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. Recently, the Company announced high lithium values from its geochemical sampling program on the project.
Today, Lancaster Resources announced it is expanding its lithium exploration to Quebec’s James Bay region. Lancaster announced it has entered into a binding letter of intent dated July 23rd 2023 to acquire 100% of the Trans-Taiga Lithium Project in the Eeyou Istchee James Bay region of Quebec.
The Property hosts several historical pegmatite samples and lies 120 km west of Patriot Battery Metals’ Corvette Project, 74 km west of Winsome Resources’ Cancet Project, and east of Loyal Lithium’s Brisk Lithium Project. Patriot’s Corvette Project has reported lithium grades up to 5.10% lithium oxide. Winsome’s Cancet Project has reported grades of up to 5.6% lithium oxide. Meanwhile Loyal Lithium’s Brisk Project with six separate claims reported that block 1, which is just located a few kilometers west of the Trans-Taiga Property, holds the greatest lithium potential.
The Property covers 1,432 hectares and is located along the boundary between La Grande and Opinaca Subprovinces. These Subprovince boundaries are usually delineated by deep-rooted crustal features filled by intrusives including pegmatites. The Property is located approximately 105 km east of the junction with the year-round James Bay Road providing year-round access. Hydroelectric transmission lines transect the Property.
Eeyou Istchee James Bay is rapidly becoming one of Canada’s leading lithium districts, boasting ten advanced projects and multiple early-stage discoveries. The Whabouchi mine is one of the largest lithium deposits worldwide, with a Mineral Resource measuring 36.6 Mt at 1.3% Li2O.
With the acquisition of this Property, Lancaster Resources diversifies its exploration portfolio. The Company’s focus expands from its existing lithium brine exploration at the Alkali Flat Project in New Mexico to include hard rock lithium exploration in Quebec’s James Bay region.
Lancaster plans to embark on an exploration campaign on the Property with a goal to identify lithium-rich areas, construct detailed geological maps, and evaluate the lithium content through sampling.
The agreement grants Lancaster an exclusive option to acquire 100% ownership of the Trans-Taiga Lithium Project from a group that includes Bounty Gold Corp. and Last Resort Resources. To exercise the option, payments totaling $115,000 are payable as follows:
- Royalty: The agreement includes a 2% net smelter returns royalty, of which 1% can be bought back by the Optionors for $1,000,000;
- Milestone Payments: Lancaster agrees to make the following additional payments:
- $50,000 fee if exploration results yield a minimum of 10 contiguous meters of lithium with values of 1% or more;
- $1,000,000 if Lancaster publishes a 43-101 technical report for a resource of not less than 5 million tons with 1% lithium concentration; and
- Long Form Agreement: the parties will negotiate to enter into a long form agreement to replace the Agreement within the next 30 calendar days.
The stock is up 3.33% at time of writing on today’s news. The company sits at a market cap of around $6 million.
The stock hit lows of $0.16, but with a further breakdown, Lancaster Resources has printed new all time record lows at $0.15. The question going forward is whether the selling pressure will exhaust and when. From a technical analysis perspective, this leads to the beginning of a new trend.
From a fundamental perspective, we have upcoming catalysts this summer including the phase 1 seismic program in late summer. From a technical perspective, we would want to see either the development of a range indicating that selling pressure has exhausted. From a price point perspective, a close back above $0.16 is key as this is the current resistance (price ceiling) for the stock. A failure to close above this price level could lead to further sell off. A close above $0.17 is what could get the stock to print some upside momentum as this would be taking out the current lower high.
