Why the Jindalee Resources (ASX:JRL) share price is rocketing 55% higher

The Jindalee Resources Limited (ASX:JRL) share price is ending the week strongly after an update on its lithium project in the United States.

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In morning trade the Jindalee Resources Limited (ASX: JRL) share price has been a very strong performer.

At the time of writing, the lithium developer's shares are up 55% to $2.86.

Why is the Jindalee Resources share price zooming higher?

Investors have been buying Jindalee Resources shares this morning following the release of an announcement after the market close on Thursday.

That release relates to the 100% owned McDermitt Lithium Project in the United States and its mineral resource estimate.

According to the release, the company has updated its mineral resource estimate following the completion of drilling at the end of December.

The company notes that the McDermitt Lithium Project now hosts a combined Indicated and Inferred Mineral Resource Inventory of 1.43 Billion tonnes at 1,320ppm Li for total of 10.1 Million tonnes Lithium Carbonate Equivalent (LCE) at 1,000 ppm Li COG.

Management advised that this makes it the largest lithium deposit in the United States by contained lithium in Mineral Resource, eclipsing Lithium Americas' Thacker Pass deposit (8.3Mt LCE at 2,000ppm Li COG).

It commented: "The results from the 2021 Mineral Resource update and the material uplift in contained lithium reinforces the significance of the McDermitt project as a potential source of future supply to the rapidly growing US battery manufacturing industry. Jindalee intends to continue de-risking the project through further metallurgical studies aimed at the downstream processing flowsheet ahead of a potential Scoping Study in the June quarter of 2021."

What now?

Jindalee Resources advised that it will now finalise its 2021 drill program based on the updated data with the aim of infilling and further upgrading the resource and to define the full extent of the lithium mineralisation at McDermitt.

Applications for drill permitting are expected to be submitted later this month.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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