Premier1 Lithium (ASX:PLC) is switching its focus to gold and copper following a strategic review of its assets, brought on by a “subdued” lithium sector.
The company stressed that lithium remains a long-term focus, but added that the “considerable” exploration potential for gold and copper across its existing portfolio presents an “immediate opportunity” to prioritise spending outside of the lithium market.
lithium prices have fallen more than 80% over the last year, largely due to overproduction from China and a drop in demand for electric vehicles, prompting a number of lithium-focused companies to change tack.
Formerly known as SensOre, Premier1’s share price has fallen more than 98% since it listed in February 2022 at an issue price of $0.85. As of Wednesday’s close, the company was trading at $0.01 a share.
Lithium carbonate is currently sitting at US$10,346 ($15,150) per tonne, according to benchmark Minerals.
Conversely, gold prices have been booming, climbing some 27% so far this year to a current price of US$2,657.
In an announcement this morning, Premier1 says historical drilling — particularly at its Yalgoo Project in Western Australia — shows high-grade gold mineralisation that has been largely overlooked for the past 20 years.
Those results include 5m @ 5.1 grams per tonne (g/t) gold, and 10m @ 6.4g/t gold, but Premier1 says the mineralisation identified to date remains open at depth and along strike. Such data points are considered crucial in guiding current and future exploration efforts.
Since Premier1 put its hooks into Yalgoo under a farm-in deal in May 2023 with Critica Limited (ASX:CRI) — then known as Venture Minerals — lithium exploration has been the sole focus. But previous exploration to the north of the project area, largely by Mount Kersey Mining between 1985 and 1989, revealed gold mineralisation associated with subvertical quartz veining.
Notably, this previous drilling was carried out almost exclusively on known gold mineralisation around historical workings from the early 20th century. The limited drilling outside these areas therefore presents a “compelling” target.
“With sporadic drill testing and an average drilling depth of only 46m, the Yalgoo Project is essentially unexplored at depth and along strike,” Premier1 boss Jason Froud says.
“Geological review work by our technical team has identified a number of walk-up drill targets with excellent potential to yield a substantial gold resource.
“Upon completion of our technical review, we intend to begin a fieldwork to test these targets and I look forward to a steady stream of newsflow going forward.”
Alongside the Yalgoo Project, Premier1 operates at the Yalgoo West, Abbotts North, and Montague lithium projects in Western Australia.
Separately, International Battery Metals (CSE:IBAT) said on Wednesday it would suspend operations at its modular direct lithium extraction plant until prices recovered.
Chinese battery giant CATL (SZSE:300750) has also suspended production at certain mines, while the world’s largest lithium miner Albemarle (NYSE:ALB) made a second round of cost cuts and laid off workers in August.
Piedmont Lithium (ASX:PLL) has also sought to preserve cash by withdrawing a loan application to fund mine development activities.
Write to Oliver Gray at Mining.com.au
Images: Premier1 Lithium
