July 19, 2022
Bradda Head Lithium Ltd. (AIM:BHL, BUY, £0.45 target, Koby Kushner) has mobilized a drill rig for a maiden drilling program comprising 30 diamond drill holes (7,000m) at its San Domingo Li-pegmatite project in Arizona, with drilling expected to start this week. The company is targeting outcropping Li-bearing pegmatites that have seen small-scale production in the 1940s-50s and have returned high-grade rock chip sampling results of up to 2.49% Li2O over 2.4m and grab samples that returned grades of up to 8% Li2O. Geophysics thus far have suggested potential for these dykes to thicken or coalesce at depth into a larger feeder system, akin to Liontown Resources’ (ASX:LTR, Not Rated) Kathleen Valley pegmatite project. These geophysical results, along with ongoing 3D mapping (results expected shortly) and historical sampling, were used to delineate upcoming targets. Should Bradda Head be able to recreate some of these high-grade samples seen at surface in the drill core, potentially over wider intervals, we suspect a re-rating may be warranted. We note that hard rock Li projects tend to fetch higher multiples than Li-clay projects from the market. As mentioned in our initiation report, our valuation for Bradda Head is based entirely on its clay projects. Read more
