Lithium Energy’s Solaroz is in a strong strategic position with the bulk of its resource now in the higher confidence indicated category. Pic: Yanukit Raiva via Getty Images.
Mining
Lithium Energy now has a greater level of confidence in the resources present at its Solaroz lithium brine project after upgrading the bulk of the resource – 2.4Mt LCE – into the indicated category.
Solaroz is in the heart of Argentina’s portion of the ‘Lithium Triangle’ within the Olaroz Salar basin, which also hosts Allkem’s (ASX:AKE) Olaroz joint venture with Toyota Tsusho Corporation and Lithium Argentina’s Olaroz-Cauchari JV with Ganfeng Lithium.
Lithium Energy (ASX:LEL) has already defined a maiden 3.3Mt lithium carbonate equivalent resource, putting it in a strong position to be one of the future producers that will help meet the expected lithium supply crunch.
While Solaroz is at an earlier stage of development compared to its neighbours, recent step-out drilling in the Payo 1 concession highlighted the potential to expand that resource after returning assays of 483mg/l lithium from 233 to 257 metres depth in the upper aquifer.
This same hole is also being deepened to determine if the lower aquifer at this location has higher lithium grades than the upper aquifer as seen in the main part of the Solaroz project.
Additionally, the company is examining two processing options to underpin the next phase of feasibility studies.
These are the traditional, well understood and conventional evaporation process used by its neighbouring producers in the Olaroz Salar and direct lithium extraction.
Lithium Energy has now taken a big step forward by converting 2.4Mt of the 3.3Mt LCE resource into the higher confidence indicated category.
The indicated resource includes a high-grade core of 1.2Mt LCE at an average concentration of 400mg/l lithium and is based on drilling completed to date in the Central Block of concessions at Solaroz, supported by extensive geophysics programs undertaken on the project.
This is massively positive for the company as it not only solidifies the position of Solaroz as a strategic lithium asset next to third-party production assets, but it also provides enough information on geology and grade continuity to support mine planning.
“Following the release of the maiden resource estimate of 3.3 Mt of inferred resource of LCE in June 2023, continued drilling by the company has now successfully resulted in the upgrade of 2.4 Mt of LCE from a JORC inferred to a JORC indicated category,” executive chairman William Johnson said.
“Having the majority of the inferred resource converted to the higher confidence indicated category is a very significant milestone for the company, as these indicated resources will now underpin the Hatch scoping study for Solaroz, the results of which will be released shortly.
“Solaroz is located on the Olaroz Salar (salt-lake) in north-west Argentina, one of the best locations in South America’s ‘Lithium Triangle’ for developing large scale lithium brine operations, as evidenced by our Olaroz neighbours Allkem and Lithium Argentina.
“Allkem has reported production of lithium carbonate from Olaroz since 2015 using traditional brine evaporation, with latest reported cash costs of only US$4,149/tonne LCE and high margins per tonne of LCE.”
Lithium Energy said that further potential for resource expansion will be tested by future drilling.
This includes lithium mineralisation remaining open at depth within the Deep Sand Unit and underlying bedrock sediments, which were not fully tested in a number of holes due to drill rig limitations.
Further potential for resource expansion exists within the Northern Block of concessions (Payo 1 and Payo 2 North), where only one hole has been drilled to date.
Results for the Hatch scoping study, which is underpinned by the upgraded resource, will be released shortly.
This article was developed in collaboration with Lithium Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
