Lithium Energy is up and running in Argentina with a key environmental approval signalling the start of on-ground exploration at its flagship Solaroz project.

Located in Argentina’s vaunted Lithium Triangle, Solaroz is one of the hottest exploration zip codes in the world.

Nestled between Allkem’s (ASX:AKE) world class Olaroz project and Lithium Americas’ Cauchari, work is now afoot to prove up Lithium Energy’s (ASX:LEL) big exploration target of 1.5-8.7Mt of lithium carbonate equivalent at a concentration of 500 mg/L Lithium and 700 mg/L Li.

It’s the EIA you need

Work will start on the Payo tenement 7km from the Olaroz plant, the first of eight tenements to receive EIA approval from Argentine authorities.

The other seven are expected over the course of the March quarter, which would provide LEL access to 12,000 hectares of salt lake prospective for hosting lithium-rich brines.

“The receipt of the first of the Government approvals to start exploration at Solaroz is an important milestone for Lithium Energy,” executive chairman William Johnson said.

“This is a positive endorsement by the Argentinian Government Authorities of the Solaroz Lithium Project and I look forward to mobilising to site and commencing work shortly on this highly prospective project.”

The best street in the world

As demand for lithium skyrockets, Argentina’s North West has become one of the world’s most sought after mineral exploration destinations.

Rio Tinto paid well over a billion Australian for just a foothold in the region when it purchased the development stage Rincon project.

It is reflective of issues companies have had approving and developing lithium projects of scale elsewhere.

Argentina on the other hand has proven itself a stable and reliable investment jurisdiction with great geological characteristics.

“There is no better address to be exploring for lithium than the prolific Lithium Triangle where a number of world class lithium brine projects have been discovered,” Johnson said.

“Our land position could not be better located being either directly adjacent to or principally surrounded by lithium majors ASX/TSXlisted Allkem Limited (formerly Orocobre) and NYSE/TSX-listed Lithium Americas Corporation.

“There has been significant M&A activity in the area showing the global interest in the district and lithium brines in particular, and we are incredibly excited to kick of our exploration efforts at Soloroz.”

If you need any reminding about the interest in brine lithium from battery makers check-out Allkem’s latest quarterly report.

Its Olaroz operation sold its 65% lithium carbonate chemicals at US$12,491/tonne FOB, generating a cash margin of 65% or over US$8000/t.

That margin will get wider as the market remains tightly supplied with EV sales doubling last year around the world. Olaroz lithium carbonate prices for H2 FY22 are expected to be approximately US$20,000/t FOB, 80% higher than the first half.

Next Steps

Lithium Energy plans to commence an exploration program over the Payo tenement after the submission of a baseline environmental monitoring plan.

First up will be mapping and geophysics over the Payo tenement, to contribute to the company’s understanding of the underlying hydro-geological and geochemical characteristics of the brine rich aquifer that comprises the Olaroz Salar underneath the Solaroz tenements.

Importantly the approval confirms the support of the Jujuy government, ahead of the EIA approvals for the rest of LEL’s tenements.

Community engagement is ongoing.

Lithium Energy has already engaged with local geophysics and drilling contractors to prepare for the commencement of exploration works.

Drilling will be a key step to prove up its exploration target, in the hope of fast-tracking the production of lithium carbonate if that work is successful.




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.