Let’s be honest, right now there isn’t a broker in Canada that hasn’t put together a lithium exploration vehicle, which indicates not just that there’s a lot of interest in green energy, but also that it’s tough to show you’re serious in your efforts to build an actual company in that space.
Lancaster Resources (LCR.C) has been giving it a real shove on that second front over the past few months, doing work and showing their intent with ongoing news, and despite a few online naysayers assuming the worst, the fact remains the company is getting some traction the old fashioned way.
By doing the work.
A month ago they said they had an LOI to acquire a property called the Trans Taiga project. The market noticed, but LOIs come and go.
Today, the LOI went, and was replaced with a definitive agreement. LCR has gone post-LOI.
News Summary:
Overview:
- Company Details: Lancaster Resources Inc. (CSE:LCR, OTC Pink:LANRF, and FRA:6UF) announced the acquisition of the Trans Taiga Lithium Project on August 29, 2023.
- Location: The project is situated in the Eeyou Istchee James Bay region of Quebec. Its neighboring projects include Patriot Battery Metals’ (PMET.V) Corvette Project, Winsome Resources’ (WRSLF.Q) Cancet Project, and Loyal Lithium’s Brisk Lithium Project.
Acquisition Highlights:
- Property Details:
- Size: 1,432 hectares.
- Location: Boundary between La Grande and Opinaca Subprovinces.
- Geological Significance: Subprovince boundaries usually indicate deep-rooted crustal features filled by late-stage intrusives like pegmatites.
- Neighboring Projects:
- The Corvette Project boasts lithium grades up to 5.10% lithium oxide (Li 2 O).
- Winsome’s Cancet reports grades up to 5.6% Li 2 O.
- Loyal Lithium’s Brisk Project has six separate claim blocks. Block 1, in proximity to the Property, shows significant lithium potential.
- Eeyou Istchee James Bay Lithium District Breakdown: Recognized as a leading lithium hub with 10 advanced projects. The Whabouchi mine, located here, is the 7th largest lithium deposit globally.
- Geological Insight for the Tech Nerds:
- Confirmed presence of pegmatites on the Property.
- Documented mineral content features garnets, muscovite, and tourmaline, all found within a white pegmatite.
- Additionally, a distinctive graphic texture characterized by quartz-feldspar and sizable feldspar megacrysts is evident.
- Acquisition is Strategic and Diversifies Company: Lancaster’s acquisition diversifies its exploration ventures, expanding from lithium brine exploration in New Mexico to hard rock lithium exploration in Quebec. This move augments Lancaster’s exploratory capacity and geographical variety.
- Future Plans are Cheap Work: Lancaster’s proposed work program encompasses geophysical endeavors, intricate geological mapping, and evaluation of lithium concentration via sampling and geochemical studies.
- Property Accessibility is Legit: Year-round road access via Trans-Taiga Road and proximity to hydroelectric transmission lines (which can potentially reduce exploration costs) are notable features.
- Payment Commitments are Reasonable:
- Initial payment commitment: $115,000.
- Milestone payments contingent on exploration outcomes.
- A 2% net smelter returns (NSR) royalty is applicable, with options to reduce to 1%.
- Management Advisory: Management underscores that neighboring mineralization does not inherently suggest comparable mineralization on Lancaster’s properties.
So What Do We Think?
Dudes, I’m going to tell you this is a good strategic move. Having two oars in the water is a legitimatizing move for LCR, and while both projects will need exploration, geophysics won’t break the bank at all. This new property is bang in the middle of a lot of advanced work so there’s every reason to think the LCR ground might link up to those others, and the amount spent getting a hold of it doesn’t present a super amount of risk.
Now, there’s definitely a lot of work to be done between now and any future production potential, so don’t be jumping in expecting that Elon Musk or Toyota will be visiting next week, but we know lithium demand is going to run hard over the next many years, and at the low $5 million market cap seen on LCR right now, it won’t need to be in production to ramp up significantly; all it will need to do is show steady progress, which is what the company has shown to date.
That said, the smaller exploration companies can be bounced about on the whims of one or two large investors, so it’ll be interesteing to see if the insider hands get stronger on the back of this news. If they do, it’s a trade in the short term, with longer term being subject to what the company can do next to inspire more buying.
I’ll credit them with this being a good step in the right direction.
Also, the current market cap is absolutely fair for what they have, if maybe a little undervalued.
— Chris Parry
FULL DISCLOSURE: Lancaster is an Equity.Guru marketing client.
