Exclusive: Significant new lithium discovery in Argentina
A large and high-grade lithium brine lake and associated salar with low contaminants has recently been discovered in Argentina, Neo Lithium CEO Waldo Perez says in an interview.
Perez described exploration as early-stage but promising given initial sampling in a brine lake and associated salars showing an average grade of 896 mg/L lithium (1,390 mg/L was the best sample taken) and, critically, a low magnesium and sulfate to lithium ratio (around or under one). That is: very high-grade lithium, comparable to higher-grade operations in South America, and low levels of perilous contaminants that can — at higher levels — bung up project economics.
Preliminary testing also shows high potassium grades, comparable to producing potash operations.
The asset is owned by Neo Lithium, a private Ontario company co-founded by Perez, which is set to list by combining with a TSX Venture capital pool company, POCML 3 (PWR-V). They also plan to raise $4.2 million @ $0.35 in a concurrent financing led by PowerOne Capital Markets.
Perez, who has worked for companies such as Barrick and was co-founder, President and CEO of Lithium Americas, is to lead the lithium upstart focused on the Argentinian asset in Catamarca province. Lithium Americas was valued at $80 million when it merged with Western Lithium last year. As well, Toronto-based entrepreneur Constantine Karayannopoulos, who was the founder of Neo Materials — sold to Molycorp for $1.3 billion — and remains Molycorp’s Chairman, will be Chairman of Neo Lithium. Hence the naming of the company. Other notables are Gabriel Pindar, who will sit on the board and was a founder of Neo Lithium, and Pat DiCapo, who heads up PowerOne Capital, which is driving the financing. PowerOne was the original Lithium Americas backer as well.
The brine lake and associated salar to the south is about 100 kilometres east of Copiaqo, Chile and had been overlooked as a potential source of lithium until sampling showed high grades late last year, Perez said.
Perez acknowledges much more exploration is needed on the roughly 160 square km project.
"So we need to quote this understanding (that) we have only collected 50 samples."
But he sounds optimistic about the prospects of the project given the potential for it to show significant size, with high grades and low contaminants.
Indeed, it can be argued grade will improve. As Perez lays it out, initial sampling of the 22-sq.-km lithium brine lake may under-report lithium grades, as the samples were taken at surface where fresh water may dilute them.
"The density of fresh water is less than brine," Perez points out. He continues, "Small amounts of fresh water float like oil in vinegar on top of the lake and the top of the salar." He means that at surface, grades of brines may be lower than brines beneath.
Whether this is the case will come down to more exploration.
Perez says a crew is now in the field taking samples deeper in the lake.
Perez also has his eye on the salar that is to the south of the brine lake. He contends it may hold grades higher than the lake. The lake is a diluted surface expression of potential (yet so far unproven) lithium brines underground.
In the coming weeks Neo Lithium will do a NI 43-101 report as part the qualifying transaction that will give an overview of the project. Then, in the coming months, the company will delineate a resource of the brine lake, which will be relatively inexpensive to do. Ultimately, it may be the associated salar that holds greater promise, but exploration of it will take more time and money to assess than the lake.
"But the salar is where theoretically you should have higher grades and longer-term production," Perez says.
In terms of jurisdiction Perez notes that Catamarca Province is familiar with lithium production. The Salar de Hombre Muerto is in the province, which FMC mines for lithium brines.
Post transaction and financing, Neo Lithium is expected to have about 46 million shares outstanding.
The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. The information contained in the reports have been compiled from sources CEO.CA believes are reliable; however, CEO.CAmakes no guarantee, representation or warranty, expressed or implied, as to such information’s accuracy or completeness. The views expressed are those of the author and not necessarily CEO.CA or Pacific Website Company Inc., CEO.CA’s parent. All opinions and estimates contained in the reports are based on assumptions the author believes to be reasonable as of the dates of the reports but are subject to change without notice. Either the author, Pacific Website Company Inc. or its consultants may from time to time hold or transact in the securities mentioned.