Maiden Lithium Resource Boosts Charger Metals' Lake Johnston Project
Charger Metals NL (ASX: CHR) has announced a significant milestone with its maiden Mineral Resource Estimate at the Medcalf Lithium Deposit, revealing 8.2 million tonnes at 1.0% Li2O at a 0.5% Li2O cut-off. The high-grade resource, which remains open at depth, establishes Lake Johnston as a promising Charger Metals NL lithium project in Western Australia's emerging battery metals corridor.
Resource Highlights Strong Potential with Room to Grow
The maiden resource represents the first tangible confirmation of Lake Johnston's lithium potential, with several noteworthy aspects:
- 8.2Mt @ 1.0% Li2O inferred resource at a commercial grade cut-off of 0.5% Li2O
- Resource remains open at depth, indicating potential for expansion
- Additional Exploration Target of 3-5Mt @ 1.0-1.4% Li2O defined at adjacent Medcalf West Prospect
- High-grade nature of the resource with minimal grade sensitivity when applying higher cut-offs
- Deposit characteristics appear favourable for potential mining with outcropping mineralisation
The resource grade of 1.0% Li2O positions Medcalf as a competitive deposit in the growing Western Australian lithium sector, with grades comparable to several operating mines in the region.
"The maiden Mineral Resource at Medcalf highlights the potential of our Lake Johnston Lithium Project and is a reward for the systematic greenfields exploration undertaken by the Company. The lithium mineralisation hosted by spodumene-bearing pegmatites is both near surface (outcropping) and high-grade, and thus bodes well for potential future mining scenarios," commented Charger's Managing Director, Aidan Platel.
Strategic Backing from Rio Tinto Adds Credibility
A particularly compelling aspect of Charger Metals NL lithium project is the involvement of Rio Tinto Exploration (RTX), which is farming into the project. RTX continues to sole fund exploration with:
- $1.1 million budget and up to 5,000m of drilling planned for this year
- Potential to earn 51% by funding $10 million in exploration and paying Charger $1.5 million
- Option to increase to 75% by sole funding $40 million or completing a Definitive Feasibility Study
This partnership with a major mining company provides technical expertise and financial backing that significantly de-risks the project's advancement.
Understanding Lithium Resources and Spodumene Deposits
For investors new to lithium exploration, it's important to understand that spodumene is the primary lithium-bearing mineral in hard rock deposits like Medcalf. Spodumene-bearing pegmatites (the host rock) typically contain lithium oxide (Li2O) at grades ranging from 0.8% to 1.5% in commercial operations.
Lithium resources are typically reported as Li2O percentages, with a 1.0% Li2O grade considered commercially viable in today's market, particularly for outcropping mineralisation that may have favourable mining economics due to minimal overburden.
The conversion from Li2O to lithium metal uses a factor of 2.153, meaning a resource with 1.0% Li2O contains approximately 0.46% lithium metal.
What makes a lithium resource commercially viable?
Several factors determine commercial viability of a lithium deposit:
- Grade – The Medcalf deposit's 1.0% Li2O is considered commercially viable for hard rock deposits
- Size – While the initial 8.2Mt resource is modest, the exploration target and open mineralisation suggest growth potential
- Accessibility – Surface outcropping mineralisation typically means lower mining costs
- Metallurgy – The ability to process the ore effectively (pending test work for Medcalf)
- Infrastructure – Proximity to roads, power, and processing facilities
- Market conditions – Long-term lithium demand and pricing forecasts
Lake Johnston: Location Advantage in an Emerging Lithium Province
The Lake Johnston Lithium Project is strategically located approximately 70km east of the large Earl Grey (Mt Holland) Lithium Project, where Covalent Lithium (a joint venture between SQM and Wesfarmers) began mining and commissioning their concentrator in March 2024. Mt Holland is one of Australia's largest hard-rock lithium projects with ore reserves estimated at 189Mt @ 1.5% Li2O.
This proximity to an established lithium development provides:
- Confirmation of the region's geological prospectivity for lithium
- Potential infrastructure advantages as the district develops
- Established regulatory and community frameworks for lithium projects
Future Growth Potential
Charger's Managing Director, Aidan Platel, emphasised that the Medcalf target area is just the first of several lithium target areas delineated at Lake Johnston, with more prospects yet to be drilled:
"The significant Exploration Target at the adjacent Medcalf West Prospect was estimated from high-grade lithium-in-pegmatite drill intersections and pegmatite outcrops, and highlights the potential to significantly grow the near-surface Mineral Resource within the greater Medcalf target area. The fact that both Medcalf and Medcalf West remain open at depth further adds to the growth potential."
The company is systematically exploring these new lithium target areas with RTX funding, aiming to significantly add to the defined lithium resources at Lake Johnston.
Resource Sensitivity Analysis
The Medcalf resource shows relatively low sensitivity to cut-off grade changes, indicating consistent mineralisation. This is demonstrated in the table below:
| Cut-off Grade (% Li2O) | Tonnage (Mt) | Grade (% Li2O) | Contained Li2O (kt) |
|---|---|---|---|
| 0.2 | 8.8 | 0.96 | 85 |
| 0.3 | 8.8 | 0.97 | 85 |
| 0.4 | 8.7 | 0.98 | 84 |
| 0.5 | 8.2 | 1.00 | 83 |
| 0.6 | 7.5 | 1.05 | 78 |
| 0.7 | 6.7 | 1.09 | 73 |
| 0.8 | 5.7 | 1.16 | 65 |
| 0.9 | 4.6 | 1.23 | 56 |
| 1.0 | 3.7 | 1.31 | 48 |
This table shows that even at higher cut-off grades, a substantial portion of the resource remains economically viable, demonstrating the robust nature of the mineralisation at Medcalf.
Investment Thesis: Why Charger Metals Deserves Attention
The maiden Medcalf resource marks a critical transition for Charger Metals NL lithium project from pure exploration to resource definition and growth. Several factors make this an interesting investment proposition:
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High-grade resource with growth potential: The 1.0% Li2O grade is commercially competitive, and both the resource and exploration target remain open
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Major partner validation: Rio Tinto's farm-in provides both financial support and technical validation of the project's potential
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Strategic location: Proximity to Mt Holland and within Western Australia's established mining jurisdiction offers potential development advantages
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Multiple prospect pipeline: Medcalf is just the first of several lithium targets, creating a pathway for resource growth
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Outcropping mineralisation: Near-surface nature of the deposit could translate to favourable economics in future mining studies
Next Steps to Watch
Investors should monitor several upcoming catalysts:
- Further drilling results from the RTX-funded programmes at additional targets
- Resource expansion drilling at both Medcalf and Medcalf West
- Potential metallurgical test work to confirm processing characteristics
- Progress on converting the exploration target to resources
As exploration continues with Rio Tinto's financial backing, Charger Metals NL lithium project is well-positioned to potentially grow its resource base at Lake Johnston and advance the project toward development studies.
The high-grade nature of the maiden resource, combined with strategic backing from a major mining company and multiple untested targets, makes Charger Metals a compelling story in the Australian lithium sector.
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