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VSA Capital Market Movers - Millennial Lithium, Vedanta Resources

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Millennial Lithium (CVE:ML)

The latest drill hole completed at Pastos Grandes salar has proved the best to date. Reported late yesterday, hole PGMW17-05/5c, drilled in the southern part of the surface salar has been completed to a depth of 601m with a continuous brine bearing interval from 382m to 593m grading 545 mg/L Li. A 33m interval uphole starting at 27.5m also carried brine at 523mg/L Li.

The host sediments in both intervals is poorly consolidated sands and constitutes the deepest confirmation and thickest interval of brine yet encountered in the basin. The magnesium to lithium ratio is improved at 6.0. Potassium values range from 4680 mg/L to 6186 mg/L and average 5847 mg/L. The hole was stopped due to reaching depth capacity of the drill rig.

We view these results as very exciting. The grade of lithium is increasing with depth in the basin, brine bearing thickness is increasing without degradation of apparent porosity and permeability, and the chemistry of the brine is improving for the economics of lithium extraction. With three rigs now working the basin for ML, we expect more good drilling news to come as the company works toward a first compliant resource declaration later this quarter or in October. The size of that lithium resource gets bigger with every drill hole completed.

We retain our SPEC BUY recommendation.

 

Vedanta (LON:VED)

Vedanta (LON:VED) is offering US$1.0b in bonds with maturity in 2024 with a 6.125% coupon in order to re-purchase two different existing bond series that have a shorter duration and a higher coupon rate. The total value of the existing bonds eligible for redemption is US$1.67b with the majority of it being at a coupon rate over 8%.

As separately announced today, after cancelation of those bonds already tendered under the offer, US$252,259,000 of the 2019 bonds and US$670,157,000 of the 2021 bonds will remain outstanding.


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