Australasian Gold (ASX:A8G) share price rockets 31% on lithium discovery

Here’s why this ASX share is rocketing higher…

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The Australasian Gold Ltd (ASX: A8G) share price has been a strong performer on Tuesday.

At one stage the mineral exploration company’s shares were up 31% to 85.5 cents.

The Australasian Gold share price has pulled back a touch since then but remains up 23% at 80 cents currently.

Why is the Australasian Gold share price shooting higher?

Despite what the company’s name may imply, the Australasian Gold share price is surging higher today following the discovery of a very different metal.

According to the release, the company has made a high-grade lithium discovery within pegmatite at its Mt Peake lithium project in the Northern Territory.

The release explains that rock chip samples from ELA 32830 returned high-grade lithium mineralisation of up to 1.61% Li2O and 223ppm tantalum (Ta) within outcropping pegmatites.

The discovery comes less than three months after the company pegged the tenement in late August and is along a strike of known spodumene-bearing pegmatites located in the adjacent EL26848 owned by Core Lithium Limited (ASX: CXO).

Core Lithium recently announced the construction of the Finniss Lithium Project in the Northern Territory.

Management commentary

Australasian Gold’s Managing Director, Dr Qingtao Zeng, appears cautiously optimistic on the future.

He said: “While it is only one high grade sample for now, it proves that the area holds significant potential for the identification of further lithium bearing pegmatites. Importantly, only one sample (JC001) was taken from the patchy outcropping pegmatite which could be traced over 250m in length and open both northwest and southeast.”

“I would like to sincerely congratulate our exploration team members for their hard work. Now we look forward to seeing just how much lithium there is in our project and proving up a deposit through further work. The next six months will be exciting for A8G as we are well funded to accelerate exploration and commence maiden drilling,” he added.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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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