Valuation underpinned by growing 1.1Moz Au resource with futuredrilling planned on lithium targets in WA’s premier lithium address.Kairos Minerals Limited is the old Mining Projects Group which was establishedin 1983. In May 2022, the Company underwent its most recent board reshuffleand is now led by Dr Peter Turner. At the same time, Kairos has pivoted towardsattempting to unlock the vast potential of its highly prospective Lithiumtenements in a Tier 1 mining region. Kairos is fast-tracking its Lithium potential,alongside growing/advancing its Mt. York Gold Project, with an aim of achievinga significantly increased resource from 1.1moz to 1.5moz in the near term. On the brink of a spodumene pegmatite discovery? Lithium drilling is expected to start in April 2023 at the Black Cat and Crystal Palacetargets at the Roe Hills Project (Yilgarn), next door to Global Lithium’s (ASX:GL1,market cap A$344m) Manna Lithium Project (32.7Mt @ 1.0% Li2O). At Black Cat,KAI is to drill a 2.7km Lithium soil anomaly & hopes to discover a Manna lookalike. Well-named Lucky Sump Prospect lies in a truly ‘fertile’ zone for lithium In the Pilbara, Kairos discovered spodumene-bearing pegmatites (up to 1.9% Li2O)just 3km from Pilbara Minerals’ (ASXLS, market cap A$12.5bn) world-classPilgangoora Lithium-Tantalum Mine and near Mineral Resources’ (ASX:MIN) largeWodgina Lithium-Tantalum Mine. Lucky Sump lies within a ‘fertile zone’ wherelate-stage pegmatite intrusions contain lithium (and tantalum) in the form ofspodumene – the holy grail The Mt York Gold Project that could become a super pit Out of the 1.1Moz Mineral Resource Estimate (MRE), 900koz comes from the 3kmlong single continuous deposit called the Main Trend. Lack of quality core hasmeant no structural targeting to drive drilling. Plus, there has been a lack of drillingat depth. All this is being resolved by testing the potential with a +20,000m RC-DDHdrilling programme which is now 50% complete and could push the MRE closer toKairos’ 1.5Moz - such a move would dramatically improve our valuation. Over 150% upside on gold alone, but lithium success could see 340% Peer group analysis shows that the gold interests could attract a valuation ofA$95m on their own. Establishing a 10Mt @ 1% Li2O resource could conservativelyadd A$84m, suggesting A$0.080 per share. That is for the future. For now, weinitiate coverage of Kairos with a target price of A$0.046 and a Strong Buy stance.
Tier 1 gold country The flagship Mt York Gold Project lies 100km south of Port Hedland in an area that undoubtedly represents Tier1 gold country, it being the home to many large gold deposits. In 1994-98, Lynas Gold mined 125,493 ounces ofgold here. The project lies in a well mineralised district for gold and lithium, which forms part of the PilgangooraSyncline, found in the western part of the Pilbara. That structure is known to contain greenstones of variousorigins. Principally, the Pilgangoora Syncline consists of a folded sequence of mafic and felsic volcanics,sediments and Banded Iron Formation (BIF). At the Main Trend, the mineralisation occurs at the boundaryseparating one rock body from another, with both the footwall and the hanging wall of the BIF being stronglymineralised. On top of that, Mt York appears to be in a fruitful LCT zone. Already, spodumene-bearingpegmatites have been discovered with 5m of pegmatites recently intersected in Hole KMYC216. Meanwhile, theIron Stirrup and Old Faithful deposits lie in the East Strelley Formation, 4km and 8km to the north of the MainTrend respectively.
LS, market cap A$12.5bn) world-classPilgangoora Lithium-Tantalum Mine and near Mineral Resources’ (ASX:MIN) largeWodgina Lithium-Tantalum Mine. Lucky Sump lies within a ‘fertile zone’ wherelate-stage pegmatite intrusions contain lithium (and tantalum) in the form ofspodumene – the holy grail
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