Loyal Lithium (ASX: LLI) shares are up 50% today. LLI shares jumped on the back of a report about finding rock at that Trieste site. Yes, saying they’ve found “rock” is to belittle it but it’s also to be fair and reasonable. Because that’s what the announcement is - they’ve found rock. You do need to find rock if you want to go hard rock mining, you need to find the right sort of rock for the mineral you’re looking for, the mineral has to be in the rock, the mineral has to contain your target element and there has to be enough of it to make it worth mining. With Loyal Lithium we’re somewhere at the beginning of that process.
The announcement: “Loyal Lithium is excited to announce a significant development in the ongoing field program at the Trieste Lithium Project, with the discovery of five spodumene bearing pegmatite dykes. The five spodumene bearing pegmatite dykes, with aligned implied continuous outcrops, have been identified within a 6 km2area to the south of the Trieste Greenstone Belt, situated in a metasediment host – leaving several high value greenstone targets yet to be explored. Preparation for drilling activities will now commence with the existing in-field team from Dahrouge Geological Consulting (DGC) increasing to 19 field crew.”
So, they’ve found rock, the right sort of rock, the pegmatites, and the right mineral, the spodumene. Not all spodumene contains lithium, of that which does not all contains economic amounts and even then it depends upon the volume of such lithium containing spodumene there is. So, we’re still early in the exploration game here.
Loyal Lithium share price from Google Finance
We’ve looked before at Loyal Lithium: “Worth noting something that we keep saying about the lithium market. We expect the price to fall substantially over time. Yes, we know, EVs and electrifying the world. On the other hand there’s an awful lot of lithium out there and we expect the scarcity value of economic deposits to fade away. Still money to be made in mining, but not the vast margins current producers are making. Perhaps - at least that’s our analysis. And we can link this into Loyal Lithium. Because why was exploration stopped in 2018? Because that’s the last time the lithium price slumped after the last lithium price boom. Exactly the event that allowed Pilbara Minerals to buy up Altura.”
We do think this is important. The area was - lightly - explored before, in the last lithium boom. Which is that stark reminder that lithium does go through booms and, often enough, then busts. Lithium explores are therefore trading positions, not buy and hold investments.
