Fin Resources (ASX: FIN) shares are up 82% on a lithium find. Although that’s still a bit premature actually, FIN shares are up on finding abundant evidence of spodumene, the mineral that often contains lithium. So to state that there’s a large lithium find here would be a bit premature. They’ve found the right type of rock, within which is the right type of mineral. It remains to be seen whether that mineral contains appreciable lithium. The odds are good, obviously, but it’s not certain as yet.
The actual announcement: “Large, up to 30cm long green spodumene crystals, trace lepidolite, coarse muscovite, tourmaline, blue-green beryl, coarse red garnets and megacrystic feldspars were mapped within one of the pegmatite outcrops. Lichen cover over a number of the outcrops made it difficult to identify some minerals, textures and megacryst grain sizes. However, all outcrops were mapped as hosting megacrystic feldspar crystals over 15 cm in length and pockets of coarse quartz zones. Spodumene samples were confirmed by Raman Spectroscopy at Saint Mary’s University in Halifax, Nova Scotia and will be subsequently then sent to ALS Val D'Or for Lithium assaying.”
As we say, odds are good but not certain. For there definitely are spodumenes that do not contain economic lithium resources.
Fin Resources share price from Google Finance
As can be seen some of the excitement of the announcement has already come off the share price. For everyone else does also know that this is not proof of an economic find yet. It is just one of those steps that makes it more likely.
We should also point out that we’re bear lithium generally. So much is being found that we expect the bulk or commercial price to continue falling - it’s down 75% over the psat year as it is. So the scarcity value of another lithium find we expect to continue to decline - essentially on the grounds that so many people keep finding more lithium.
Of course this also interacts with a lithium find still having some value - as here with Fin Resources. A small exploration company does rise in value by gaining a find. But that scarcity value is dropping, even as the value to a small explorer can still be large in percentage terms.
The next big price point is going to be when the analysis of those crystals comes back. Some weeks we would expect, possibly a couple of months so backed up are the labs. Look for LiO2 levels substantially above 1%.
