A resource upgrade is a technical process. Park your hope for a second and consider the facts.
The "current" resource estimate was developed based on hundreds of brine samples from dozens of wells, coupled with information from hundreds of diamond core samples.
Besides some model recalibration/adjustment, there are two key ways that the average Li grade for SDV could be significantly increased:
1/ Resampling from existing wells, yielding (somehow?) significantly higher Li grades than prior testing has shown.
2/ New wells drilled that yield VERY significantly higher Li grades than previous wells.
Is there ANY evidence of (1) happening? Not AFAIK. Is there any logic/rationale to this being reasonable..? Possibly some new grade info from production well flow testing etc, but I highly doubt that a step-change (i.e. 30% as you suggest) in average grades could be reasonably expected.
As for (2), we know that a few (literally only a few) wells have been drilled since 2013. Look at the map below. In our remaining Catamarca tenements, the "new" wells are 21 and 23, and there is also mention of 2 more recent wells (25 and 26) that are not shown on this map. At least one of these (25 or 26) is near the red X at the bottom.
So, HOW on earth could the average grade of the resource increase from mid 700's to high 900's, as you suggest it should, in consideration of the facts? Based on someone else's results from drilling circa 20km away? Really?
Do some basic maths and actually substantiate what might be reasonable to expect. For example, even IF the few new wells delineated additional resource that say added 30% to that previously defined, then in order to increase the average Li grade of SDV by the amount you are suggesting would require those new wells to have grades of over 1700 mg/L:
Do you really think this is likely? If so, how and why?
Even if they somehow doubled the resource, the "new" brine would need a grade of 1200 mg/L in order to push the overall average grade to what you are "expecting": 100% @ 750 mg/L +100% @ 1200 mg/L = 200% @ 975 mg/L
Please think things through before setting yourself and others up for disappointment.
If the revised resource estimate comes in with higher average Li grade, GREAT, but to "expect" a 30% increase is nonsense imo, based on what we KNOW. Anything is "possible", sure, but what else could there really (and reasonably) be that we don't know..?
Let's revisit this when the announcement lands.
DYOR
GXY Price at posting:
$3.22 Sentiment: Buy Disclosure: Held
