I'll start with a qualifier that I'm no drilling expert - and to be honest, it's been ages since I looked at the finer details for AGY.
That said, I strongly suspect this is a value for money - versus - cost benefit move by AGY.
Essentially, AGY's resource is a dry salt lake (ie Salar), with the resource sitting beneath the surface. Putting it simply, (and as
@Naylor-1 already said) AGY put a straw in the ground and suck out the lithium rich brine, which they dry in the sun and then process in their plant.
However, this approach to "mining" is very much the exception when it comes to providing bonafides that investors can relate to (and that AGY can legally claim in ASX announcements). Most investors are used to the concept of digging "stuff" out of the ground, hence holes are drilled to see what lies under the ground, eg what ratio of gold to dirt is sitting under the surface. In the case of a salar, it's more about water flow rates and lithium concentration rates.
So essentially, if AGY want to be able to publicly announce/advertise their resource size/life of mine, the most obvious approach is to drill deeper.
From memory, their previously deepest drill was 102m (which remained open at depth), so successful drilling to 300m - is a simple way to exponentially increase the value of the asset at Rincon.
The risk is that it shows there is a "bottom", ie no longer open at depth.... so whilst I see it as a very positive move forward for AGY (and I suspect is a requirement to satisfy significant off take agreements and/or justification for investment in increasing the production plant), I suspect that during this drilling period, we'll see the share price tread water.
If the drilling proves fruitless, the current JORC and subsequent estimates remain valid - but the prospect of the drilling expanding the JORC is worth undertaking the drilling program.
Personally, I think the drilling will prove successful. Pablo knows this salar probably better than the palm of his hand. I don't think he'd set a 300m target without being confident of what it will produce.
And let's not forget, AGY isn't a one resource prospect... I look forward to seeing what Tonopah will reveal!
(20min delay)