Wildcat Resources (ASX: WC8) is up another 26% on their latest drilling results. WC8 shares have reacted positively, as they should, to the positive results. Note that we’re still not at the point that we can say, absolutely, that there’s an economic deposit of lithium there. But we gaining, brick by brick, that evidential wall that we require to show that there is. This is why Wildcat shares are up near 2,000% on the year. Many to most exploration activities end in failure - either finding nothing or not enough. The entire point of playing in the sector is to balance out those failures by also being in the successes.
The latest announcement: “Further broad, high-grade lithium intersections highlight the significant scale of the Tabba. Tabba Lithium Project and the potential for a Tier-1 lithium deposit at the Leia Pegmatite. Best results to date from Leia Pegmatite in the Central Cluster include: 85m at 1.5% Li2O from 133m (TARC128) (est. true width). Including 9m at 3.0% Li2O from 199m. And 13m at 2.3% Li2O from 136m”
Those are good results, there’s no doubt about it.
Wildcat Resources share price from Google Finance
This is not the first time we’ve looked at Wildcat Resources:”As we’ve said before about Wildcat Resources: “ The specific deal that WC8 did looks very good from the point of view of Wildcat shareholders. They took over the Tabba Tabba prospect in return for a share issue. Well, OK, Tabba Tabba might turn out to be a lovely lithium deposit and it might not. The odds are looking good that it will be decent but those are, still, odds. There's a great deal of proof that is still required before anyone can say with any certainty.” Previous exploration in the area did not even test for lithium - so out of fashion was lithium at that time. So, none of us know how much there might be there, whether there will prove to be an economic deposit or not. “
As above, this level of exploration is the building of the evidence that there’s an economic deposit there. First we need to find the right type of rock - pegmatites. Then show that the pegmatites contain spodumene. Then that the spodumene contains lithium. So, we’ve managed to get through all of those. The next stage is to show that there’s enough lithium bearing spodumene in the pegmatites to make it worth going actually mining. So, we’re now looking for the extent of the deposit, not so much the purity of it.
So Wildcat’s still not at the level of having proven to have something of value. But the odds are shortening that it has.
