Is Liontown on the cusp of a significant Julimar-style discovery? This experienced analyst thinks it could be

Geochemical sampling results rarely warrant a standalone research note from a mainstream broking firm.
17th July 2020
Resources Rising Stars

Geochemical sampling results rarely warrant a standalone research note from a mainstream broking firm.

But in the case of Liontown Resources’ (ASX: LTR) announcement from its Moora project in WA this week, the scale and tenor of its results – and the project’s location at the northern end of the exciting new Julimar nickel province – prompted analyst Dr Chris Baker from Bridge Street Capital to delve into the detail.

“Is Liontown on the cusp of a significant Julimar-style PGE-gold-nickel-copper discovery at Moora?” was the burning question posed by Baker as he dissected the Liontown announcement in a 5-page research report released earlier this week.

In its announcement, Liontown – better known to investors for its Kathleen Valley lithium development project in WA – reported what it described as “exceptional” early stage results from Moora, outlining “several highly significant geochemical anomalies”.

“We do not treat these comments lightly from what is typically a very conservative management team,” Baker, a former respected fund manager, wrote.

The company has delineated two large geochemical areas, which it has named the Mt Yule-Fenton gold-PGE corridor and the Bindi Bindi nickel area, following a combined gravity/auger geochemical survey at Moora.

The Mt Yule-Fenton corridor covers an area of some 15km in length and 2.5km wide and includes four discrete geochemical anomalies. This includes the large Mt Yule target which encompasses some 3.6km by 2.2km of gold (>10ppb) and PGE anomalism, with elevated nickel and copper.

“Encouraging geochemistry, superimposed on large and quite prominent magnetic structures suggests to us that exploration drilling will find something of further interest,” Baker continued. “Whether it is of economic potential, only the drill rig and assay laboratory will tell us.”

The next step for exploration is an airborne EM survey which is planned to commence next month targeting conductive sulphides beneath 30-40m of weathering.

Liontown’s Moora project is located 95km north of the exciting Julimar PGE-nickel-copper discovery of Chalice Gold Mines (ASX: CHN).

“That Moora, Cassini’s Yarawindah discovery and Julimar lie almost on a single trend line has geologists speculating about a common origin for all three,” Baker wrote.

“This discovery is quite remarkable. It comes on the tail of the discovery of Liontown’s Tier-1 hard rock lithium discovery at Kathleen Valley, where we are awaiting the conclusion of an updated PFS (due in October).

“Preliminary results from this study allowed us to upgrade our conceptual valuation for LTR from 17c to 21c per share.”

Bridge Street have also noted the recently reported gold results from Chalice’s Julimar Project as being a development of significance to Liontown.

“Moora shows quite significant surface gold anomalism, with associated PGE’s and nickel. What does this mean? The drill rig will tell us in good time, but it is certainly encouraging.”


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