Pursuit’s new phased development plan will enable early-stage production, de-risk the production methodology and potentially generate near-term cash flow. Pic: Getty Images
Mining
Special Report: Pursuit Minerals has updated the scaled phased development plan for its Rio Grande Sur lithium project in Argentina with a modular design enabling expansion from 5000tpa to 15,000tpa.
Under Phase 1 of this plan, the existing 250tpa lithium carbonate pilot plant will be relocated to the project site to enable early-stage production that will de-risk the processing methodology and generate potential near-term cash flow.
Phase 2 will see Pursuit Minerals (ASX:PUR) expand production to 5000tpa at Sal Rio 02 to establish a larger-scale lithium supply as the market transitions from surplus to deficit in the coming years.
Output will increase to 15,250tpa under Phase 3 by introducing a 10,000tpa expansion at Mito, further strengthening the company’s position as a scalable lithium producer.
This plan will enable very low capital cost of US$9.7m to relocate the plant and construct evaporation ponds under Phase 1, which enables efficient operational ramp-up and a continuous operation producing Lithium Carbonate at Rio Grande Sur.
It also aligns with Argentina’s Régimen de Incentivos para Grandes Inversiones (RIGI), which the company expects to qualify for based on its multi-stage investment strategy.
This will enable Rio Grande Sur to benefit from significant fiscal and regulatory incentives.
“The Rio Grande Sur Project is advancing rapidly, with a clear pathway to scalable lithium production,” managing director Aaron Revelle said.
“The relocation of our 250tpa lithium carbonate plant marks a pivotal step toward early-stage production, enabling continuous operation while de-risking our processing methodology.
“This strategic approach positions Pursuit for near-term cash flow while laying the foundation for large-scale expansion.
“The company’s modular development strategy, progressing from 5,000tpa at Sal Rio 02 to 15,000tpa at Mito, aligns with the anticipated shift in lithium markets from surplus to deficit, ensuring we bring significant new supply online at a time of growing demand.
“Importantly, our investment plan is structured to qualify for Argentina’s Large Investment Incentive Regime (RIGI), unlocking valuable fiscal and regulatory benefits that enhance project economics.
“With commissioning of the Lithium Carbonate Plant in its final stages and first production targeted for Q1 2025, Pursuit is making meaningful strides toward becoming a lithium carbonate producer.
“We are excited about the next phase of growth and remain committed to delivering long-term value through a cost-efficient, phased development approach that ensures sustainable expansion while maintaining capital discipline.”
PUR’s plant is set to produce technical-grade lithium carbonate in quantities sufficient to meet the needs of potential end users and off-take customers with multiple sample requests already received.
Commissioning activities to optimise the plant’s circuit for processing Rio Grande brines are well advanced and near complete with the company expecting to begin processing synthetic brine in the coming weeks.
This production plan is now being incorporated into the ongoing scoping and feasibility studies to reflect the larger scale commercial development plan for the Rio Grande Sur project, which has a contained indicated and inferred resource of 1.1Mt lithium carbonate equivalent.
Initial feasibility studies incorporating this staged production approach are expected to be released in H1 2025.
PUR could also benefit from tax incentives through participation in RIGI – the Incentive Regime for Large Investments – that was enacted by Argentina’s Congress in July 2024.
This offers significant fiscal benefits to qualifying projects across key mining provinces, including Salta, where the Rio Grande Sur project is located.
Incentives include a reduction in the federal corporate income tax rate from 35% to 25%, elimination of export duties on lithium carbonate sales, and accelerated tax depreciation for plant and equipment.
To qualify for RIGI participation, projects must exceed USD $200 million in total investment and allocate at least 40% of this amount, or USD $80 million, within the first two years following approval. Applications have to be made before July 2026.
The company noted that while early stage investment for Rio Grande Sur is expected to be below the US$200m mark, the full project roadmap – subject to further definition in feasibility studies – is expected to exceed this threshold.
Based on comparable lithium projects in the region, Pursuit intends to submit an application for RIGI participation and is actively aligning its investment strategy to maximise the benefits available under the program.
This article was developed in collaboration with Pursuit Minerals, 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.
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