MinRes to put lithium mine on ice, to cut 300 jobs
The company will put its Bald Hill lithium mine in Western Australia under care and maintenance starting this week.
Highlights
– New 50 km2 North Basin drill discovery averaging 852 mg/L Li and 10,181 mg/L K
– North Basin includes halite sequences from surface to more than 180 metres deep
– Drill program continues in Central Basin to complete resource upgrade
VANCOUVER, CANADA–(Marketwire – Aug. 31, 2011) – Lithium One Inc. (the “Company”) (TSX VENTURE:LI), is pleased to report the delineation of a new zone (the “North Basin”) containing thick halite sequences hosting high grade lithium and potassium brine at the Sal de Vida Project at Salar del Hombre Muerto, Argentina. The five core holes in this new discovery report grades averaging 852 mg/L lithium and 10,181 mg/L potassium within the first 55 metres from surface, with no cut-offs applied. The 50 km2 North Basin is adjacent to, but geologically separated from, the 170 km2 Central Basin where the Company has previously defined an inferred resource1 of 5.4 million tonnes Lithium Carbonate equivalent and 21 million tonnes potassium chloride equivalent (1,470M m3 at 695 mg/L Li and 7590 mg/L K).
In addition to the five North Basin holes, the Company has completed two additional infill holes in the Central Basin. Grades of lithium and potassium in Hole SVH11_16 are consistent with the averages reported for the existing Central Basin NI 43-101 inferred resource, while the grades in hole SVH11_22 are more than 20% higher in lithium and over 30% higher in potassium. These results will add confidence and contribute to upgrading the Central Basin resource.
Lithium One President and COO Patrick Highsmith commented, “The higher grade results from the North Basin drilling have outlined a significant new discovery on the Sal de Vida Project, confirming our belief in the project’s development and growth potential. The average lithium content in the North Basin is 23% higher than the grade of the Central Basin inferred resource, and the potassium grade is 35% higher. The North Basin salt body is similar to those hosting the resource being produced by FMC to our west from the same salar, and the giant Salar de Atacama lithium operations in Chile. We expect the North Basin to make a significant contribution to the upgraded Sal de Vida resource expected later this year.”
Summary of Drill Results
Table 1 below summarizes data from drill holes SVH11_17 through SVH11_21 from the North Basin, as well as SVH11_16 and SVH11_22 from the Central Basin. (Please see Company website for maps and details at www.lithium1.com)
The North Basin is separated from the Central Basin by a narrow topographic high in the Tertiary basement rocks. Holes SVH11_17 through SVH11_20 in the North Basin encountered brine hosted predominantly in halite, while hole SVH_21 consisted mainly of halite but with significant intercalated clastic sequences. These drill holes indicate that the North Basin is more than 180 metres deep. The holes encountered high-grade brine in sampling down the full extent of the holes, which ranged from 95 to over 280 metres in depth. However, until pumping tests are completed, the Company has elected to treat only the upper 50 to 55 metres of each hole as material. Magnesium and sulphate ratios to lithium in the North Basin holes continue to be favourably low, with averages of 1.82 for Mg:Li and 13.26 for SO4:Li.
| Table 1. Summary of Core Drilling Data, SVH11_16 through SVH11_22 – No Cutoff Grade Applied |
| Hole no | # Sample Inter-vals | Start | End | Total Inter-val | Hole Depth | Li | K | Mg:Li | SO4:Li | |
| (m) | (m) | (m) | (m) | (mg/l) | (mg/l) | |||||
| NORTH BASIN | ||||||||||
| SVH11_17 | 8 | 0 | 52.8 | 52.8 | 137.5 | Mean | 747 | 9700 | 1.82 | 14.38 |
| Max | 810 | 11186 | ||||||||
| Min | 564 | 6387 | ||||||||
| SVH11_18 | 8 | 0 | 52.1 | 52.1 | 248.4 | Mean | 972 | 11581 | 2.11 | 12.02 |
| Max | 1588 | 18133 | ||||||||
| Min | 594 | 9647 | ||||||||
| SVH11_19 | 7 | 0 | 53.8 | 53.8 | 283.8 | Mean | 872 | 9896 | 1.82 | 13.39 |
| Max | 1036 | 10804 | ||||||||
| Min | 818 | 9571 | ||||||||
| SVH11_20 | 7 | 0 | 52.1 | 52.1 | 96.3 | Mean | 875 | 10344 | 1.66 | 13.72 |
| Max | 1042 | 11522 | ||||||||
| Min | 746 | 9340 | ||||||||
| SVH11_21 | 6 | 0 | 53.8 | 53.8 | 95.4 | Mean | 794 | 9382 | 1.69 | 12.80 |
| Max | 895 | 10368 | ||||||||
| Min | 584 | 7379 | ||||||||
| North Basin Core Holes 17-21 Average Chemistry (n=36) | 852 | 10181 | 1.82 | 13.26 | ||||||
| CENTRAL BASIN | ||||||||||
| SVH11_16 | 9 | 76.7 | 171.2 | 94.6 | 171.2 | Mean | 650 | 7609 | 2.57 | 9.65 |
| Max | 786 | 9635 | ||||||||
| Min | 333 | 3752 | ||||||||
| SVH11_22 | 15 | 0 | 102.4 | 102.4 | 102.4 | Mean | 843 | 9987 | 2.43 | 9.99 |
| Max | 1041 | 11382 | ||||||||
| Min | 624 | 7996 | ||||||||
Hole SVH11_16 was drilled near the southeast margin of the Central Basin resource area. The hole encountered clastic sediments, dominated by medium grained sand and silt. The average density of the samples down to approximately 76 metres in this hole was 1.04, indicating the presence of near-surface fresh and brackish water, as opposed to brine. This is common near the margins of salar basins.
