Dempsey Minerals has set its sights on lithium-rich Argentina, picking up an option to acquire a package of tenements from Blue Sky Lithium.

The landholding is in South America’s “lithium triangle”, which extends through Chile, Argentina and Bolivia and hosts over half the world’s lithium resources.

“This transaction is a potential game changer for our business, providing Dempsey with a landholding in arguably the most productive lithium brine basin in Argentina at a time when the lithium market is experiencing unprecedented significant growth,” non-executive chairman Nathan McMahon told investors.

Lithium brine deposits are found in salars – salt lakes – and play an important role in the world’s supply of lithium. In 2015, subsurface brines yielded about half of the world’s lithium production.

Lithium is among the favoured battery metals, with demand driven by electronics and the electric vehicle uprising that is forecast to reach over 500 million vehicles by 2040 from 2 million currently.

Dempsey (ASX:DMI) can choose to exercise the option by either acquiring the tenements or acquiring Blue Sky via the issue of 17 million shares and 12 million options.

DMI shares over the past year.
DMI shares over the past year.

“Should we proceed with the transaction, our aim will be to fast track these projects to production,” Mr McMahon said.

Dempsey aims to define a resource within the first 18 months and complete a definitive feasibility study within three years.

The company has been contacted for further comment.