SLM kicks off its second lithium drill program in Brazil

Our 2023 Small Cap Pick of the Year Solis Minerals (ASX: SLM) just kicked off a 3,600m drill program at its Brazilian lithium project.

SLM will be doing a total of ~3,600m of diamond drilling targeting four separate pegmatites sitting over ~1.5km of strike.

The same pegmatites where SLM returned rock chip samples grading up to 7.6%.

Below is SLM’s drill plan with the areas being targeted:

At the same time, SLM is also preparing to drill out its newly acquired ‘Mina Vermelha’ project with a ~1,300m diamond drilling program it expects to kick off in the coming weeks.

See our deep dive on SLM’s newly acquired project here: SLM to drill new Brazil lithium project in 4 weeks

So over the next few months we will get to see two drill programs run concurrently across two of SLM’s projects.

Ultimately we are hoping SLM can drill out multiple thick lithium intercepts and declare a new lithium discovery - following in the footsteps of its brazilian peers $737M Latin Resources and ~$5BN Sigma Lithium.

Here is where we think SLM sits in the same hard rock lithium discovery playbook that brought Latin and Sigma to where they are today:

• Map outcropping pegmatites - SLM has already mapped the outcropping pegmatites over a ~1.5km strike area. ✅
• Sample the outcrop to see if there is lithium - SLM has multiple rock chip samples with lithium grades as high as ~7.6%. ✅
• Confirm the presence of spodumene - spodumene is the source rock for the majority of the world’s lithium production. SLM has confirmed spodumene presence across four of the outcropping pegmatites its drilling. ✅
• Drill below the outcrop to see how much high grade lithium is there - SLM is running a 3,600m diamond drill program to try and do this now. 🔄

What’s next for SLM?

Drilling results 🔄

With drilling now underway we will be watching out for the following:

• During drilling - pretty simple, we want to see more of the same... more spodumene visuals. Typically if a company is hitting visual spodumene in its cores there is a good chance there is lithium in the intercepts.
• After drilling - it will be all about the assay results. Spodumene in the drill cores is a good sign but as always, with exploration, it will be the assays that tell the full story.

Ultimately we want to see SLM hit intercepts with lithium grades above the levels that are typically considered economic.

It’s never an exact science when it comes to grades, but the general rule of thumb when it comes to lithium projects is that grades of ~1% are considered economical.

The shallower the mineralisation, the lower the grades can be - the deeper the mineralisation, the higher the grades will need to be.

As a result we have set our expectations for SLM’s drill program as follows:

• Bull case (exceptional result) = Lithium grades > 1.5%
• Base case (good result) = Lithium grades 1-1.5%
• Bear case (poor result) = Lithium grades <1%

If SLM hits high grade lithium then it should be enough for the company to declare a new discovery.