Lancaster Resources (LCR.C) is a junior explorer focusing on transition metals to take advantage of the global shift towards decarbonization and electrification. The goal is to produce climate-positive lithium. The current focus is on its Alkali Flat Project, located in southwestern (and mining friendly) New Mexico, USA, within the Animas Valley.
The project’s proximity to major transport routes, including being approximately 160 miles east of Tucson, Arizona, and 175 miles west of El Paso, Texas, via the Interstate 10 highway which runs through the project area, makes access and logistic operations optimal for exploration and eventual production.
The Alkali Flat project boasts a sizable land package with 233 claims but its prospective value is highlighted by competitors’ claims adjacent to Lancaster Lithium’s project, indicating a highly sought-after area rich in lithium resources. This value is backed up by extensive research data, including regional magnetic and gravity geophysical surveys and geochemical databases procured by the U.S. Geological Survey.
Today, the company reported results from its geochemical sampling program on the project. These samples were taken in March 2023 to assess lithium and lithium pathfinder elements distribution on the property.
The geochemical results of lithium values in the 143 sediment samples taken ranged from 69.6 ppm Li to 149.5 ppm Li, and the Mean was 113.8 ppm Li. This indicates several zones of notably high lithium concentrations in the northern and eastern part of the property. These results line up with the analysis reported by Arizona Lithium from its adjacent Lordsburg Lithium project.
The source of the lithium has not yet been determined, but potential sources have been identified in the project area:
1. Eruptive volcanic rocks associated with the Steins caldera dated at 34.4 Ma (million years before present) and the Muir caldera eruptive center near Lordsburg, New Mexico dated at 35.3 million years;
2. Alkaline intrusive rock formations and associated pegmatites in the area near Lordsburg; and
3. Geothermal groundwater system at the Lightning Dock KGRA (Known Geothermal Resource Area) located six miles south of Alkali Flat.
“We are following up these strong results with seismic surveys to cover the anomalous area with a goal to select initial drill targets and brine sampling programs this summer,” says Andrew Watson, P.Eng, Lancaster Resources’ Vice President of Engineering and Operations.
A total of 143 sediment samples were obtained to assess the distribution of lithium and other elements in the near surface sediments of the property. These were collected by drilling between 10-20 inches below the surface. Samples were collected at intervals of 1,200 feet (366 m) on lines oriented east-west. The east-west lines were spaced 2,400 feet (732 m) apart from north to south.
The maximum lithium value obtained from sediments at Alkali Flat, at 149.5 ppm Li, would be the 4th highest sample in the southern New Mexico regional sample database of 3,487 sediment samples published under the U.S. Geological Survey Hydrogeochemical and Stream Sediment Reconnaissance program.
Rodney Blakestad, a Qualified Person under NI 43-101, noted, “the results from the initial geochemical sampling provides strong support that the property is an excellent target for exploration of a lithium brine deposit. The size and strength of the Lithium anomalous sediments at the Alkali Flat Lithium Project is particularly exceptional as they are among the highest values of lithium in sediment samples ever reported in New Mexico, USA and appear to be analogous to Clayton Valley while in a more geologically mature playa setting.”
A phase 1 seismic program in late summer followed up by an initial drill program aims to confirm the subsurface brine aquifers and geology. If the surface sediment geochemistry is representative of the subsurface, there could be substantial lithium brine reserves in the subsurface aquifer with a direct analogy being the brine deposits of Clayton Valley. Clayton Valley hosts the only significant lithium mine in North America, known as the Albemarle Silver Peak in Nevada which was recently acquired by Albemarle Corporation for $6.2 billion.
Lancaster Resources has an option to acquire a 100% interest in the Alkali Flat Lithium Project. Lancaster has fulfilled its option payment obligations through to December 2024.
For more on this tightly coiled ESG lithium play, be sure to check out Chris Parry’s deep dive here.
The stock recently printed new all time record lows hitting $0.16, but has since bounced from those lows. The stock is currently trading at $0.185. From a technical analysis take, once a stock prints new record lows in a downtrend, there will be a point when the selling pressure exhausts. Simply put, the trend will end and a new trend will begin.
Is a new uptrend about to begin? From a fundamental perspective, we have upcoming catalysts this summer including the phase 1 seismic program in late summer. The technicals indicate the possibility of a double bottom (“W” shape) pattern here which is a high probability reversal pattern. The previous lower high, printed at $0.18 has been taken out with a move to $0.185. A strong daily close above this zone is what bulls should watch for.
