Lithium miner Jindalee Resources Limited (ASX: JRL) shares are rocketing today, reaching a high of $1.82 in early trade.
After coming out of a trading halt, the company announced more lithium discoveries at one of its sites. The company's shares had been placed in a voluntary suspension on Friday in anticipation of a $9 million capital raising endeavour.
This follows the Jindalee share price being placed in a trading halt last Wednesday.
At the time of writing, shares in the mineral exploration company have retreated slightly to $1.70, up 11.4%.
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What did Jindalee announce?
In today's release, Jindalee gave an update on progress at its McDermitt lithium project in Nevada. The company advised that the site, which is 100% owned by Jindalee, has "significant zones of lithium mineralisation".
In 2 of the 4 drill holes, Jindalee discovered mineral ores that were more than 55 metres thick. In one case, the ore was 70 metres thick. All ores discovered had in excess of 1000 parts per million (ppm) of lithium, well above the 100ppm minimum required for commercially viable ore.
The miner said the ore was discovered in relatively shallow spots which bodes well as greater mineral abundance can be found deeper in the earth's crust.
The company expects to drill another 6 holes at the site soon. It initially planned to drill the holes last year but the coronavirus pandemic delayed operations.
Jindalee will hire an independent consultant to give a higher mineral resource estimate than provided previously.
In addition, the company will use the planned $9 million in capital to fund an expansion of its McDermitt lithium mine as well as gold and nickel mines in Western Australia. Jindalee will issue 6 million new shares at a price of $1.50 each.
Lithium is fast becoming a valuable commodity
Demand for lithium is booming as the world moves away from fossil fuels and towards renewable energy and battery storage. For example, last year total car sales decreased by 43% but electric car sales increased by 20%. A key element in electric vehicle battery manufacturing is lithium.
The third element's price in the commodity market also rocketed 20.6% in one day to reach US$85,000 a tonne. Over 12 months, its price has gone up by 82.8%.
Jindalee share price snapshot
This time last year, shares in Jindalee were trading at 31.5 cents each. Since then, the share price has accelerated 354.6% to sit at its current price. Many lithium miners share prices are on a similar trajectory.
Jindalee Resources has a market capitalisation of $79.3 million.
