Resources investor Tolga Kumova is the latest high-profile mining sector figure to wade into the hot Pilbara lithium sector, getting exposure on Friday to tenements in the geological region known as the Tabba Tabba shear.
Mr Kumova is the biggest shareholder in micro-cap explorer Industrial Minerals, which doubled in value on Friday after buying an option to extract lithium from tenements owned by an unlisted quarrying company.
Tolga Kumova was the former managing director of Syrah Resources and has invested in numerous small-cap resources groups. Michael Quelch
Industrial Minerals told the ASX that only one of the 442 holes drilled on the tenement previously had been assayed for lithium; but that one hole contained relatively high-grade intercepts of 3.73 per cent lithium.
Those assays were conducted in the 1990s when the tenement was being explored for feldspar, sources said. At the time, lithium was a low-value byproduct of little interest to investors and explorers.
Industrial Minerals shares were at 45¢ this week but traded as high as $1.08 on Friday morning before closing at $1.005.
Investor enthusiasm towards Friday’s deal comes after an intense fortnight of dealmaking in the lithium sector, particularly in the region around the tenements acquired by Industrial Minerals.
The tenements are within a 20 kilometre area that is being closely watched by acquisitive lithium giants Mineral Resources and Sociedad Quimica Y Minera. SQM bought exploration ground in the region earlier this week off Gary Morgan’s Haoma Mining, shortly before launching a $1.63 billion takeover bid for fellow Pilbara lithium explorer Azure Minerals.
The Industrial Minerals tenements are also close to Wildcat Resources’ Tabba Tabba project; The Australian Financial Review revealed last week that Mineral Resources had been sounding out Wildcat shareholders with a view to buying their stock.
Exploration company Calidus Resources told the ASX this week that Fortescue Metals has also found a lithium resource in the Tabba Tabba shear. Fortescue declined to comment this week when asked by The Australian Financial Review if it had found a significant lithium resource.
Industrial Minerals will have to pay $50,000 in cash and $100,000 in shares if it takes up the option acquired on Friday. It will also have to fund the first $100,000 of drilling.
A former stockbroker, Mr Kumova owns just over 12 per cent of Industrial Minerals. He made his name in the first battery minerals boom as chief executive of graphite producer Syrah Resources. He then became a major shareholder in numerous small-cap miners including New Century Zinc and Alderan Resources; most of those companies rode both the boom and the bust in the battery minerals sector between 2015 and 2020.
Mr Kumova was awarded $275,000 in January after the Federal Court ruled he had been defamed by Alan Davison, a prominent social media user who had posted about Mr Kumova under the pseudonym Stock Swami.
While 3.73 per cent lithium is on face value an encouraging intercept, the true prospectivity of a resource depends on whether such hits extend over a larger area, and also on whether the lithium occurs with deleterious elements that make extraction harder.
Friday’s acquisition was driven by Industrial Minerals chief executive Jeff Sweet, who is the son-in-law of legendary explorer Mark Creasy.
Mr Creasy is a substantial shareholder in Azure Minerals and also owns 40 per cent of Azure’s Andover lithium asset, making him a crucial player in the battle for control of Azure.
Gina Rinehart is understood to be building a stake in Azure, suggesting a bidding war may erupt for the early-stage explorer.
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