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Lithium Chile (TSXV: LITH) said on Monday that its Argentine subsidiary Argentum Lithium has been awarded the largest concession block in the Salar de Arizaro.
Argentum was one of 13 companies that competed in a public tender process by the Salta provincial government that encompassed five different blocks. Block IV was the largest of the five blocks.
It covers an 84.5-sq.-km concession located north of Lithium Chile’s project in the Arizaro basin, about 18 km north of drill hole ARDDH-02 that the company had already completed.
The Salar de Arizaro project covers more than 200 sq. km. of the basin, containing an estimated 1.5 million indicated tonnes of lithium carbonate equivalent and 1.8 million inferred tonnes.
“Being awarded Block IV is a wonderful achievement for us. It has the potential to significantly increase our lithium resource without the added expense,” Lithium Chile CEO Steve Cochrane said in a news release.
“We have the equipment, capable team and infrastructure already in place, which positions us to swiftly advance the project. Adding an additional 8,400 hectares to our already substantial land position makes Lithium Chile a dominant player in the basin,” Cochrane said.
Argentum’s bid win marks it as yet another explorer pursuing the battery metal in South America’s Lithium Triangle, as companies continue seeking to develop lithium to meet demand for green technology manufacturing materials.
However, the rising supply of lithium is a contributing factor to the metal’s declining prices, which could drop to $2,200 per tonne next year down from an average of $3,840 per tonne last year, according to a recent report from Australia’s Department of Industry, Science and Resources.
In accordance with the commitment made in its successful bid, Lithium Chile has provided an initial payment of around $5.74 million to REMSa, the provincial mining and energy company, for the award.
An environmental impact study will be filed for an exploration program to be completed on Block IV during the year. The company’s established infrastructure near Block IV will allow for optimized resource utilization and seamless integration of exploration activities, it said.
According to Lithium Chile, there is already extensive geological data available on Block IV from an exploration program completed by Portofino Resources (TSXV: POR) during 2023. That exploration activity included more than 40 surface samples brine samples and 69,000 metres of geophysical surveys.
Capitalizing on the extensive work during the exploration program carried out on Block IV, the company has signed a partnership agreement with Portofino outlining a joint venture arrangement.
The agreement would enable Portofino to acquire a 50% net equity interest in Block IV by contributing 50% of award expenses and exploration costs. Completion of the joint venture is contingent on Portofino raising the necessary funds and entering into a definitive agreement – anticipated to be completed in the next 60 days, Lithium Chile said.
“Combined with Lithium Chile’s exploration success and infrastructure located immediately south, the partnership can move forward quickly. This is a win-win for both companies,” Portofino said in a separate release.
Shares of Lithium Chile rose by 6.0% as of noon ET on the Block IV award announcement. The Calgary-based lithium explorer has a market capitalization of C$109.4 million ($81.9 million).
