Lithium explorers are feeling down and out due to a slump in prices but one managing director says that’s the perfect time to buy.
According to Bell Potter Securities, most lithium stocks were down 30-40% in January.
Cygnus Metals is one of those, down 42.5% in January.
But managing director David Southam has seen this all before, having been a director of lithium success story Kidman Resources before it was sold to Wesfarmers in 2019 during the last “lithium winter”.
“If there’s ever a time to be looking at lithium stocks, now is the time to look into it,” he told the RIU Explorers Conference.
Cygnus has a market capitalisation of just A$20 million but is quietly working to tick off milestones at its three lithium projects in Canada.
A key achievement last year was the announcement of a 10.1 million tonne at 1.04% lithium oxide maiden resource at the Pontax project.
Southam pointed out the resource was delineated after just 10,000m of drilling.
“We’ve got 44km of strike and we’ve really only tested a couple [of kilometres] so there’s plenty more to be found there,” he said.
“We’re drilling there now.”
Pontax is just 30km south of Arcadium Lithium’s James Bay project, which is North America’s largest lithium deposit.
Cygnus says the almost identical mineralogy between the two deposits indicates the same or similar source granite.
The company also owns the earlier stage Auclair project, which is 60km from the 55.7Mt Whabouchi deposit.
Spodumene-bearing pegmatites have been confirmed over a 6km strike length. Further field work, including soil sampling, is underway across the large land package.
“It’s not necessarily sexy, but with 416 square kilometres, it’s how you pinpoint where to explore,” Southam said.
Cygnus’ third James Bay lithium project is Sakami, which is just 44km from Patriot Battery Metals’ Corvette discovery.
The project has never been explored for lithium and initial work was cut short by last year’s wildfires in the region.
Cygnus’ 823 square kilometre landholding in the James Bay lithium district makes it the largest ASX-listed landholder in Quebec.
“We’re also next to large deposits,” Southam said.
“All the major companies are in the region but exploration is something which is missing in all of their portfolios.”
Cygnus has also made a clay-hosted rare earths discovery at Bencubbin in Western Australia.
“This is really flying under the radar,” Southam said.
The company has discovered large-scale rare earth element enrichment over a 22km strike length and is now awaiting metallurgical test work from ANSTO.