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Lithium explorer Bradda Head (AIM:BHL) has updated its Mineral Resource Estimate for its Basin East project in Arizona. This has upgraded the size of the resource by 65%, in terms of lithium carbonate equivalent (LCE) tonnes.

In addition, a continuous higher grade internal layer has been identified with a grade of c. 1,300ppm Li in the upper part of the deposit. SRK, the highly regarded Independent geological consultants, have also identified a 1Mt to 6Mt LCE Exploration Target within the Basin Project district held by this lithium explorer.

Portfolio of lithium projects in North America

Bradda Head Lithium is a North America-focused lithium development group. It currently has interests in a variety of projects, the most advanced of which are in Central and Western Arizona: The Basin Project (Basin East Project, and the Basin West Project) and the Wikieup Project.

Shares in Bradda Head Lithium had been trending down since March when they hit a peak of 17.3p. Stock can now be obtained for as little as 8.6p at time of writing. This is still some way off the 52 week low of 5.5p.

Based on only 1,110m of 2021 drilling at its Basin East claim in Arizona, Bradda Head has added 120 kt of LCE to the original maiden Mineral Resource which previously totalled 185 kt LCE, for an updated total LCE content of 305 kt. The recent exploration drilling, and core logging has also identified a high-grade zone within the resource of 58 kt at c.1,300 ppm Li. This has significant benefit for the company in identifying and locating the next round of drilling targets.

Greater confidence in Basin East project

The 2021 drilling programme (three out of the 10 holes were twinned holes) has given SRK greater confidence in the estimate at Basin East. The previous MRE was contained entirely within the Inferred Mineral Resource category and now c. 23% of the updated LCE content is in the Indicated Mineral Resource category.

It’s important to note that some 75% of the updated total LCE is in the Upper Clay which has a grade of c.850 ppm and c.20% of the updated total LCE sits within a newly defined High-Grade layer within the Upper Clay which has a grade of c.1,300ppm Li.

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

Bradda Head seeking 120 drill hole permits

The BHL team’s exploration plan was designed to extract maximum value from funds raised at pre-IPO. They said yesterday that the decision to focus initial drilling on the already permitted Basin East asset has proven to be “hugely beneficial” at demonstrating the Mineral Resource growth potential, and the speed with which this has been achieved is down to the team on the ground, especially considering rig and lab shortages in the US.

Bradda Head has now generated a Mineral Resource of 305 kt of LCE, and says it expects to continue adding to the resource base as exploration work continues.

Bradda Head is currently in the process of obtaining permits for 120 holes at BEE, of which it expects to drill 20 holes in Q2 2022. It has also applied for permits to drill 10 holes at its BN Claim, and management said yesterday that it anticipates that drilling will commence in Q2 2022. The difference in the scale of the programmes is that BEE is a state lease, whereas BN is a Bureau of Land Management (BLM) claim.

Fraud investigation

Bradda Head also said that it has been victim of a sophisticated electronic wire impersonation fraud and is in the process of pursuing recovery of US$600,000 paid to an unidentified party. Pending recovery of misappropriated funds, the company advanced a further U$600,000 to exercise its Cheto option as previously announced, and the transfer of the relevant permits is in the process of being completed in good order by the Arizona State Land Department.

According to a report from external IT security consultants the fraudulent payment was made after a third-party illegally breached and accessed the IT systems of counterparties to the transaction. All relevant law enforcement agencies have been notified and the matter is currently the subject of an active investigation.

Related

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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