Ore Resources Ltd
- ASX Code: OR3
- Market Cap: $52,956,863
Ore Resources (ASX: OR3) Drills Into High-Grade Lithium at Kangaroo Hills as DSO Study Nears Completion
Ore Resources Ltd (ASX: OR3) has reported diamond drilling results from its 100%-owned Kangaroo Hills Lithium Project in Western Australia that reinforce the shallow and high-grade nature of the Big Red pegmatite system. The update is material because it arrives as the company works towards two near-term development milestones: a Direct Shipping Ore (DSO) study and an initial Mineral Resource Estimate (MRE), both expected in the coming weeks.
Ore said seven diamond holes for about 640 metres were completed in July 2026. Five holes targeted lithium mineralisation, while two were drilled for geotechnical purposes. All five targeted holes returned significant lithium intervals, with the strongest result from KHDD018, which intersected 27 metres at 1.33% Li2O from 4 metres, including 5 metres at 2.01% Li2O from 11 metres.
For investors, the latest drilling matters for three reasons. It adds confidence to the geological model at Big Red, it provides bulk core for ore sorting and metallurgical testwork, and it supports a study focused on a near-term, lower-capital development pathway.
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Diamond Drilling Results Support the Big Red Geological Model
According to the company, the July programme included six diamond holes drilled from surface and one diamond tail extending a previously completed RC hole. The programme was designed not only to test mineralisation but also to collect representative HQ and PQ core — larger-diameter drill core samples commonly used for technical studies such as metallurgy and geotechnical analysis.
The results from the five targeted holes are summarised below.
| Hole ID | From (m) | To (m) | Width (m) | Grade (Li2O %) | Highlight |
|---|---|---|---|---|---|
| KHDD018 | 4 | 31 | 27 | 1.33 | Includes 5m @ 2.01% Li2O from 11m |
| KHDD015 | 54 | 76 | 22 | 1.43 | Includes 11m @ 1.70% Li2O from 62m |
| KHDD013 | 59 | 84 | 25 | 1.33 | Broad, consistent interval |
| KHRC218D | 80 | 109 | 29 | 1.06 | Deepest targeted intercept |
| KHDD014 | 89 | 111 | 22 | 1.31 | Supports continuity at depth |
The standout hole, KHDD018, appears particularly important in local geological terms. Ore reported that it was drilled between two earlier 2023 holes, KHRC022 and KHRC021, which had returned 16m @ 1.09% Li2O from 11m and 12m @ 1.02% Li2O from 8m respectively. In that context, the new 27-metre intercept indicates a thicker mineralised zone than those nearby holes had suggested.
That matters because continuity and thickness are central to any future mining scenario. A pegmatite that is wide, shallow and consistent may be easier to evaluate for early-stage mining than one with narrow or irregular mineralised zones.
What Did the Managing Director Say?
"Our diamond drilling programme at Kangaroo Hills has delivered strong outcomes across two fronts. In addition to providing the representative core samples necessary for planned further metallurgical, ore sorting and geotechnical studies at Kangaroo Hills, the programme has also returned significant lithium mineralisation in all targeted drill holes," said Nick Rathjen, Managing Director and CEO.
Why Do Shallow Lithium Intercepts Matter for Project Economics?
In hard rock lithium projects, depth can have a direct effect on the cost and complexity of mining. Mineralisation intercepted from 4 metres below surface, as reported in KHDD018, may offer a simpler starting point for any open pit assessment than deeper mineralisation, assuming other technical and economic factors are supportive.
The drilling results at Kangaroo Hills show mineralised intervals beginning from as shallow as 4 metres and extending to deeper zones around 89 metres. Widths range from 22 metres to 29 metres across the main reported intercepts, while grades range from 1.06% to 1.43% Li2O, with an internal higher-grade interval of 2.01% Li2O.
For non-specialist readers, Li2O is the standard way lithium grade is reported in hard rock deposits. In simple terms, it measures how much lithium oxide is present in the rock. Higher grades generally mean more lithium per tonne of ore, although mining, processing, recovery and product quality all also influence project value.
This combination of shallow depth, broad widths and grades above 1.0% Li2O is one reason Ore is assessing a DSO pathway rather than relying solely on a conventional processing route from the outset.
Iron Content Testing Adds Another Layer to the Kangaroo Hills Story
Beyond lithium grade, the ASX update also addressed a technical issue that can affect product quality: iron oxide content, reported as Fe2O3. In lithium projects, elevated iron can be a concern because impurities may affect concentrate quality and downstream chemical processing.
To assess this, Ore compared duplicate sample preparation using steel crucibles and tungsten crucibles. According to the company, steel crucibles had been used historically, but the latest work indicates this preparation method may have introduced contamination and overstated the true iron content of the mineralisation.
The comparison results are shown below.
| Hole ID | Fe2O3 % Steel Crucible | Fe2O3 % Tungsten Crucible |
|---|---|---|
| KHDD013 | 0.79 | 0.27 |
| KHDD014 | 0.92 | 0.31 |
| KHRC218D | 0.99 | 0.31 |
| KHDD015 | 0.91 | 0.43 |
| KHDD018 | 0.82 | 0.38 |
Ore said the steel crucible method introduced an average Fe2O3 contamination factor of approximately 2.5 times. Furthermore, using tungsten crucibles, the apparent intrinsic Fe2O3 content was reduced to a range of 0.27% to 0.43%.
