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Lithium Firm's Reassay Results Exceed Expectations

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As a species, we're going to need a lot of lithium to make a move to a green economy. For junior exploration concern Tearlach Resources Limited, locating all that lithium just got a little easier.

Tearlach Resources Limited (TEA:TSX; TELHF:OTC; V44:FRA) is a Canada-based company acquiring, exploring, and developing lithium projects. It holds an interest in the Final Frontier Project, including the Pakwan/Margot Lake Claim block, which is directly contiguous to Frontier Lithium's Flagship Spark and Pag deposits north of Red Lake.

In addition, Tearlach has interests in the Wesley, Harth, and Ferland properties, all located in the lithium hub of northwestern Ontario, Canada, and intends to explore these assets and develop a portfolio of projects in North America through acquisitions. Its Savant property, an exploration stage gold-silver-copper property, is also located in that province.

The company's Shelby Properties consists of six properties: Patriot West (2 claim blocks), Patriot North, Patriot North Spodumene, Patriot North East, Patriot East, and Patriot South. These properties cover approximately 11,226 hectares.

Tearlach also has a joint venture agreement with Blackrock Silver on the Gabriel project in TonopahNevada, which borders American Lithium's TLC Deposit. The company is currently focusing on developing this deposit and has completed 11 drill holes on the Gabriel property.

The Catalyst: Assays Beat Expectations

On June 8, Tearlach Resources reported that pulp reassay results for six 2022 rotary drill holes (010 to 015) drilled by Blackrock Silver at the Gabriel project confirm the lithium mineralization intersected, with reassay results 14 to 33% higher than the original assays.

As Wood McKenzie principal analyst Alllan Pedersen explained, "A single end use is rapidly coming to dominate the market, with rechargeable batteries now accounting for approximately 85% of global demand. As EV uptake took off through 2021 and 2022, demand surged."

The company reports that a lithium intercept (the minimum 15-foot interval at a 400 ppm cut-off grade) was intersected in five of the six holes. The longest intercept of lithium mineralization for the six holes is 130 feet in hole TN22-011, and the highest primary intercept grade is 836 ppm Li over 70 feet in hole TN22-012.

TN22-012 also returned the highest grade for an included intercept (984 ppm Li over 40 feet, including 1,660 ppm). In addition to being up to 33 percent higher than the corresponding intercept values for the original TN22 assays, these new results expand the firm's defined mineralization.

Tearlach Resources director David C. Flint says, "The TN22 reassay program contributes valuable data to the Gabriel Phase 1 drill database, confirming consistently higher assay grades compared to the original drilling. These reassays significantly enhance data density in specific areas of the Gabriel property and expand the zone of defined mineralization to the southwest."

Why This Sector? Lithium's Ground Floor

As Wood McKenzie principal analyst Alllan Pedersen explained in a May 31st summary, "Lithium strongly demonstrates the characteristics of an immature market, with the supply balance fluctuating between deficit and surplus. A single end use is rapidly coming to dominate the market, with rechargeable batteries now accounting for approximately 85% of global demand. As EV uptake took off through 2021 and 2022, demand surged."

"However, infrastructure development in terms of both mines and refineries requires a massive investment of both time and money. As a result, supply struggled to keep up."

In February, Tearlach Resources was recognized as a Top 10 Ranked Company in the Mining Sector by the TSX Venture 50 for 2022.

"Perhaps the biggest challenge in forecasting the future of the lithium market is that the industry is still essentially in its infancy," Pedersen Writes. "There are no globally accepted specifications for the product, and therefore no accepted anchors to ground pricing. The need for unique and very precise specifications makes lithium products almost comparable to specialty chemicals in terms of pricing complexity."

"At the same time, the need to keep up with continued demand growth prevents the industry from taking a step back and assessing how to establish a more uniform and consistent approach. Greater standardization is likely in the future, but it will take time to emerge."

By positioning itself as a standard bearer in this drive toward homogenization in the industry, Tearlach Resources is well situated to define much of the market it's hoping to capture.

Why This Company? Setting the Stage for 2026

A cursory examination of Tearlach Resources' Investor Presentation makes it clear that the firm is a forward-looking concern. None of its properties are currently producing, but all of them are targeting 2026-2028 to launch what the presentation calls "production planning."

This ambitious approach —  bringing multiple sites fully online relatively simultaneously —  may appear logistically tricky, but it offers the opportunity to move at once while at scale. As the mass market for lithium is still sorting itself, such a simple time horizon may play directly into the firm's (and its shareholders') interests.

Why Now? Price Increases with Each New Piece of Good News

Tearlach remains one of the lowest-valued companies in its sector, as evidenced by the prominent bar chart on its Investor Fact Sheet. However, its value has been increasing lately based on little more than news exposure.

For example, share prices rose a month ago when Charles Ross was named interim CEO. They also rose in April, based on initial assay results from the Gabriel site — the same results that have now been reassayed as even more spectacular.

And one shouldn't forget that in February, Tearlach Resources was recognized as a Top 10 Ranked Company in the Mining Sector by the TSX Venture 50 for 2022

CEO at the time, Morgan Lekstrom, explained that "Not only have we added world-class team members, acquisitions, and joint ventures, we have accelerated through multiple business phases in a very short time. We are fully committed to executing our business plan by keeping to a steady growth curve to become a leading lithium mining company. Other lithium companies such as American Lithium ($1B market cap) have been recognized by the TSX Venture Top 50 for such growth."

Streetwise Ownership Overview*

Tearlach Resources Limited (TEA:TSX; TELHF:OTC; V44:FRA)

*Share Structure as of 7/3/2023

Ownership and Share Structure

According to Reuters, 0.67% of the company is held by management and insiders. Reuters lists interim CEO and Director Ross as the largest single shareholder, with some 0.35% control, holding 300,000 shares. Director Lindsey Bottomer has 0.14%, with 120,000. Director Raymond Strafehl has 0.12%, with 100,000, and Director Joseph Yelder has 0.04%, with 30,000.

0.03% is held by institutional investors. Alps Advisors Inc. and Waldron Private Wealth LLC each have 0.01%, with 10,000 shares, respectively. 

The rest is with retail investors. 

Tearlach Resources has a market cap of CA$ 9.64 million, with a free float of 83.81 million shares. 

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Important Disclosures:

  1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Tearlach Resources Limited.
  2. Owen Ferguson wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  3. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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