Jindalee Resources (JRL.AX) has released an updated resource estimate on its McDermitt Lithium project in Oregon. The project currently contains 1.43 billion tonnes of rock at an average grade of 1,320 ppm Lithium for a total of 10.1 million tonnes of LCE (using a cutoff grade of 1,000 ppm Lithium).
This makes the McDermitt project the largest lithium project in the United States and there’s additional potential to add to the current resource base as Jindalee has defined an additional exploration target of 1.3 to 2.3 billion tonnes at an average grade of 1,100-1,500 ppm Lithium. Additionally, the recent infill drill campaign has increased the confidence in the geological structures and grade continuity at McDermitt (which helped to already establish an indicated resource of 233 million tonnes), and the next step for the project will be a first scoping study which should be completed this quarter.
The size of the project is good, the grade is acceptable, but the main issue with McDermitt is its location: in Oregon. The state of Oregon hasn’t exactly been one of the most permitting-friendly states so we would expect Jindalee to have to jump through some hoops there. An interesting call option on the US lithium sector but for now, the project location still makes the Nevada-based lithium projects like Clayton Valley owned by Cypress Development (CYP.V) and the Lithium Americas-owned (LAC, LAC.TO) Thacker Pass more interesting than an Oregon-based project. We will keep an eye on Jindalee and while the project seems to make sense, the permitting process may be a bit tougher than anticipated.
Disclosure: The author has no position in Jindalee Resources, a long position in Cypress Development and sold put options on Lithium Americas. Cypress Development is a sponsor of the website. Please read our disclaimer.