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Kidman Resources Ltd hits lithium bonanza at Mt Holland project

Kidman Resources Ltd (ASX:KDR) has seemingly struck the mother lode at its Mt Holland gold project, acquired earlier this year.

In an unexpected windfall, Kidman has drilled at the project and lithium oxide assays returned bonanza widths and grades in two samples of drill core from a gold exploration program by Mt Holland’s previous owners.

The share price surged on the news.

The assays include 54.2 metres at 1.53% lithium oxide from 37.8 metres and 33.5 metres at 1.39% lithium oxide from 294 metres. These results look to be among the best ever reported from Western Australia.

With the lithium review still in process, the company may find further historically mapped pegmatites.

Kidman is also designing an exploration program for an adjacent, 6 kilometre long pegmatite.

Kidman’s stated objective in its review of the lithium potential at Mt Holland was for shareholders to receive the full value from a potential sale of lithium rights.

Mt Holland, where the lithium resource has been identified, hosts combined inferred, indicated and measured resources of 928,500 ounces of gold.

Considering it paid $3.5 million for Mt Holland, equivalent to $3.77 per resource, Kidman has a bargain on its hands.

Kidman has sufficient cash reserves for its exploration initiatives considering with $1.74 million as at end-March 2016. In addition, it raised a total of $5.04 million from a rights issue last month. During the March quarter, Kidman produced and sold 775 ounces of gold.