The Piedmont Lithium Ltd (ASX: PLL) share price soared more than 200% in a week following the announcement of an offtake deal with Tesla Inc (NASDAQ: TSLA). With Tesla’s intentions to localise the lithium supply chain within Nevada, could these ASX lithium shares with United States operations be the ones to land a deal?
ASX lithium shares in the US
Ioneer Ltd (ASX: INR)
Ioneer is an exploration company currently focusing on the development of its Rhyolite Ridge lithium-boron project in Nevada. Following its definitive feasibility study, it highlighted well defined and reliable operating cost and capital cost estimates. The project would have an all-in sustaining cash cost of US$2,510 per metric tonne of lithium carbonate placing the project at the very bottom of the global lithium cost curve.
On 31 August, the company announced that its plan of operations for the Rhyolite Ridge lithium-boron project had been accepted by the Bureau of Land Management. The plan will now undergo an environmental review followed by preparation of an environmental impact statement (EIS). Ioneer is targeting being ‘construction ready’ in Q2 of 2021.
Jindalee Resources Limited (ASX: JRL)
Jindalee Resources holds interest in tenements in the US, Tasmania and Western Australia prospective for lithium, magnesite, gold, diamonds, nickel and iron ore.
Jindalee owns the McDermitt project in Oregon which could be a source to provide long-life and low-cost lithium to the US electric vehicle battery market. The company’s metallurgical test work to date has been very encouraging, indicating high lithium recoveries and the potential to be one of the largest lithium deposits in the US. Moving forward, the company has proposed a drilling program to the Bureau of Land Management for permitting. Drilling is expected to commence in October, subject to final approvals.
The nature of microcap exploration companies is highly risky with many projects never making it to the production phase. In the case of Piedmont Lithium, the company is still undertaking its definitive feasibility study with a recent US market initial public offering (IPO) for additional capital. In its Tesla deal, the start date for spodumene concentrate deliverables is planned to commence between July 2022 and July 2023 based on the development schedules of both parties. There are still many inherent exploration, operational and capital-related risks to overcome between now and the planned start date.
Nonetheless, Ioneer and Jindalee represent two ASX lithium shares that are within close proximity of Tesla with highly prospective lithium projects.
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Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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