Ore Resources (ASX: OR3) has further reinforced the significant underlying lithium prospectivity of its Kangaroo Hills project in Western Australia, with results from its diamond drilling program showing that all five targeted holes drilled to date have intersected shallow, thick, high-grade lithium mineralisation.

Kangaroo Hills forms part of the company's broader Coolgardie lithium projects, located in the Goldfields region of WA — a historic mining district centred on Coolgardie and Kalgoorlie that also hosts hard-rock lithium operations. Mineralisation at Big Red sits within a pegmatite system, the igneous rock type behind nearly all hard-rock lithium production, which is typically processed into spodumene concentrate.

Managing director and CEO Nick Rathjen said the results further add to studies into the delivery of direct shipping ore (DSO) and early cashflow. Under a DSO model, ore is mined and sold with minimal processing — an approach that generally requires less upfront capital than building a conventional concentrator and can support earlier cash generation.

"Our diamond drilling program at Kangaroo Hills has delivered strong outcomes across two fronts," Mr Rathjen said.

"In addition to providing the representative core samples necessary for planned further metallurgical, ore sorting and geotechnical studies at Kangaroo Hills, the program has also returned significant lithium mineralisation in all targeted drill holes, further demonstrating the continuity of grade and thickness of the Big Red pegmatite system, highlighted by the intercept of 27m at 1.33% lithium oxides from a near surface depth of 4.0m.

"Importantly, our recent assessment of potential iron oxide contamination during laboratory sample preparation has also confirmed the low intrinsic iron content of the mineralisation at Big Red. This delivers further confidence in the quality of the deposit and a further positive indication of its suitability for downstream processing."

Iron is treated as an impurity in lithium concentrate specifications, which typically cap its content, so low intrinsic levels bear directly on the marketability of a future product.

Mr Rathjen said Ore's geological understanding of Kangaroo Hills continues to strengthen, with the company advancing a technical study aimed at optimising project economics and enhancing product quality.

The core samples collected during the diamond drilling program will support ore sorting assessments and additional metallurgical testwork, which are expected to further refine a development strategy for the project.

"We remain on track to deliver a DSO study in the coming weeks. This study is set to deliver the technical and economic assessment of a potential DSO operation at Kangaroo Hills, in conjunction with declaration of an initial MRE for Kangaroo Hills.

"Together, these milestones will provide an important foundation for evaluating the project's development potential and supporting future value creation as Kangaroo Hills advances to the next stage of development."

An MRE is a formal estimate of a deposit's tonnage and grade, reported under the JORC Code that governs how ASX-listed companies disclose mineral assets, and typically forms the basis for subsequent development studies.

Prior to markets opening, OR3 shares were steady at 6.4¢, with a market capitalisation of $52.95 million.