lithium leachability of up to 98% depending on temperature, leach time and acid concentration.
The goal is to pave the way for an initial resource to be released in the final quarter of 2025.
While lithium has been in a downtrend for sometime due to significant oversupply, Fastmarkets predicts a 487% spike in demand for lithium in the US to 412,000 tonnes of lithium carbonate equivalent by 2030.
Jordan Roberts, battery raw materials analyst for Fastmarkets, says in tandem with demand growth is the enactment of the Inflation Reduction Act (IRA), which will have a material impact on evolving battery supply chain dynamics.
“The sourcing requirements to be eligible for tax credits offered under the IRA are expected to result in a price differential (premium) compared to other regions, which should be beneficial to lithium project development in the US,” he says.
Write to Angela East at Mining.com.au
Images: Mining.com.au & Astute Metals
