Neo Lithium Corp. (TSXV: NLC) reported on Wednesday a significant increase in resources at the high-grade portion of its Tres Quebradas (3Q) lithium brine project in Catamarca province, Argentina.
The updated resource estimate shows that the deposit continues to improve, confirming that it is one of the largest and highest-grade lithium brine deposits in the world, the company said.
The 3Q project is located within an elongated salar 28 km in length that contains a high-grade resource in the northern third of the salar, roughly defined by the 800 mg/l cut off, as well as a medium-grade resource in the southern two thirds of the salar, within the 400 mg/l cut off.
Since the completion of the previous mineral resource estimate in July 2018, the company has continued drilling and has revised the statistical criteria to define measured, indicated and inferred resources.
Using the new drill holes and revised statistical criteria, the measured and indicated mineral resource categories have increased by 125% to at the 800 mg/l lithium cut-off, and by 33% at 400 mg/l lithium cut-off, when compared to the July 2018 estimate. Similar average grades and impurities were observed, Neo Lithium said.
The 3Q project now has M&I resources of 1.68 million tonnes LCE (lithium carbonate equivalent) at an average grade of 926 mg/l lithium in the northern high-grade zone. In the central and southern medium-grade portion, mineral resources have increased to 5.3 million tonnes LCE at an average grade of 636 mg/l lithium.
“These updated results confirm that 3Q project is one of the most significant lithium brine discoveries in recent history,” Neo Lithium CEO Waldo Perez said in the media statement. “We continue to add high-quality resources to the 3Q project, and there is still incremental value and growth at this world-class high-grade resource.”
According to Neo Lithium, the high-grade resource is “strategically important” because it requires smaller evaporation ponds to put the project into production. Since the pond size is geometrically related to grade, increases in grade have a significant impact in decreasing capital costs of pond construction.
Meanwhile, the company continues to work on a feasibility study for the 3Q project. Neo believes the current larger mineral resource estimate is not expected to negatively impact the new reserve estimation and mine plan that will be delivered as part of the study.
Shares of Neo Lithium surged 6% by midday Wednesday following the new resource estimate. The lithium explorer has a market capitalization of approximately C$424.8 million.