Pure Resources (ASX: PR1) is up 41% on their report of finding lithium at their drilling in Sweden. Given that PR1 market capitalisation is $6 million and change - it’s a real tiddler - this might well be an appropriate response too. For even the sniff of lithium will add value to something that small. However, it would be rather easy to get too, too, excited by this. For the lithium found is not in the more normal spodumene but in a mica associated. Which produces potential problems.
The announcement: “Significant results from LIBS analysis up to 11.69% Li (JARR037) received during recent site visit to Järkvissle nr 100, situated in the Västernorrland region of Sweden, which hosts the country’s largest Lithium deposits.” Well, yes, although this is surface work only so far. And the actual known spodumene occurrences are off the claim. “The reconnaissance mapping discovered the extensive presence of highly fractionated muscovite-rich pegmatites with LIBS analysis successfully confirming the presence of pathfinder minerals triphylite-lithiophilite, cassiterite and potentially zinnwaldite. A peak LIBS assay from a triphylite-lithiophilite sample returned a result of 11.69% lithium (Li).”
No, that is good, yes that does add value to an explorer of this size.
Pure Resources share price from Google Finance
However, we have seen problems in other places with lithium in non-traditional minerals. That zinnwaldite for example. Both European Metals and Zinnwald Lithium are looking to mine that. And while they claim (both, European and Zinnwald) to have an extraction method not a great deal has happened since then.
New processing methods for different minerals always worry financiers - and thus miners. For it’s only when you’ve built the first full sized plant that you really know whether this new process really works as advertised. Sure, lab bench work, pilot plants, but many an operation has come to grief simply because everything doesn’t, quite and wholly, scale up.
Yes, sure, finding lithium adds value at Pure Resources. But this is largely because it’s such a small company to start with.
