As surprising as Gold Trip’s win was in the Melbourne Cup last Tuesday, even Betr would not have bothered offering odds on lithium being the sharemarket winner over the past month.
Look no further than St George Mining, the aspiring battery metals player hoping to add a chunky lithium find to the high-grade nickel sulphide discoveries it has made at its flagship Mt Alexander project in Western Australia’s Goldfields.
St George (ASX: SGQ) shares closed at 7.8¢ on Friday night, their highest since just before Australia Day – so almost a year-high and, fittingly, on the back of the theme that has been providing all the excitement on the Australian bourse.
St George is not alone – and certainly not the pacesetter – among ASX stocks that are running hard on the back of soaring global demand for lithium.
As an aside, demand for lithium is so strong that Cannings Purple’s office has been visited by dealers acting for an Asian chemicals giant wanting to secure offtake from one of our firm’s lithium clients. Cannings Purple is all about value-adding services for clients though offtake negotiations are not yet part of our offering.
But back to the fuse that lit the rocket under St George’s share price – and provided an example of how lithium has captured investors’ imagination.
St George has for several years been diligently and systematically exploring its Mt Alexander project, west of Leonora. The work has paid off with four near-surface, high-grade nickel-copper-PGE sulphide discoveries and rising excitement about what might be at depth.
IGO (ASX: IGO), following its takeover of Western Areas earlier this year, is a 25 per cent partner in the key Mt Alexander tenement and watching closely given the discoveries’ proximity to its Cosmos mine near Leinster.
At the start of September, St George announced that field mapping and rock chip sampling at Mt Alexander had confirmed numerous outcropping pegmatite types. In total, 45 rock chip samples were sent off to the laboratory for assaying and the results have slowly returned to confirm some impressive grades – of up to 3.25 per cent Li2O.
St George was always planning more drilling at Mt Alexander to test the latest high-priority nickel targets. Lithium was quickly added to the drill agenda and today a reverse circulation (RC) campaign is underway and a round of diamond holes about to start.
The first RC holes have intersected thick intervals of pegmatite from surface and the St George team has logged visual lithium-bearing minerals.
It is an exciting time for St George and investors are onto it. St George shares have more than doubled from 3.7¢ a month ago.
Western Australia’s world-class hard-rock lithium potential is well-known though the spotlight has traditionally focused on the one-of-a-kind Greenbushes (where IGO is a participant) in the State’s South West, the Pilbara assets headlined by Wodgina (Mineral Resources, ASX: MIN) and Pilgangoora (Pilbara Minerals, ASX: PLS) and Mt Marion (MinRes again) in the southern Goldfields.
It took Liontown Resources (ASX: LTR) to put the northern Goldfields on the lithium map with its Kathleen Valley project near Leinster.
Kathleen Valley is a monster though not the first lithium asset Liontown has worked on – a few years ago, it sold a little project called Finniss, near Darwin in the Northern Territory, to a tiddler called Core Lithium (ASX: CXO). Today, Core is a $2.5 billion stock and on the verge of shipping first tonnes of DSO to confirm its status as Australia’s next lithium producer. Maiden volumes of spodumene concentrate are expected in the first half of next year.
Investors desperately want another lithium success like Core and Liontown. Goldfields newcomer Red Dirt Metals (ASX: RDT) thinks it is next in line based on the success of delineating a 12.7 million tonne mineral resource, grading 1.2 per cent Li2O, at its Mt Ida project.
The fact David Flanagan, who rose to fame fast-tracking Atlas Iron’s development as a boom-time iron ore miner a decade ago, took charge of Red Metals on Thursday says it all about the company’s aspirations.
The Mt Ida project is next to St George’s Mt Alexander. Further, St George believes the pegmatites on the Mt Alexander tenements are in a similar geological setting to the ones at Red Dirt’s Mt Ida.
So how has the market reacted to St George’s lithium push to complement the well-understood and well-received nickel exploration story?
Apart from the more-than-doubling of St George’s share price, about 297 million George shares – or 42 per cent of the issued capital – changed hands over the past month across 4065 individual trades.
Contrast that with the 12-month performance of 663 million shares traded across 11,464 transactions and it is easy to spot the pick-up in market interest since St George started putting first runs on the board of the Mt Alexander lithium story.
All that is needed now is for the RC and diamond drilling to crack a few boundaries to really light up the Mt Alexander scoreboard.