Southern Gold Ltd (ASX:SAU) is moving to create a domestic supply chain in South Korea to feed one of the world’s major lithium battery manufacturing players and has lodged licence applications over five areas prospective for lithium mineralisation.
These projects cover a total of 454 square kilometres and lithium anomalies have been identified from an historical country-wide stream-sediment sample survey by Korea Institute of Geoscience and Mineral Resources (KIGAM).
Samguen, Seobyeok, Cheongsong, Yeongdong and Buyeo are all at greenfield stage with limited prior exploration and no drilling. The prospective geology includes pegmatites and granites mapped by KIGAM.
No South Korean producers
There are currently no producing lithium mines in South Korea despite its prominence in lithium battery manufacturing. The historical Boam Mine, which is 2 kilometres from the Samguen Project, produced the key battery metal from 1945-1963.
Southern Gold has fieldwork underway, including follow-up stream-sediment and rock-chip sampling and geological mapping in a bid to define areas for detailed exploration and drill-target development.
A team is in the field this week with a third party who is assessing interest in the lithium potential of the areas under application.
SAU management is encouraged by the third party’s interest in the lithium potential and believes this provides early validation of the board’s decision to expand the company’s scope beyond primarily looking for potential gold deposits in South Korea.
It comes as South Korea seeks to secure more domestic supplies of critical minerals, particularly in light of its heavy reliance on imports, to feed its battery, electric vehicle and clean technology sectors.
A recently released strategy by the Ministry of Trade, Industry and Energy to secure critical minerals includes lithium among the top 10 strategic minerals and recommends new incentives to encourage exploration and mining by private companies.
SAU management believes that any new domestic lithium discovery would benefit from strong government and industry support given its proximity to battery plants and comprehensive national infrastructure.
This is becoming increasingly important with new plants under construction.
The South Korean Government and its top battery companies plan to jointly invest US$15.1 billion through 2023 to develop advanced battery technologies, including solid-state batteries.
This includes Posco Holdings which is investing US$353 million in a new lithium-hydroxide plant in the southern industrial city of Gwangyang.
Current and planned South Korean lithium processing and battery manufacturing plants.
In 2022, Southern Gold commissioned RSC to undertake a desktop prospectivity study for rare earth and lithium deposits in South Korea to complement its precious metals exploration portfolio.
From this study, SAU lodged exploration applications over two REE projects last month.
RSC also identified several regional lithium targets from anomalies defined in a historical country-wide stream-sediment sample survey by KIGAM.
After further targeting work of high-priority lithium areas, together with preliminary reconnaissance fieldwork conducted by SAU and RSC, SAU has submitted new exploration licence applications over five prospective project areas.
Samguen Project includes five exploration licence applications covering 13.7 square kilometres in the northern region of Gyeongsangbuk-do.
This area contains anomalous lithium from the KIGAM stream sediment sampling survey with the highest value between 121 and 361 ppm.
Ridge-and-spur soil sampling was conducted by Peninsula Mines Ltd in 2017 over ground that now includes the southern part of the Samguen project application area. This was conducted following the return of anomalous stream-sediment sampling in the area by Peninsula.
Values in soil samples up to 410 ppm lithium were returned within the SAU application licence area.
The Seobyeok Project comprises 36 exploration licence applications covering 98.8 square kilometre, in northern Gyeongsangbuk-do.
Stream sediment sampling from the historical KIGAM survey returned high values between 163 and 409 ppm lithium.
Cheongsong Project comprises 34 exploration licence applications that cover 94.4 square kilometres in the southern region of Gyeongsangbuk-do.
Stream-sediment sampling from the KIGAM survey returned values between 121 and 361 ppm.
Yeongdong Project comprises 26 exploration licence applications covering 72.2 square kilometres in the southern region of Chungcheongbuk-do.
The northwest region of the project area returned highest lithium values between 178 and 574 ppm from historical stream-sediment sampling by KIGAM.
Buyeo Project comprises 63 exploration licence applications covering 174.8 square kilometres in the southern region of Chungcheongnam-do.
Elevated lithium concentrations in the KIGAM stream-sediment survey occur in the western part of the application area.
What comes next?
Fieldwork is underway and will comprise regional stream-sediment sampling, rock-chip sampling and geological mapping to focus for subsequent detailed exploration and target development.
First geochemical results from this regional exploration program are planned to be returned in the next few months, depending on progress and lab turnaround times.
Further review and translation of key KIGAM and KETEP reports on the Boam lithium deposit will also continue to assist to guide the wider exploration program.
SAU will also continue to investigate the potential for other styles of lithium deposits in South Korea as part of wider ongoing generative studies, including HARSH (hydrothermally altered rhyolitic sediment-hosted) lithium deposits.
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