The Company continues to collect systematic core samples for determination of effective, or drainable, porosity. The nominal depth interval for porosity measurements is approximately 10m. The average effective porosity to date in the halite of the North Basin is approximately 4%. The mixed aquifers encountered in holes SVH11_16 and SVH11_22 in the Central Basin have average effective porosities of more than 8.0%. The previously reported average effective porosity for the Central Basin resource was 7.9%. As indicated in the Technical Report, the effective porosity in the halite is expected to be lower than the clastic sediments. Secondary processes such as dissolution, fracturing, and formation of caverns also affect the halite. Pumping tests, geophysical logging and other tests will be required to assess the secondary porosity created by these processes.
Sampling and Quality Control
Holes SVH11_16 and SVH11_22 employed depth specific sampling using Lithium One’s triple-tube core equipment as described in the news release dated November 10th, 2010 and the NI 43-101 Technical Report dated April 25, 2011.
The North Basin drill holes encountered brine hosted dominantly in halite (common salt) and the brine occurs in cracks, caverns and pore spaces within the halite. Since halite is a relatively hard rock compared to the sand, silt and volcanic sediments found in most of the Central Basin, the drive point apparatus is not used to collect a sample. Instead, the hydrologists and geologists use a bailing system to remove several liters of brine at the designated sample interval before collecting a sample for analysis. The nominal sample interval in the North Basin drilling is approximately 6 metres.
The liquid samples from Sal de Vida have been analyzed by Alex Stewart Assayers of Mendoza, Argentina by dilution and direct aspiration atomic absorption. Alex Stewart’s Mendoza lab is accredited to ISO 9001:2008 and ISO 14001:2004 for its geochemical and environmental labs for the preparation and analysis of different sample media, including waters and brines.
The porosity determinations were made by Core Laboratories of Houston, Texas. Core Laboratories has demonstrated that its Quality Management System is in compliance with certification to ISO 9000:2008 for providing state of the art petrophysical and geological analysis and interpretation of core samples from rock.
The Company maintains a systematic quality control program including the use of standards, blanks, duplicates, and an independent check laboratory. The performance of the quality control samples associated with these data indicates acceptable analytical quality. Please refer to the NI 43-101 Technical Report, which is filed on SEDAR and available on the Company’s website, for further discussion of sample methodology, detailed quality control procedures and other information regarding the project.
Sal de Vida Development Program Update
The Lithium One team continues to work on multiple aspects of the scoping study and feasibility program. Core drilling, well drilling and pumping tests are underway. The year-long evaporation tests and the pilot scale production of lithium carbonate and potash continue. Considerable progress is also being made in refining the process and improving the purity of the lithium and potash products. The Preliminary Economic Assessment (PEA) is on-track for completion by ARA Worley Parsons before the end of the third quarter.
Review by Qualified Person
The contents of this news release, analytical data, and quality control procedures have been reviewed and approved by Mr. Michael Rosko of Montgomery & Associates Water Resource Consultants (M&A). Mr. Rosko is a Registered Geologist in Arizona, California, and Texas and a qualified person (QP) as defined in NI 43-101. Mr. Rosko and M&A are completely independent of Lithium One, owning no securities of any kind in the Company.
About Lithium One:
Lithium One Inc. is well positioned to be a next-generation low cost producer of lithium and potash. The Company has two major projects funded through feasibility by earn-in partners: the Sal de Vida lithium and potash brine project in Argentina and the James Bay bulk tonnage spodumene project in Quebec. The Sal de Vida project is one of the largest and the highest-grade lithium and potash brine projects in the world, with an NI 43-101 inferred resource(i) of 5.4 M tonnes of Lithium Carbonate equivalent and 21 M tonnes of Potash equivalent (1,470M m3 at 695 mg/L Li and 7590 mg/L K). KORES, LG International and GS Caltex are earning a maximum 30% project equity in Sal de Vida by funding the feasibility study expected in less than twelve months and providing an off-take agreement for up to 50% of the lithium production. Galaxy Resources is earning a maximum 70% project equity in the James Bay Project through an earn-in agreement that includes delivery of a feasibility study by early 2013. The Company’s strategy is to draw upon its quality team and employ best practice to develop its projects into leading suppliers of low-cost, high quality lithium products to the global market.
ON BEHALF OF THE BOARD OF DIRECTORS,
Paul Matysek, Chief Executive Officer
The reader is cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability.
Forward-Looking Statements
This document may contain “forward-looking information” within the meaning of Canadian securities legislation (hereinafter referred to as “forward-looking statements”). All statements, other than statements of historical fact, included herein including, without limitation statements relating to; the completion of a Scoping Study, Preliminary Economic Assessment or Feasibility Study, securing of debt for future project construction, purchase of future mine production, the timing for completion of an NI 43-101 compliant resource and other matters related to the exploration and development of the Project, are forward-looking statements. These forward-looking statements are made as of the date of this document and the Company does not intend, and does not assume any obligation, to update these forward-looking statements. Forward-looking statements relate to future events or future performance and reflect management’s expectations or beliefs regarding future events. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include unsuccessful exploration results, changes in metals prices, changes in the availability of funding for mineral exploration, unanticipated changes in key management personnel and general economic conditions, title disputes as well as those factors detailed from time to time in the Company’s interim and annual financial statements and management’s discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements.
(i) For details please see the NI 43-101 Inferred Resource Estimate Technical Report dated April 25, 2011, filed on SEDAR.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
