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ASX Runners Of The Week - Gold Mountain on mission to scale lithium heights in Brazil

Updated: Mar 21

Gold Mountain doubled its stock after revealing a big parcel of land in Brazil’s “Lithium Valley.” Credit: File

At one point not so long ago, Gold Mountain was finding it hard to live up to its name.

Gold in Papua New Guinea is hard to find at the best of times – and even harder to drill. The only easy thing is spending money, but that also gets hard when the pot is dwindling.

So when the world is screaming for lithium and the crowd is charging to Brazil, sometimes it is easier just to channel one’s inner sheep and follow … or try and beat the others there.

And so it was as Gold Mountain’s stock doubled from 0.0035 cents to 0.007c last week after it unveiled a massive land acquisition in prime lithium real estate in Brazil. The market flourish made it Bulls N’ Bears’ hottest ASX runner of the week.

Management says its proposed purchase for a 75 per cent share in a package of 3921 square kilometres gives the company the biggest footprint of any Australian explorer in the region as it looks transform itself from gold explorer to lithium player.

The deal would see Gold Mountain expand its current joint venture with Mars Mines to include a three-quarter stake in all of its new partner’s current holdings in the South American nation. The land package includes 607sq km inside Brazil’s “Lithium Valley” in the State of Minas Gerais.

After building its reputation on iron ore, Minas Gerais is fast-becoming known as a lithium hub.

Headlining the companies beavering away in the neighbourhood is Sigma Lithium with its Grota do Cirilo project and a resource of 85.86 million tonnes going 1.43 per cent lithium. Gold Mountain’s ground also butts up against Latin Resources’ Salinas lithium project, which includes the Colina lithium deposit that hosts a mineral resource of 13.3 million tonnes going 1.2 per cent lithium.

However, Gold Mountain’s land stretches beyond the hot spot and into other areas which are also known to house the commodity. Its parcel in the State of Ceara sits in another region which has historically mined lithium and management believes the geology of its mineralisation is related to Oceana Lithium’s nearby Solonopole lithium project.

Fieldwork has commenced on Gold Mountain’s sizeable tenure in Brazil. Credit: File

Fieldwork has commenced on Gold Mountain’s sizeable tenure in Brazil.

Fieldwork has commenced on Gold Mountain’s sizeable tenure in Brazil. Credit: File

Some of Gold Mountain’s 204 exploration licences also sit in greenfield areas which are yet to be tested for lithium, giving the explorer plenty of blue-sky opportunities.

The company currently has boots on the ground and is getting its hands dirty with stream sediment, rock chips and soil sampling. From there it is aiming to have a drillbit hitting some targets before the Christmas presents are unwrapped.

A maiden resource is pencilled in for next year.

In July, Brazil relaxed rules on lithium exports in an effort to cement itself as a global supplier and self-described “safe haven”. It obviously wants to latch onto the growing demand backed by the electric vehicle revolution.

The nation is looking to expand its lithium production, especially in Minas Gerais, and the government expects more than US$2.81 billion (AU$4.2 billion) in investments in the sector by 2030. As it stands, Brazil accounts for 1.5 per cent of the world’s lithium production, however, it is predicted to reach five per cent in the next 10 years.

The shift into lithium is a serious pivot for Gold Mountain given its previous focus was squarely on Papua New Guinea gold.

But after running on vapours and then dealing with the hurdles of COVID, the company was open to an approach from Mars Mines, which recapitalised and started to vend in its lithium projects.

While Gold Mountain’s review of its gold projects is ongoing, it is fair to say its fresh management team has gone all-in on its new venture in Brazil. That might even mean it is time to think about a name change.

Elsewhere, vehicle fleet software provider Eroad saw its share price leap nearly 76 per cent after a takeover bid by Canadian heavy-hitter Constellation Software. That news saw its stock jump from 68 cents to $1.20 across seven days.

Toronto-listed Constellation Software is chaired by Canadian billionaire venture capitalist Mark Leonard, who fired off a $134.5 million takeover bid for Eroad after landing nearly 18 per cent in the transport fleet management outfit.

The offer came via Constellation’s subsidiary Volaris, which has scooped up hundreds of software companies since it was founded.

Estrella Resources wasn’t far off the pace either with a 75 per cent price hike, week on week, after the market seemed to like its new hi-tech approach to an electromagnetic survey for nickel and copper. Its stock touched 1.4c after closing out the previous week at just 0.08c.

We were the first to successfully use the revolutionary e-vibe seismic system in W.A. and our team is now employing a world-first in geophysical surveying methods. This is next-gen geophysical system technology that even the majors have not yet utilised. Estrella Resources managing director Chris Daws

Finally, Mont Royal Resources ran hard on the promise of the return of results from its April copper-gold drilling campaign in Canada, which are still pending at the assay labs. Its stock went from 8.8c to 15c.

Sometimes you just have to have a crack.

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