Drill Contract Signed: LYN’s Targets to be Drilled Next Month
Countdown begins: Lycaon Resources' drill program locked in for early November as it chases West Arunta glory
All the boxes are ticked. Our investment, Lycaon Resources (ASX:LYN), will begin its maiden drill campaign in early November on its high-potential niobium and rare earth targets in the West Arunta.
In a flurry of strategic moves, Lycaon has secured the permit to drill and today announced the selection of an experienced drilling contractor. These decisions demonstrate the company's proactive approach and set the stage for what could be a transformative event.
As investors, this gets our blood going; the countdown to drilling is here.
The West Arunta region has already produced some spectacular success stories. WA1 Resources skyrocketed from 20c to $22, while Encounter Resources' value surged by hundreds of millions following successful drilling.
With LYN currently trading at 31c and sporting a modest $15 million market cap, we can't help but wonder if we're on the ground floor of the next West Arunta success story.
Hunting Niobium and Rare Earths
Lycaon is exploring for two critical minerals with bright futures:
Niobium: Makes steel lighter and increases the efficiency of batteries in electric vehicles.
Rare Earths: Essential for electronics, electric vehicles, and defence technology.
As it stands, China produces about 85% of the world's refined rare earths, and the US imports nearly three-quarters of its rare earths from China. This dominance has global powers scrambling for alternative supplies, highlighting the strategic importance of new discoveries.
Currently, there is no supply of niobium out of Australia and only one rare earth mine, so any discovery for LYN will be company-making.
All Systems Go for Drilling
With all approvals in hand, LYN is now free to drill their previously untested Stansmore target in Western Australia’s West Arunta region.
Lycaon has identified a significant magnetic anomaly at Stansmore. The anomaly has unique geophysical characteristics, and advanced modelling shows it is a 500-metre-wide magnetic feature that starts just below the surface.
In layman's terms, they’ve detected something underground that's causing a disturbance in the Earth's magnetic field. These anomalies are often caused by the presence of valuable mineral deposits.
This anomaly also bears a striking resemblance to the ones that led to major discoveries by WA1 and Encounter Resources. It's also similar to the anomaly that led to the discovery of the 8-million-ounce Havieron gold-copper deposit.
These similarities are like breadcrumbs leading to the mining holy land, but until drills start turning, it's all educated speculation.
If next month's drilling lives up to the promise of these early signs, LYN might just become part of West Arunta folklore alongside WA1.
“We are highly encouraged by the recent further geophysical modelling completed by industry expert Terry Hoschke … this area has proven to have a very good strike rate of success in drilling regionally significant geophysical anomalies like our Stansmore target.”
Thomas Langley, LYN Technical Director
Drill Contract Awarded
LYN wasted no time in awarding a drilling contract today to Topdrill Drilling, a company with an extensive history of working in the West Arunta.
This is sharp work from a diligent management team eager to get those drill bits spinning.
To complement the contract, LYN secured $180,000 in funding from the Western Australian government earlier this year.
This funding is given to companies that show potential for success in previously untested regions, which is precisely what LYN represents with its Stansmore target.
Success in the Region
It would be remiss not to drill further into WA1's continued success in the West Arunta at similar targets.
Just over two years ago, they drilled a like-for-like target of LYN's Stansmore and hit the proverbial jackpot. That success has seen WA1 go from a 20c stock to a peak of over $22.
One central discussion point was what metallurgy would be like. Metallurgy is the process of extracting, refining, and processing metals from ores to make them usable for various industrial purposes.
Last week, WA1 reported incredible metallurgy results, highlighting the value of not only the metal in the ground but also the ability to process it.
The West Arunta is the home to a Tier 1 discovery; could Stansmore be next?
As we count down to drilling, we're expecting the buzz around LYN to grow louder. We believe the valuation gap between LYN and its peers with similar targets is glaring. Of course, this gap exists for a reason - LYN still needs to prove what's in the ground. But it's the kind of disparity that makes value investors sit up and take notice.
This is exploration in its purest form. Virgin ground, high-potential targets, and a lean market cap that is primed for a potential re-rate.
Next month the drill bits will start spinning, and we'll be on the edge of our seats. But, as always, mineral exploration is risky, and success is never guaranteed.
What we can say is LYN has done its homework. They've identified a promising target, secured the necessary approvals and funding, and brought on experienced contractors.
For those of us watching the West Arunta, the next few months promise to be exciting. Will LYN write its chapter in the region's success story? Only time - and those drill results - will tell.
