By G. Joel Chury
NEVADA, May 3, 2016 /PRNewswire/ - The rebranding of Zadar Ventures [OCTBB – ZADDF, TSX.V – ZAD] from a uranium-focused to lithium-focused explorer is still quite fresh. After announcing a pair of significant Clayton Valley lithium brine parcels next to North America's sole producing lithium brine mine, Zadar is still only beginning to capture the attention of those actively following the lithium space.
But despite a recent price surge (with the stock doubling in the last two weeks), there's still a lot of value to be realized for the junior that started the year solely in uranium. The change is doing wonders.
Late last year, lithium-focused companies, specifically in Nevada, gained significant traction when Tesla Motors [NASDAQ – TSLA] announced that it would source much of its lithium supplies domestically in Nevada to feed its planned Gigafactory project. One of the main beneficiaries from this announcement was Pure Energy Minerals [TSX.V – PE], which saw a significant boost after announcing a conditional lithium supply deal with Tesla.
With eyes still focused on Nevada's Clayton Valley, Zadar's lithium facelift is proving very timely. As well, their presence in the region is being welcomed with open arms, as there is a lot of cross-pollination going on between the juniors in the region.
For starters, while Zadar made a deal to acquire two claim blocks totaling approximately 755 hectares from regional veterans GeoXplor, the Vancouver-based Zadar wisely chose to keep GeoXplor on as operators for the project.
This is the same group that operates Pure Energy's claims in the area as well. Given GeoXplor's time and experience in the area, they're basically the regional experts best left in charge as the play develops.
More recently, Zadar has announced the addition of Jason Dussault, the original CEO and founder of Pure Energy to its advisory board. Dussault's addition helps tie all three entities together, and adds a great mind to Zadar's strategizing table.
CLAYTON VALLEY LITHIUM PROJECT
Through skillfully acquiring two significant claims from the area experts and operators GeoXplor, Zadar picked up both a long and short game strategy.
Dubbed the Clayton Valley Lithium Project, the claim blocks WSP and CR are 425 hectares, and 330 hectares respectively.
The WSP is situated directly adjacent to the producing Rockwood Lithium Mine and Processing Plant complex in North Clayton Valley. The parcel comes with historic data, including a gravity low anomaly (interpreted as a basinal low) capable of hosting high lithium concentration brines. The brine is there, it's just a matter of how high are the concentrations going to be.
While the CR is the bluesky in the deal, located only 18 km to the southeast of Silver Peak, Nevada, it contains its own isolated and un-drilled basin. The logic behind this is that the CR has the potential to be its own major discovery in the region. By virtue of its sheer location to the possible lithium source within the Clayton Valley system, theoretically there's good potential to host a similar lithium brine environment.
Work done on the CR will help to define if it's indeed closed or not. A closed basin leaves higher potential for elevated lithium concentrations.
But the first to get the attention will be the more certain WSP Claims. The claim already has had preliminary gravity and electromagnetic surveys conducted in order to delineate the target lithium layers.
Prior to Zadar's first round of drilling that would target the inferred lithium layers, the company will conduct more detailed geophysical surveys. First the company must more accurately determine the basin's shapes and target depths.
Drilling is likely to commence in the summer, upon completion of the preliminary geophysical programs. Samples will be taken of the basinal water to determine the brines' lithium grades.
THE LITHIUM UPRGRADE
The timing is right, as analysts are still happy with the direction of lithium in 2016 after remaining steady among a rough sea of resource peers in 2015.
Pure Energy association with Tesla turned, setting the stage for a symbiotic relationship for lithium supplies ahead of Tesla's expected 2017 completion of its Gigafactory.
Now that Zadar is in the same Nevada vicinity, any discovery in the same neighborhood is going to mean for even more attention to the values of the properties held by lithium players.
That said, Zadar hasn't given up on its uranium assets in Saskatchewan, which were the meat and potatoes of the company's identity only a couple of months ago.
Zadar's Pasfield Lake property in the eastern Athabasca Basin consists of 7 mineral claims totaling 32,415 hectares, and remains a large and compelling exploration target for the company.
The shifted focus to the Clayton Valley Lithium Project allows Zadar to capitalize on the current lithium momentum, while letting investors in the company benefit from the Pasfield Lake uranium play almost like they would a warrant.
Unlike US mineral claims, the Pasfield Lake claims don't require the same sort of financial upkeep to maintain the company's holdings. Instead, Zadar now has the comfort of hanging on to the uranium play until the uranium market makes its expected comeback.
For now, expect Zadar (and others in the neighborhood) to start drilling in the coming months to further flush out the geophysics of their claims, and to determine just how significant the basin containing the brine really is going to be.
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