Chariot Corporation is a company in a hurry.
Since listing on the Australian stock exchange (ASX) in October, Chariot’s focus has been on building up a significant suite of lithium projects across three US states with the goal of securing future supply of the mineral to fulfil a voracious appetite from the country’s battery manufacturers.
Chariot’s tenement holdings are massive. Its flagship Black Mountain project in central Wyoming comprising 2,686 hectares alone following an expansion in March 2024 which saw a 206 percent increase in tenement area (with 218 contiguous claims added).
Abundant pegmatite swarms
Here, the mineralization of interest is hard rock lithium – also known as spodumene – which is found in granite pegmatites. Black Mountain contains a ‘swarm’ of these pegmatites across its licence territory and Chariot has defined them as being rich in the type of spodumene containing lithium, caesium and tantalum (LCT).
In February, Chariot reported the results of its maiden drilling program at Black Mountain, which had comprised eight holes, three of which intersected high-grade spodumene close to the surface, thus confirming the potential of Black Mountain LCT pegmatite swarms.
Additionally, the first drill hole intersected pyrite-pyrrhotite mineralization which could potentially be the peripheral portion of a significant body of potential base metal ore.
Reflecting on these results, CEO Shanthar Pathmanathan said the project – which is Wyoming’s first hard rock lithium discovery – was providing every indication of being a strong and economically viable one.
“This maiden drilling program has delineated a strongly mineralized lithium bearing pegmatite dike swarm with all three of the first three holes intersecting lithium at varying depths starting from 1.83 meters below surface and as low as 45.26 meters below surface,” he said.
“Drill hole 1 intersected 15.48 metres at 1.12 percent lithium oxide from 2.74 metres, including 4.27 metres at 2.46 percent lithium oxide. Drill hole 2 intersected 14.33m at 0.84% lithium oxide from 1.83m and drill hole 2 intersected 18.81m at 0.85% Li2O from 45.26m”
“The initial drilling results indicate the lithium mineralization, if confirmed at scale through additional exploration, is well-suited for providing domestically sourced lithium supply to the United States’ emerging lithium-ion battery manufacturing industry.”
In good territory
He added that Black Mountain’s production viability is boosted by its location and economically appealing infrastructure.
“The project is located in a tier 1 mining jurisdiction, serviced by well-maintained road, rail, water and power infrastructure,” Mr Pathmanathan said.
“Natural gas pipelines in the vicinity, along with the close proximity to battery plants and gigafactories, can be leveraged to further benefit the economics of the project.”
Chariot has announced that a second phase of work, focusing on drilling between 5,000 and 10,000 metres, is expected to commence in the third quarter of 2024.
A story of regional prospectivity
So, what was the catalystthat initially enticed the company to seek lithium in this state?
“Chariot was initially attracted to Black Mountain in Wyoming by a historic report in 1997 by Mark Ivan Jacobson of 60-centimetre long spodumene crystals,” Mr Pathmanathan said.
“We were also attracted by proximity of the Wyoming pegmatite field to the known lithium pegmatite field of the Black Hills of South Dakota.
“The company was fortunate enough to be the first company to undertake an aggressive staking program in Wyoming, resulting in the company now holding what we consider to be the most strategic land package for Lithium Pegmatites in Wyoming.”
Underpinning Chariot’s hopes for Black Mountain – and its six other project areas within the state – is its knowledge of the Wyoming Archean – Proterozoic shield, which yields LCT-type pegmatites in Wyoming and in other parts of the western United States.
The six additional project areas contain more than 700 LCT-type pegmatites, and Mr Pathmanathan said he expected these areas to produce the same exploration success as realized to date at Black Mountain.
But hang on, isn’t the lithium market in a slump right now?
Indeed, the price of lithium did crash below 100 thousand Chinese yen in December 2023 – from a high of 5 thousand yen in November the previous year and is still limping along at 109 thousand yen now.
This is chiefly driven by an oversupply to the market which several economic experts believe will continue for the next few years. Bloomberg NEF analyst Allen Ray Restauro has said for example, that supply would continue to outweigh demand, meaning that short-term rallies in the lithium price would not last.
By contrast, UBS Group Ag and Goldman Sachs in March reduced their 2024 estimates for lithium supply by 33 and 26 percent respectively. Nevertheless, Goldman Sachs warned that the lithium market was still in bear mode with supply so strongly in surplus.
Mr Pathmanathan said his projections were for a short-term oversupply of lithium – and subsequent low prices – followed by a trend of long-term demand, particularly from the focal point of Chariot’s exploration in the USA.
“We foresee a heavily under-supplied market in the long-term, particularly in the local United States market, as it seeks to decouple from the Chinese lithium supply to feed its rapidly growing United States lithium-ion battery manufacturing industry,” he said.
“At an SC6 (Chinese spodumene lithium) price of US$1,000 per tonne, it is estimated that almost 50 percent of potential new spodumene capacity are likely to be ‘shelved’ as it would be uneconomic to produce from these projects at the current price levels,” he said.
“With demand continuing to grow at double digit percentages annually, ultimately higher pricing paradigm will prevail.”
He added emphasized that Chariot had deliberately targeted projects with large-scale potential and high grade mineralization close to the surface, mindful offuture demand for lithium and other critical minerals in the United States, government’s subsequent support for this, notably the Inflation Reduction Act – which includes an emphasis on domestic and clean energy production and the Defense Production Act – which was amended in February 2023 stimulate greater funding for critical minerals projects.
Looking ahead, Mr Pathmanathan sees a focus on further exploration for Chariot, to define mineralization already observed and to see what else was to be found at Black Mountain.
“Chariot is reviewing the data from the Phase 1 drill program at Black Mountain to plan for the second round of drilling in the third quarter of 2024, with the objectives of testing the depth extent of already defined pegmatite mineralization as well as drilling out the interpreted extensions to the dike swarm,” he said.
“Prior to commencing drilling the company plans to extend the limits of the existing geochemical survey further east and remodel the ground magnetics to better define several magnetic low zones which the geologists have interpreted as potential larger pegmatite bodies at a depth of 50 to 200m below surface.
“The company is evaluating a two-pronged approach to drilling which includes a targeted drilling program that is permitted under the current disturbance limit and a more comprehensive drilling program upon approval of an EPO (exclusive prospecting order).”