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Argentina Lithium & Energy is looking to tap Argentina's famous 'Lithium Triangle' as the globe turns to electrification

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The increasing push to find greener energy sources and the rapidly growing electric vehicle (EV) market has put battery metals such as lithium firmly in the spotlight.

The price of the silvery-white metal, used in energy storage, lithium-ion batteries, lubricants, ceramics, and glass, has been surging this year after a three year slump, while prices in China – a huge driver for the market – are at record highs.

A recent study by Market Reports World noted that the global lithium market will reach a staggering US$6187.8 million by the end of 2027 (compared to US$3877.7 million in 2020) and grow at a compound annual growth rate (CAGR) of 8.1% in the five years starting from 2022.

No surprise then that a slew of companies are now racing to find, produce, and supply this strategic commodity.

Argentina Lithium & Energy Corp (TSX-V:LIT, OTCQB:PNXLF) appears to be in the right location at the right time, not least since the South American country already produces around half of the globe’s lithium and hosts 60% of known reserves.

It is a Grosso Group company, an organization, which has been pioneering mineral exploration in Argentina for three decades and has been behind four major discoveries, including Navidad (now owned by Pan American Silver) – one of the world’s largest undeveloped silver deposits.

Argentina Lithium & Energy has built a portfolio of four exciting projects, covering nearly 60,000 hectares (Ha), in the Argentinian part of the prolific so-called “Lithium Triangle”.

For the uninitiated, this is a vast, arid region in the Andes, which stretches into Bolivia to the north and Chile to the west. Lithium here is to be found in the large salt pans (or salars) that characterise the area.

Underground lakes

In essence, the salt water (brine) in underground lakes, which contains lithium is bought to the surface and evaporated in huge basins, before being processed further in several stages to a finished product. It is worth noting that with advancements in modern technology, the chemical extraction of lithium has become easier and more economical, even at lower grades than was the case previously.

The company’s projects comprise the 16,000 Ha Pocitos project, the 25,000 Ha Incahuasi project, the 9,000 Ha Antofalla North asset and the 2,370 Ha Rincon west project.

“We think Argentina has tremendous potential for discovery in lithium,” explained CEO Nikolaos Cacos to Proactive in an interview.

“Argentina is so vastly underexplored. It’s been lacking investment. Mining investment in general has only been active in Argentina in the last 30 years, and for lithium, arguably, it’s had only a decade of investment and these (four) projects are all situated in brine salars where, either lithium presence is known, or there are reserves held by other companies.”

The company’s enviable asset portfolio is itself a product of unforeseen events in recent years, noted Cacos.

Price dip

The company was established as a lithium-focused firm in 2016 and had been exploring for the metal until around three years ago, when the price took a dip. So it paused its exploration programs to conserve capital, but then coronavirus (COVID-19) hit.

“With Covid hitting, we saw that as a real opportunity because there were no foreign companies poking around within Argentina looking for projects, but we had a relatively strong presence in that county and we were able to leverage the Grosso group contacts and people and be able to acquire some of these projects that we’re bringing up today,” said Cacos.

And, he added, more potential lithium project acquisitions in Argentina by the company are currently in negotiations, which he hopes will be finalized in the next couple of months. 

The company recently announced a near C$5 million private placing to fund exploration, and a first tranche raising around C$2.7 million has now closed.

Cacos said the first priority will be to carry out a detailed geophysics program to delineate the brines in the new year at the Rincon West asset ahead of a five-hole, 1,500 metre (m) drill program there, earmarked to begin before the end of February.

With this project, Argentina Lithium will be only the third player on this salar, and its land package sits adjacent to tenements held by Rincon Ltd and Argosy Minerals – both of which already have proven resources.

And in the second quarter of next year, Cacos said the company will also aim to carry out geophysics and drilling at its Antofalla North project, which is 20 kilometres (km) west of the country’s largest lithium producing operation at Salar de Hombre Muerto.

Significantly, in this salar, Albemarle, the largest lithium producer in the world, has large holdings to the south and has published ore-grade results, Cacos noted.

With the recent financings, Argentina Lithium has around C$6.5 million in cash, sufficient for the work planned in the first quarter, said Cacos. Depending on the exploration results, he added, the firm could then go back to market for more capital.

So with an exciting portfolio in a prime lithium jurisdiction, good contacts and an experienced team, this lithium company could well be one to watch as the world becomes increasingly more focused on electrification.

Contact the author at [email protected]

Story by ProactiveInvestors


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