Why Does Lower Iron Content Matter?
Lower intrinsic iron content may improve confidence in potential product quality and may support better outcomes in downstream processing studies. The company linked this work directly to the Kangaroo Hills DSO concept and ongoing study work.
Indeed, Ore stated that confirmation of low intrinsic iron content "provided further confidence in potential DSO product quality and downstream processing amenability."
What Is a DSO Operation and Why Is Ore Studying It?
Direct Shipping Ore (DSO) refers to ore that may be mined and shipped with minimal on-site processing. In practice, this can mean crushing and screening, rather than building a full processing plant with more complex recovery circuits.
For a junior resource company, a DSO pathway is often studied because it may offer:
- Lower upfront capital requirements
- Shorter lead times to a potential operation
- Simpler development sequencing
- Earlier technical and commercial testing of product quality
That does not mean a DSO operation will proceed. However, the key point is that Ore is preparing a technical and economic assessment to determine whether such a pathway is viable at Kangaroo Hills.
According to the ASX announcement, the study is expected in the coming weeks and will be supported by an initial Mineral Resource Estimate (MRE). An MRE is a formal estimate of how much mineralised material exists, at what grade, and with what level of confidence based on available drilling data.
Without an MRE, it is difficult to frame a project's scale in a standardised way. With one, investors are better placed to assess whether study outcomes rest on a substantial mineralised base.
Understanding Pegmatite-Hosted Lithium Projects
Kangaroo Hills is described by the company as a Lithium-Caesium-Tantalum (LCT) pegmatite project. This is a common geological setting for hard rock lithium deposits. A few key terms help explain the announcement:
- Pegmatite: A coarse-grained igneous rock. In lithium exploration, some pegmatites carry lithium-bearing minerals such as spodumene.
- LCT pegmatite: A pegmatite type associated with lithium, caesium and tantalum. These deposits are an established source of hard rock lithium globally.
- Diamond drilling: A drill method that recovers cylindrical rock core, providing more geological detail than many other methods.
- RC drilling: Reverse Circulation drilling produces rock chips rather than intact core, commonly used for faster and lower-cost exploration.
- Metallurgical testwork: Laboratory work used to understand how ore responds to processing and what product quality may be achievable.
- Ore sorting: A process that separates higher-value rock from lower-value material before more intensive processing or transport.
For Kangaroo Hills, the relevance of these terms is practical. The diamond drilling programme is not only confirming mineralisation but also generating the larger sample volumes needed for ore sorting and metallurgical testing — studies that feed directly into whether Ore can present a credible DSO case.
Near-Term Milestones Investors Are Watching
The company's next steps are clearly defined in the announcement, with several data points expected within a relatively short timeframe.
| Milestone | Timing | Why It Matters |
|---|---|---|
| DSO study | Coming weeks | Technical and economic assessment of a possible near-term operation |
| Initial MRE for Kangaroo Hills | Coming weeks | Provides formal resource basis for the study |
| 3,000m RC drilling results | September 2026 expected | May add to growth potential at Kangaroo Hills and Miriam |
| Ore sorting assessments | Planned / ongoing | May help refine economics and product quality |
| Metallurgical testwork | Planned / ongoing | Important for processing and product evaluation |
The concentration of upcoming milestones is relevant. Rather than a single exploration result driving sentiment, the company is moving towards a package of geological, metallurgical and economic information that may give the market a fuller basis for valuation.
Ore also reported holding $6.8 million in cash and zero debt as at 30 June 2026. For investors, that balance sheet position suggests the company is funded to continue planned exploration and evaluation work in the near term, though future development decisions would depend on study outcomes and project scale.
What Does This Update Change for Investors?
The latest diamond drilling does not yet define the final scale or economics of Kangaroo Hills. What it does appear to do, however, is strengthen the case for the project's next phase of evaluation. Three points stand out from the announcement:
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Drill consistency — All five targeted holes returned significant lithium intervals, supporting continuity across the Big Red pegmatite system.
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Shallow mineralisation — The near-surface intercept in KHDD018 is relevant to any lower-capital mine development concept, particularly a DSO-style scenario.
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Technical progress beyond drilling — The programme was designed to collect core for ore sorting, metallurgical and geotechnical work, whilst iron contamination testing has provided a clearer picture of intrinsic ore quality.
Location is also part of the broader investment context. Ore said the project sits within 50 kilometres of Kalgoorlie, with access to roads, rail and port infrastructure in the wider region. Established mining districts can offer logistical advantages, although project-specific economics still depend on resource size, mining method, metallurgy, approvals and market conditions.
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Kangaroo Hills Moves Closer to a More Defined Development Case
In summary, Ore Resources is moving Kangaroo Hills from pure exploration towards a more formal development assessment. The latest results support the geological model, provide material for technical studies, and add confidence around low intrinsic iron levels in the Big Red mineralisation.
The next major test will come when the company releases its DSO study and initial MRE. Those two deliverables should give investors a better framework for assessing the scale, quality and possible development path of Kangaroo Hills.
Until then, the latest drilling has added support to the project's near-surface lithium case and kept Ore Resources in a period of active project evaluation and expected news flow through September 2026.
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