Lithium mining company Hawkstone Mining Ltd [ASX:HWK] have seen their share price surge after announcing most recent results of their 37-hole phase 2 drilling program at their Big Sandy Lithium Project in Arizona.
Hawkstone announced the program had delivered significant lithium intercepts, with the latest four holes demonstrating ‘ the significant potential of the Big Sandy project’.
Investors have seemed to recognise this potential, causing Hawkstone shares to rise 17.65% within the second hour of trading. At time of writing, shares currently sit at $0.019, up 11.77%.
A breakdown of the successful results
In calculating the quality of these latest four intercepts, a bottom cut-off grade of 1,000ppm of lithium was used. Each intercept exceeded this cut-off, with the southern-most drill also surpassing the bottom cut-off grade for high-grade intervals (2,000ppm of Lithium).
As per the update, the company notes these impressive results ‘are generating a stream of significant news flow as the company [Hawkstone Mining] builds momentum towards expected estimating of its maiden JORC compliant resource’, anticipated for September 2019.
Similar results were obtained from the prior stage of this drilling program, announced on the ASX on 10 July. In that update, once again, all four reported holes exceeded the bottom cut-off grade for processable lithium, with one reaching the high-grade bracket.
However, the market did not react as positively to the 10 July update, with the share price remaining level. This may be due to the drilling program being at an earlier stage, and no anticipatory timeline for their JORC compliant resource.
Alternatively, today’s drilling update may be slightly more exciting as the intercepts reported are scattered about the Big Sandy area, as opposed to being adjacent to one another, as was the case of the holes reported on 10 July.
Such scattering ‘demonstrates the excellent continuity of the mineralised zone over a strike length of 850m’, thus again pointing to the potential of this project.
The lucrative potential of ASX: HWK
There are a lot of good things going for this mining small-cap. For one thing, the Big Sandy and Lordsburg projects — both 100% owned by Hawkstone — are situated in the US’ emerging ‘Battery Corridor’. This corridor is also home to Tesla’s Gigafactory 1, which works on lithium-ion battery and electric vehicle subassembly.
This means Hawkstone are in striking distance of a company seeking to churn out a whole heap of lithium-powered vehicles. And with strong lithium demand across the globe expecting to triple by 2025, it seems Hawkstone have tapped in to one of the hottest resources in the market.
In fact, we have an entire report on the ‘Battery Boom’ that is Lithium, which you can download for free by clicking here.
And while the price of lithium doesn’t seem to be reflecting this hunger for the resource, lithium expert Joe Lowry from Global Lithium said on Linkedin: ‘what investors need to be concerned about is if the companies they own shares in will produce a vast majority of battery quality product’.
Hawkstone’s latest drill results show the Big Sandy project holds battery-quality lithium. Though holding a ‘vast majority’ of it will be something a small-cap will be battling against until they break out into the mainstream.
That said, the US are on the lower end of top lithium producers, so perhaps Hawkstone’s geographical location of their projects will set them apart from other ASX-listed lithium miners.
For Money Morning
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