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Dear Fellow Investor,
I missed out on Far Resources the first time around. I’m not going to miss it again.
You see, I’ve had my eye on Far Resources for a while. The company traded as high as double current levels when lithium plays were hotter.
I had been introduced to the company before that last rally. But I failed to move quickly enough, and the share price soared before I could recommend it to my Gold Newsletter readers.
Now the share price has come back to bargain levels thanks to a general market correction. I decided I’m not going to miss the opportunity again, and just recommended it in the April issue of Gold Newsletter.
The timing is perfect right now — because Far Resources is not only a far better company than it was a year ago, but it has recently uncovered some exciting new targets that could dramatically add to its lithium resources.
The Next Big Lithium Play
There is no production of lithium in Canada today. However, clearly, there are large and potentially economic lithium-bearing deposits of spodumene (a mineral that is a key source of lithium) in hard-rock pegmatites, a type of granite, in many areas of the country.
In fact, three companies are in development in Canada right now, with significant spodumene-based lithium resources. One of these three is of particular interest to us at this point; their market caps are already large, while financings and construction are moving along slowly.
In other words, the thrill has passed.
Not so for Far Resources, which is the fourth company driving to become a major lithium producer in Canada.
Today,
Far is still little-known and little-appreciated, with a relatively small market cap of around C$40 million. But note that this is a very exciting time for the company and its shareholders, as near-term catalysts could well drive this stock to crazy new heights.
Consider what’s coming in the days and weeks just ahead...
1) Reporting of drill assays from the fourth round of drilling at the company’s Zoro project in Manitoba. Already, the company has reported visible spodumene from core for up to 35 meters at Dyke 1, and up to 36 meters at Dyke 8.
Excitement is building for the next two-three news releases, which will report the numbers on these exciting visual indications.
2) Start of drilling at Far’s Hidden Lake Lithium project in the Northwest Territories, where the company is earning up to a 90% interest. The project area is highly prospective based on extensive surface sampling, trenching and metallurgical testing.
Drill targets are set and logistics are completing for the start of drilling this month.
3) Completion and reporting of metallurgical test work at Zoro to confirm that a concentrate from gravity separation of well above 6% can be shipped directly from site.
4) Establishing relations with battery producers and other end-users — that is, buyers — of lithium. This is already in progress.
5) An initial lithium resource estimate at Zoro, to include all four rounds of drilling, plus the 78 holes drilled earlier in 1955-56.
6) Closer definition of the pending spin-out of the company’s Winston Gold Project in New Mexico into a newly-forming public company named Sequoia Gold. Winston is a prior-producing, high-grade gold mine with substantial potential.
Shareholders of Far will become shareholders of Sequoia as well without additional cost.
7) Steady reporting of drill results from Hidden Lake, and start of the fifth round of drilling at Zoro.
Management is confident that all seven of these catalysts will happen this year.
In fact, the company already has the cash needed to execute on them, driving rapid resource growth for the company and investor awareness that Far can become the fourth Canadian-based producer of lithium.
As you can see, this is a very exciting time for shareholders in this company.
Why Do We Need Lithium?
Virtually all battery-grade lithium comes from either brine solutions (mostly in Chile, Argentina and China) or from hard-rock spodumene (in Australia, and potentially the U.S., Canada and Finland). Both sources are a high percentage of total global production.
CLICK HERE for a brief primer on the current lithium market — including what it is and why growing demand cannot yet be met.
The Near-Term Catalyst:
Far’s Zoro Project
At its Zoro project, Far controls no less than eight lithium-bearing pegmatite dykes — vertical or near-vertical intrusions, often occurring in sets or swarms.
As you’re about to see, there’s very good potential to discover even more of these dykes at Zoro.
The company has performed four rounds of drilling on the 100%-controlled, 3,600-hectare project, which supplement the 78 holes drilled historically in the 1950s.
The company is finding exceptional grades and widths, hitting up to 1.4% Li over 49.8 meters.
Happily, the pegmatites thicken at depth, where they are still argely untested. An additional 19 holes drilled in February this year will be reported in the days just ahead.
But here’s a tantalizing new factor about exploration at Zoro....
It’s already known that soils tested to be rich in lithium are positioned directly above lithium-bearing dykes at Zoro. (This was how Dyke 8 was discovered with the last round of drilling.)
This factor opens up the deposit to significant growth, management believes, due to a large number of undrilled, high-grade lithium soil anomalies. Concurrently, soils rich in tantalum are also being drilled, and are generally also found with high lithium values.
This is a very exciting aspect of what lies ahead for Zoro, and I’m just presenting the overview here. For more on how it all fits together, CLICK HERE.
And consider this as well: Far’s lithium projects compare very well with one of Canada’s more advanced lithium resources, one that boasts a completed bankable feasibility study. CLICK HERE to see why.
Even More:
Far’s Hidden Lake Project
On March 1 this year, Far announced a new option agreement to acquire up to a 90% interest in the Hidden Lake project in the Northwest Territories in Canada.
The previous operator, 92 Resources, performed significant surface work including trenching and channel sampling of several lithium-bearing spodumene pegmatite dykes. The 308 samples boasted an average lithium concentration of 1.03% Li2O, with surface samples testing up to 3.3% Li2O.
Metallurgical testing achieved an overall extraction rate of 97%, indicating that industry-standard lithium extraction techniques will be workable at Hidden Lake. The project is drill-ready and start of drilling will be announced in the near term.
And A New Gold Company...For FREE
As noted, Far’s portfolio includes not only two promising lithium projects, but also the Winston gold project. Better yet, the company is in the process of spinning this valuable gold asset out into a separate company called Sequoia Gold.
The pending spin-out of this high-grade, prior-producing gold-silver asset in New Mexico will provide tremendous upside potential for Far shareholders because they gain a stake in two companies with meaningful projects.
Check sampling of dump material by Far management during their due diligence site visit confirmed the occurrence of local very high-grade silver (more than 1kg/t) and gold (more than 25 g/t) values.
And this was the material that previous operators were throwing away.
The Secret Will Soon Be Out
I’ll tell you what I just told my Gold Newsletter subscribers: There is an urgency to this recommendation.
Consider that the company recently reported visual confirmation of wide intercepts of spodumene in drill holes.
That whet the market’s appetite for the actual assay results...which are expected very soon.
Longer-term, Far’s geologists will use the data from the recent work to build a three-dimensional model for grade and tonnage. Looking at the bigger picture, the grades at Zoro are quite good, and Far’s job will be to prove up a more-significant resource at those grades.
Given the recent drill results, the fact that surface samples have demonstrated exceptionally high grades and the on-going discovery of new dykes, I’ve concluded that the chances are excellent that the company will prove up a substantial hard-rock lithium resource at Zoro.
With systematic field exploration of the project ongoing and the results of this latest drill program to be incorporated into a resource estimate, there are a number of potential news flow catalysts for Far Resources’ share price in the coming months.
Add in the longer-term potential of its Hidden Lake lithium project in Northwest Territories and the impending spin out of its gold asset in New Mexico, and you have a news-making lithium company with a gold kicker.
To participate in that kicker, though, you’ll need to own Far Resources prior to the spin out.
The current lithium market appears to be cooperating by giving us a good entry point for Far prior to the coming flurry of news. It’s a buy.
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