Bradda Head Lithium - BHL - Stock Discussion

Please add bradda head

https://www.braddaheadltd.com/

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This company is a lithium exploration group focused on developing projects in the USA.

sounds like good news this year so far

RNS 12/1/22

Phase 1 of the Company’s Metallurgical Test-work Programme Highlights Positive Pre-Concentration Upgrading and 99% Lithium (Li) Extraction from Low Temp Acid Leach Approach

Bradda Head Lithium Ltd (AIM: BHL), the North America-focused lithium development group, is pleased to announce positive results from its preliminary metallurgical test-work programme that it has completed with SGS Canada (“SGS”), the well-known and respected international metallurgical test-work laboratory, on samples from its 100%-owned Burro Creek East lithium deposit. Burro Creek East already has a JORC compliant resource identified, and an updated resource is expected in Q1 2022.

Highlights:

• The results have shown that it is possible to upgrade the Li content in the proposed feed fraction by approximately 15%, by selecting only the -11micron size fraction.

· Impressive acid leach results indicate a 99% lithium extraction to solution within 1-hour utilising a 90 degrees Centigrade, sulphuric acid leach at atmospheric pressure approach.

· Significantly, only low levels of accessory minerals were extracted (levels of Al, Fe, K and Na) during the leaching step.

· The above results highlight an opportunity to lower potential process plant Opex and Capex costs and compares favourably with other previous results on extracting lithium from claystone mineralisation.

· The Company’s primary aim is to develop a suitable process flowsheet with a minimum carbon footprint, whereby the target processing cost of Li extraction is less than US$4,000/t LCE (Lithium Carbonate Equivalent), allowing it to be competitive in a more challenging Lithium Carbonate pricing environment. Current spot prices are over US$40,000/t.

· Bradda is continuing its metallurgical process test-work to potentially further upgrade Li contents in Li clay using mini-cyclone for classification, and froth flotation.

· Following on from above, more detailed metallurgical test-work will be undertaken to produce battery-grade Lithium Carbonate Equivalent (LCE).

· During the ongoing test-work programme Bradda is also considering the recovery of co-products from the feed material. The potential recovery of co-products may add substantially to the cash flow of the company and differentiates Bradda from other developers in this field.

https://polaris.brighterir.com/public/bradda_head/news/rns/story/x8klqex

Can’t believe this is still flying under the radar…
It’s still early days for this lithium explorer, but the fundamentals here are significant:

  • licences in both Nevada and Arizona (top mining jurisdictions globally) near Tesla’s gigafactory and well placed being in the US given the focus on critical metals by the Biden administration.
  • exploring for all 3 types of lithium deposit giving diversity within the portfolio whilst remaining a lithium pure play.
  • having already released an updated MRE for one of their clay assets, BHL will have drilled and produced MREs for the majority of their licenses by the end of this year.
  • they’re recently had a placing which raised £10m (4x oversubscribed) which means they’re fully funded to explore all licenses over the next couple of years.
  • management own 22% of BHL with billionaire investor Jim Mellon the largest shareholder (he started the company).

If the resource they prove up is anything like deposits owned by Liontown, LAC, LKE, in a tier one mining jurisdiction, the future value of Bradda could be multiples of the existing £51m mcap.

The April investor presentation is a great place to start and highlights the huge potential for this company:

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Like many other lithium stocks this has taken a hammering lately.

9-10p should be a good support, although I’ve been averaging in on every drop.

Funded for at least the next two years and strong new flow expected from next month.

You can’t find a better jurisdiction for lithium than the state in which Tesla’s giga factory also resides in :facepunch:t3:

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22 07 04 BHL Red Cloud - Site Visit.pdf (2.1 MB)

Updated broker note attached - they’ve reiterated their share price target of 45p (based on Basin and Wikieup only).
The company maker could well be the San Domingo pegmatites when they’re drilled later this year.

It’s been hammered in the last couple of months SP wise and currently valued at £25m mcap with £14.5m cash (giving an EV of £11.5m!).

Now a top 3 holding for me and one I’m happy to hold until the end of this year to see what the pegmatites yield…

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Great update, thank you. Would you be able to share anything about the timeline for the 45p target?

I understand there is a degree of confidence due to the location and proximity to a Tesla factory. I also hold and am quite quite optimistic about Jim Mellon’s projects but I wonder what other reasons to be cheerful might be?

The 45p target is based on Red Cloud’s initial broker note (link below).

20220329-BHL-Initiation.pdf (1.7 MB)

It’s based on building a clay resource across basin and wikieup with a risk weighted average of just over 2mt of LCE being produced. This would realistically take 1-2 years to prove unless BHL announce another drill programme on top of the existing 44 hole programme they have planned for this quarter (which I expect could get BHL close to 1mt if drilling is successful).

The key takeaway for me though is the fact San Domingo (pegmatite asset) is not factored into their share price calculation at all.
We already know San Dom contains 10 pegmatites which have been partially mined in the 1940s and 50s. The catalyst for a material rerate is whether there is a feeder system underneath these pegmatites which could hold significant amounts of spodumene.
A blue sky scenario which could see a rerate similar to Liontown Resources based in Aus who have a pegmatite asset with the feeder system at their Kathleen Valley asset Kathleen Valley.
Pegmatite mining is also relatively quick to get into production and is also understood very well by the market in terms of profitability (compared to clay assets where the technology is still being proven as economical).

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Thank you for the insight and link

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When @MrChew posts about mining you can bet a lithium mine that the research has been done. That’s not to say you should blindly listen/copy but the workings are for all to see. It’s great to have you here @MrChew :facepunch:t2:

Thanks Neil! I do enjoy researching a new resource stock!
But yes worth echoing that research does not always equal results (especially in the junior resource space!).

Still lots of risk in this stock (hence why only valued at £30m with £14.5m cash), but if they can prove economical lithium deposits there’s certainly multiple bags available for those invested.

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Bradda Head has now mobilised a drill rig to commence drilling this week at its c.13km2 San Domingo pegmatite project in Central Arizona, USA

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Full year report

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2nd largest holding for me now - after a huge correction there’s plenty of results to be announced throughout the rest of this year with no need for placings for a couple of years given the cash position.

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Currently 12% up today and still a way to go before it reaches the most recent placing price (13.5p) which was 4x oversubscribed.

Drill cores from the San Domingo drill programme will be coming back from the lab in the next few weeks which should show strong spodumene mineralisation.

Hoping for a CTL-like rise this week if momentum continues.

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