Seasoned junior resource investors know, success comes not so much from what you mine, but where you mine it. Like real estate, it’s all about location, location, location.
Victory Resources (CSE:VR) (FWB:VR61) (OTC:VRCFF) has strengthened its lithium portfolio with the addition of two new properties in Quebec, that are adjacent to Patriot Battery Metals’ (CSE:PMET) Corvette lithium discoveries.
The staked properties are known as Stingray I and II. Stingray I consists of four claims totaling 204 hectares extending directly from the south property line of the Corvette project, with Stingray II comprising 40 claims of 2,041 hectares situated south and southwest of Corvette.
As mentioned, exploration is all about location, so it is noteworthy that Victory’s neighbor, Patriot Battery Metals, has done extremely well this year on the back of positive drill results from Corvette.
The company’s share price grew nearly 6-fold between mid-March, when it was trading at $0.73, and $4.36 on May 30, an all-time high.
On May 24, 2022 the stock rose 18% after reporting good lithium grades in the first drill hole to test the pegmatite, a known host rock for lithium. Among the highlights were 3.01% lithium oxide (Li2O) and 160 parts per million (ppm) tantalum pentoxide (Pa2O5) over 40.7m, within a wider zone of 2.2% Li2O and 147 ppm Ta2O5 over 70.1m.
The interval included nine samples assaying more than 4% Li2O to a peak of 6.35% Li2O over 0.92m, and five samples assaying over 400 ppm Ta2O5 up to 1,120 ppm Ta2O5 over 1m.
PMET’s news release dated June 23 reported assays from its 2022 winter drill program, including Corvette’s best intercept to date — 1.22% Li20 and 138 ppm Ta205 over 152.8m and 1.45% Li20 and 177 ppm Ta205 over 84m. Lithium-mineralized pegmatite was traced over a strike length of about 1.4 km and remains open in all directions.
Victory, meanwhile, says it’s in the process of developing a work plan for Stingray I and II.
“We are excited to add this property to the Victory portfolio, our exploration team is pursuing lithium properties in both Canada and USA currently, and this region, specifically noting the adjacent Corvette property, has delivered strong lithium findings,” said Mark Ireton, Victory’s President and CEO, in news dated July 5.
He added that the team is continuing its work to identify, analyze and acquire lithium-rich properties in areas of interest as the global demand for lithium is forecast to be six times greater than today by 2030.
Victory’s Quebec lithium property news comes just over a month after the junior acquired the Georgia Bay lithium project in Thunder Bay, Ontario. The under-explored property is adjacent to Rock Tech’s Georgia Lake lithium deposit. The surrounding Georgia Lithium District has a proven track record of economic lithium deposits dating back to the 1950’s. Rock Tech is reportedly building a lithium processing facility in Thunder Bay, to be online in early 2024, which with Ontario government help will support mineral processing from other nearby lithium mines.
On top of this, Victory at the end of May announced positive results from phase one drilling at Smokey in Nevada, the highlight being hole 9, which returned up to 1,270 ppm, and key lithium-bearing sections averaging up to 857 ppm.
The company said the drilling also provided valuable information for locating the extent of the deeply buried lithium clays, and has guided additional staking efforts, based on its geological model of the deposit.
The Smokey lithium property lies approximately 35 km north of Clayton Valley, NV, adjacent to and possibly on trend with the Clayton North project (930 ppm) held by Australia’s Jindalee Resources.
Farther away, Noram’s Zeus lithium project (900 ppm) is about 25 km to the southeast, while 35 km to the northeast is American Lithium’s flagship Tonopah Lithium Claims property (1,000 ppm).
In this prolific lithium region, Victory’s Smokey project totals 350 claims covering 7,000 acres with excellent access and relatively flat ground.
The property shares similar geological settings to the Clayton Valley and the many exploration projects nearby. It is located in the Walker Lane trend on the western margin of the Basin and Range provinces.
The property’s geology consists of Miocene – Pliocene tuff deposits, claystones and siliciclastic beds (Esmeralda Formation) with overlying younger alluvium deposits and desert pavement formation. The claystone, which can carry high lithium concentrations, is observed as highly weathered light grey to tan mounds of unconsolidated clay from 0.10m to 1.50m thick.
The flat-lying nature of the claystones, together with the frequent occurrence of transported cover, requires drilling to fully assess the Smokey project’s lithium potential as indicated by last summer’s surface sampling, which returned values up to 630 ppm Li.
Victory’s exploration team has identified several drill targets that will determine whether there is a relationship between its project and the adjacent Jindalee property.
After obtaining a drill permit in December, the company embarked on a 15-hole drill program, with the initial three holes aimed at testing along the Jindalee boundary margins, nearest to the fault line.
The remaining 12 holes will be utilized for locating extensions of the clay mineralization, testing depths of clays and overburden, and ultimately, providing data for resource modeling and follow-up drilling.
The first hole was completed to a depth of 417 feet, and upon visual results, supported management’s theory that the down-dropped clay presents an opportunity to locate the lithium clays “buried at depth”.
These deep deposits are thought to be preserved from surface erosion, which helps to maintain grade and thickness, Victory says.
As mentioned, the best results came from hole 9, which ended in mineralization at 417 feet. You can see from the table below that the grades get better with depth.
Between 325 and 417 feet, lithium values ranged from 240 to 1,270 ppm, and averaged 640 ppm. From 373 to 409 feet, the average lithium value was 857 ppm. The highest sample interval, @ 1,270 ppm, was found at an interval between 377 and 381 feet.
Hole 5 did not encounter significantly enriched lithium, however the hole was still valuable in that it was drilled on the dropped-down side of the northeast-southwest striking fault, which is thought to have displaced the lithium-bearing section deeper than hole 5 reached.
Hole 15 intersected 312 feet of poorly consolidated sands and sandy conglomerates. The hole failed to reach the target zone, which is now believed to occur at deeper levels, again due to the down-dropping nature of the fault.
Nevada and Canada-focused Victory Resources is our top pick in the lithium space.
Despite an economic slowdown in China, demand for lithium is expected to outstrip supply in the long-term, leading to a shortage of the metal that is crucial for lithium-ion batteries — used in electric vehicles, grid-scale energy storage and a plethora of consumer applications ranging from smart phones to hand-held power tools.
According to Benchmark Mineral Intelligence, to meet demand, the global lithium industry needs up to $42 billion of investment by the end of the decade. This works out to $7 billion each year from now until 2028, helping it to meet predicted demand of 2-4 million tonnes per annum by 2030, which is four times higher than the 600,000 tonnes of lithium expected to be produced in 2022.
Bloomberg notes the forecast, from a recent BMI report, comes as Europe and North America look to reduce their dependency on Chinese lithium imports and try to develop their own lithium production. Victory Resources is well-positioned, with three lithium properties in the mining-friendly jurisdictions of Nevada, Ontario and Quebec.
Victory Resources Corp.
(CSE:VR) (FWB:VR61) (OTC:VRCFF)
Shares Outstanding 110.2m
Market cap Cdn$3.4m
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