Usha Resources Ltd. (USHA:TSX.V; USHAF:OTCQB) is adding five highly prospective Ontario lithium pegmatite projects to its portfolio as the rush continues to find one of the main metals in demand for the green revolution.
The company said it has executed options with 2758145 Ontario Ltd. of Atikokan, Ontario, for the right to purchase 100% interest in the Lee Lake, Mead, Bluett, Gathering Lake, and Triangle Lake projects.
The properties bring Usha's lithium portfolio to seven properties covering more than 29,000 hectares in Ontario, including the district-scale White Willow Lithium-Tantalum project.
"Each of these properties has the technical merit to be the next major discovery in Ontario's growing lithium hotbed," Chief Executive Officer Deepak Varshney said.
The company's flagship Jackpot Lake lithium brine project in Nevada 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," newsletter editor Chris Temple wrote. "Consider its share count: only 35 million shares or so outstanding, of which but a quarter or so is in the market."
"Usha Resources Ltd. started as a Buy and is added to my list of Speculative-rated stocks," Temple wrote. "Besides many of Usha's unique attributes at Jackpot Lake (it has a few other exploration assets of various kinds as well) consider its share count: only 35 million shares or so outstanding, of which but a quarter or so is in the market."
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 company is currently working toward its maiden drilling program at Jackpot Lake with the goal of defining a National Instrument 43-101 resource. Last year, Usha said it saw the highest grades ever at the project, assaying 820 parts per million lithium (ppm Li) with an average of 334 ppm Li in 30 samples collected from shallow surface soils.
Usha focuses on high-grade battery and precious metal projects across North America. In addition to its latest acquisitions, the company also has several ongoing projects, including the Jackpot Lake Lithium Brine Project in Nevada, the White Willow Lithium Pegmatite Project in Ontario, and the Lost Basin Project in Arizona.
The Catalyst: Building a Portfolio of Hard-Rock Assets
Under the agreement for the five new lithium projects, Usha may acquire 100% interest in the properties by paying CA$395,350 in cash and 2.1 million shares over three years.
The vendor also has been granted a 2% net-smelter returns royalty for each of the projects, which Usha may purchase half of any time for consideration of CA$1,000,000 per option.
The transactions must still be approved by the TSX Venture exchange.
The company said the purchases are part its strategy to build a portfolio of highly complementary hard-rock assets to Jackpot Lake.
Gathering Lake and Triangle Lake make up 8,938 hectares collectively within the Georgia Lake pegmatite field.
Lee Lake is 2,476 hectares adjacent to Australia-based Green Technology Metal's North Seymour Lake Claims, about 10 kilometers northwest of the Seymour Lake Project, which hosts a 9.9 million tonne (Mt) resource at 1.04% Li2O.
The Mead project is 1,001 hectares bounding Brunswick Exploration Inc.'s (BRW:TSX.V) Hearst project.
Bluett's 993 hectares are adjacent to Australian company Critical Resources Ltd.'s Mavis Lake project, where the company has already drilled more than 20,000 meters and is drilling 20,000 meters more this to define a maiden resource.
Usha said is waiting for results from limited drilling completed as part of the first hole at Jackpot Lake and will soon resume drilling 2,000 feet there to complete well installation at the bottom of the basin.
"This summer will be a very busy time for the company as we complete the initial two drill holes at Jackpot Lake and begin exploration of our hard rock assets," Varshney said. "With a working capital of approximately (CA$)3 million, limited costs remaining at Jackpot Lake as we progress towards a maiden 43-101 lithium brine resource estimate, and the flexibility to potentially partner with strategic companies from Australia on our lithium pegmatite assets, Usha is well positioned to advance and grow."
The Lithium Rush Is On
The world needs lithium to help fuel the move to green energy. The soft, silvery metal with highly reactive and flammable properties is a major component of electric vehicle (EV) batteries. It’s also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.
The deficit between lithium demand and production and highly probable and probable lithium projects will be over 3.5 Mt by 2040, according to Benchmark Mineral Intelligence.
One out of five vehicles sold worldwide could be an EV in less than two years, and Ford and General Motors have set a goal of achieving 40–50% of their sales from EVs in the U.S. by 2030.
To qualify for tax credits under new U.S. laws, a significant percentage of batteries and minerals in batteries must come from the U.S. or Canada.
China only has less than a quarter of the world’s lithium resources but controlled about two-thirds of the world’s lithium processing and refining capacity in 2021, Rystad Energy said.
Streetwise Ownership Overview*
"Government regulations and subsidies are working on expanding clean energy," Research and Markets wrote. "Thus, energy storage systems represent a huge opportunity for investors."
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$12.52 million, with about 47 million shares outstanding. It trades in a 52-week range of CA$0.42 and CA$0.205.
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