Mandrake’s Lithium Sweet Spots Could Face Testing and Access Challenges

Mandrake’s Strategic Breakthrough in Utah

Mandrake Resources Limited (ASX, MAN) has announced a significant advancement in its Utah Lithium Project with the identification of two distinct high-grade lithium brine 'sweet spots' within the Leadville Formation. This discovery emerges from a comprehensive Lithium Brine Flow Modelling Study that integrates historical well data, 3D seismic surveys, and detailed core analyses.

The project, spanning approximately 379 square kilometres in the Paradox Basin, already boasts an inferred lithium resource of 3.3 million tonnes of Lithium Carbonate Equivalent (LCE). The new modelling highlights zones where lithium concentrations are elevated, coinciding with areas of enhanced reservoir permeability and thicker net pay intervals. These geological characteristics suggest these sweet spots could yield higher lithium extraction rates.

Leveraging Historical Wells for Cost Efficiency

One of the compelling aspects of Mandrake’s findings is the overlap of these sweet spots with existing oil and gas wells. The company is actively negotiating access to these wells for re-entry, which could allow for flow and pressure testing as well as brine sampling at a fraction of the cost and time of new drilling. This approach could accelerate the validation of lithium concentrations and reservoir quality, de-risking the project’s next development phases.

Additionally, the study identified promising lithium brine concentrations within the Paradox Formation, with samples showing lithium levels up to 340 mg/L; comparable to some of the world’s most productive lithium brine basins. This expands the potential resource base beyond the Leadville Formation and aligns with global trends of targeting multiple stratigraphic horizons for lithium extraction.

Geological and Regulatory Advantages

The Paradox Basin’s geological setting, characterized by faulted and fractured basement rocks, appears to facilitate lithium enrichment through prolonged brine-basement interactions. Mandrake’s modelling incorporates fault geometries and brine flow directions, providing a robust framework for targeting the highest-grade zones.

Situated in Utah, a pro-mining jurisdiction with supportive regulatory frameworks and access to Tier 1 infrastructure such as power and water, the project benefits from a favourable environment for advancing lithium production. This is particularly relevant given the US government’s strategic focus on domestic critical minerals supply chains.

Next Steps and Market Implications

Mandrake is poised to move quickly into operational phases, with well work-over plans being developed by third-party engineers and negotiations underway for well access. The upcoming flow testing and brine sampling will be critical to confirm the modelled lithium grades and reservoir characteristics.

For investors and market watchers, these developments reinforce Mandrake’s position as a notable player in the US lithium sector, potentially accelerating the timeline to production and enhancing the project’s valuation. However, the success of well re-entries and subsequent testing remain key uncertainties.