Lithium System Up to 8 Kilometers Long Found at Ontario Project

Usha Resources Ltd. (USHA:TSX.V; USHAF:OTCQB) announced it has discovered a significant lithium-cesium-tantalum (LCT) system up to 8 kilometers in strike at its White Willow lithium project in Ontario.

The maiden geological work has been finished on just 5% of the more than 15,000-hectare project area. The company said it plans to return in July and complete a more comprehensive field program to build on the findings.

"Unlike most companies who have recently acquired properties in Ontario and Quebec with a focus on location, our acquisition of this project was predicated on a technical model that showed that the two initial pegmatites identified were part of a larger unexplored system waiting to be discovered," Chief Executive Officer Deepak Varshney said.

Technical analyst Clive Maund noted that Usha has strategic properties of rich mine sites and is focused "on the development of quality battery and precious metal properties that are drill-ready with high-upside and expansion potential."

Varshney said the company had identified 45 new pegmatites within a zone where spodumene was likely to occur and grown the strike and width of the system ten and 20 times in size, respectively.

"We believe Willow to be a flagship asset where we firmly believe Ontario's next major lithium discovery will occur," he said.

Usha recently announced it is resuming drilling at its flagship Jackpot Lake project in Nevada with a more powerful rig, allowing it to expand two holes to 2,000 feet to deliver a National Instrument 43-101 resource estimate.

Technical analyst Clive Maund of CliveMaund.com noted that Usha has strategic properties of rich mine sites and is focused "on the development of quality battery and precious metal properties that are drill-ready with high-upside and expansion potential," which makes it a safe bet for investors.

The Catalyst: Looking for Drill Targets

The company recently added five highly prospective Ontario prospects to its roster, executing options for the right to purchase 100% interest in the Lee Lake, Mead, Bluett, Gathering Lake, and Triangle Lake sites. Besides the White Willow project, it also has the Lost Basin project in Arizona.

Fieldwork activities at the Ontario projects this year include prospecting, mapping, and soil and visible outcrop sampling.

The primary target is identifying targets for a fall drilling program, especially at White Willow for its LCT system.

Jackpot Lake is "somewhat in its own 'world'" with a possible shallower and richer resource than other Nevada lithium projects, wrote Chris Temple, editor of The National Investor.

"Each of these projects offers considerable exploration upside, as they are situated in highly prospective geological settings known for hosting significant lithium mineralization," Varshney said.

Usha completed a two-week site visit at White Willow and took 217 rock samples that were submitted for laboratory analysis.

The company said 103 samples had anomalous lithium (more than 115 parts per million, or ppm), of which 45 were very anomalous (more than 300 ppm). Six samples assayed above 1,000 ppm, which is up to 0.5% LiO2.

Till and lake sediment surveys also identified highly anomalous lithium values in the 98th percentile of the provincial government database, Usha said.

Jackpot Lake in its Own World, Newsletter Writer Says

At Jackpot Lake, the company hopes to expand on the 99-foot and 273-foot intervals of the holes to higher-porosity sand conglomerate zones where it believes the best potential brines are present.

Analysts from Eight Capital predicted that lithium market deficits will widen into the late 2020s and that those shortfalls will be driven by demand in North America. 

"By exploring to a depth of 2,000 feet, we aim to gather a more comprehensive understanding of the mineral potential within our project area, further enhancing the overall resource estimation and project feasibility," Varshney said.

Last year, Usha said it saw the highest grades ever at the project, assaying 820 ppm lithium with an average of 334 ppm lithium in 30 samples collected from shallow surface soils.

Jackpot Lake is "somewhat in its own 'world'" with a possible shallower and richer resource than other Nevada lithium projects, wrote Chris Temple, editor of The National Investor.

Temple said he took another look at the project after colleagues told him "NOT to sleepwalk past this one."

"Usha Resources Ltd. started as a Buy and is added to my list of Speculative-rated stocks," Temple wrote.

Market Deficits to Widen

As a soft, silvery metal with highly reactive and flammable properties, lithium is a major part of electric vehicle (EV) batteries and the transition to green energy. It also strengthens alloys, is a high-temperature lubricant, and is used as a drug to treat bipolar disorder.

"We estimate North American lithium nameplate production capacity will be 262,900 LCE (million tonnes lithium carbonate) in 2026," analysts Anoop Prihar and Alex Riazanov wrote.

The lithium market is expected to grow globally from to US$6.62 billion between 2021 and 2028, a compound annual growth rate (CAGR) of 8.1%, according to a report by Fortune Business Insights.

"The growing adoption of hybrid and electric vehicles (EVs), high-drain portable electronics, and energy storage systems has had a huge impact on the growth of the overall market," the report said.

Analysts from Eight Capital predicted that lithium market deficits will widen into the late 2020s and that those shortfalls will be driven by demand in North America.

"We estimate North American lithium nameplate production capacity will be 262,900 LCE (million tonnes lithium carbonate) in 2026 based on projects that currently have completed a Definitive Feasibility Study (DFS)," analysts Anoop Prihar and Alex Riazanov wrote. "Although this is a significant increase from the current North American production capacity of 6,000 tonnes LCE, it's still more than 128,000 tonnes short of what we anticipate will be required by the battery plants. As such, we anticipate the fundamentals underlying lithium demand to remain robust."

Ownership and Share Structure

Management and insiders own 13.3% of Usha Resources, including the CEO Varshney, who owns 5.04%. Director Navin Varshney owns 7.1%.

According to Reuters, 15.03% is owned by institutions and strategic investors. Out of this category, Palos Management Inc. has the most at 1.77%. 

The balance of 71.7% is held by retail investors.

Usha's market cap is CA$12.8 million, with about 48 million shares outstanding. It trades in a 52-week range of CA$0.42 and CA$0.205.

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1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Usha Resources Ltd.
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