Metalicity (ASX: MCT, Share Price: $0.07, Market Cap: $32m) has a dual focus on both zinc and lithium. It has exposure to the large and advanced Admiral Bay zinc project in Western Australia, along with its more recent acquisition of prospective lithium-tantalum tenements in Western Australia’s Pilbara region, host to some of the world’s largest hard-rock lithium and tantalum projects.
Metalicity has advised that a 400-hole auger drilling program has commenced at its Lake Cowan project, targeting extensions to the Mount Belches-Bald Hill Pegmatite Belt. A northwest-striking pegmatite belt potentially up to 25km long and up to 4km wide in some areas, has been identified under shallow cover.
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Market Significance
Metalicity’s share price has firmed solidly from a 12-month low around $0.016 to a recent high of $0.102, as the market digests the significance of both its enlarged Admiral Bay zinc resource and looks forward to the results of the recently commenced Pre-feasibility Study (PFS), along with the potential introduction of a project joint venture partner. All this has taken place against a rapidly rising zinc price. Likewise the company’s expansion into lithium comes at a time of heightened interest in the sector. Metalicity’s flagship project area lies just 5km SW of high-flying Pilbara Minerals’ (ASX: PLS) Pilgangoora lithium project.
Announcement Detail – Lake Cowan Project
Metalicity has announced the commencement of a 400-hole auger drilling program at its Lake Cowan project in Western Australia, targeting extensions to the Mount Belches-Bald Hill Pegmatite Belt. The Lake Cowan Project is located immediately south of the Bald Hill Mine, owned and operated by Alliance Mineral Assets.
The auger program will be conducted on a nominal 100m x 400m spaced grid to vector toward any hidden pegmatites. This technique was successfully used to discover several hidden pegmatites by the previous owners of the Bald Hill Mine. This will be followed by a targeted RC drilling program.
Tawana Resources NL recently acquired an Option over three Exploration Licenses located north of the Bald Hill Tantalum Mine, where resource and exploration drilling is underway. Tawana has also acquired a further Option over all mineral rights, processing plant and infrastructure at the Bald Hill Operation.
Interestingly, recent wide-spaced resource drilling by Tawana has revealed that lithium grades are stronger to the south of the Bald Hill mine.
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Figure 1: Lake Cowan Project area over Regional Geology, showing trend of Mt Belches-Bald Hill Pegmatite Belt extending onto Metalicity’s tenement E15/1502
Technical Significance
The geology of the area is dominated by Archaean Mt Belches Formation metasedimentary units, intruded by granites and pegmatites. The pegmatites host tin, tantalum and lithium mineralisation. Previous work within the Mount Belches-Bald Hill pegmatite belt focussed on tantalum and tin with limited exploration for lithium.
A pegmatite belt striking in a northwest direction, potentially up to 25km long and with a width of up to 4km in some areas, has been identified under shallow cover. Recent mapping and rock-chip sampling has identified outcropping spodumene-bearing pegmatites – with assays up to 3.99% Li2O on an adjoining tenement to Metalicity’s granted tenements E15/1502 and E15/1503s.
During a recent field visit, outcropping pegmatites were observed within the area covered by Metalicity’s tenements. The pegmatite belt is interpreted to extend into the company’s tenement area under a shallow veneer of cover material that obscures much of the bedrock in the area – however outcropping pegmatite dikes were identified within an historical costean.
The Bald Hill area is rapidly becoming a prolific and near-term producing lithium district and Metalicity’s project area appears well situated along a highly prospective pegmatite belt. The advanced nature of adjoining infrastructure assets and significant off-take interest bodes well for the project.
Summary
We initiated coverage of Metalicity at a price around $0.025 during October 2015 – representing a current gain of around 180%.
The Bald Hill area is rapidly becoming a prolific and near-term producing lithium district and Metalicity’s project area appears well situated along a highly prospective pegmatite belt. The advanced nature of adjoining infrastructure assets and significant off-take interest bodes well for the project.
On the zinc side of things, Metalicity is essentially in the right place at the right time with respect to Admiral Bay. On a world scale, Australia is an ultra-safe place to do business from a sovereign risk perspective, an important consideration in terms of attracting the sorts of large-scale, longer-term investors that this massive project will require.
