The London-based miner Great Southern Copper plc (LSE: GSCU) has entered a binding agreement to acquire a lithium project in Chile’s largest salt flat, one of the world’s top locations for mining the battery metal.
The company announced the acquisition on Tuesday and will be acquiring the Monti lithium project in the Salar de Atacama for a total consideration of US$2.26 million in cash and stock, beginning with an initial payment of US$10,000. Great Southern Copper (GSC) has not specified which “vendor” it is acquiring the project from and providing the funds.
Prior to entering the lithium space in Chile, an opportunity described by the company’s CEO Sam Garrett as “too good to pass up,” the company had already established two early-stage copper projects in the country.
“The Monti lithium project is a natural fit to complement GSC’s two copper projects at San Lorenzo and Especularita,” said Garrett.
The new lithium project spans 235 square kilometres and is comprised of 81 mining concession applications. The Salar de Atacama where it is situated is estimated to contain 6 million tonnes of the element.
#GSCU We have executed a binding Term Sheet for the Monti Lithium Project located in Salar de Atacama, Chile’s top producing lithium region.
— Great Southern Copper (@greatscopper) September 20, 2023
Chile is estimated to have 14.3 million tonnes of lithium
Chile’s President Gabriel Boric announced plans to nationalize the country’s lithium industry in April.
The move aims to eventually transfer control of domestic lithium operations in the country from Sociedad Quimica y Minera de Chile (NYSE: SQM) and Albemarle Corporation (NYSE: ALB), Chile’s two primary producers of the metal, to a state-owned company.
The country has the second-largest lithium reserves in the world. The element is extracted from salt brine solutions beneath the ground in the country’s salt flats as opposed to spodumene-bearing pegmatite rocks in Australia, the world’s number one lithium resource.
The “lithium triangle” in Chile, Bolivia and Argentina is estimated to contain almost 50 million tonnes.
Chile has acknowledged the importance of lithium for the country’s economy and companies intending to extract the commodity in the country are required to enter contracts with the state-owned copper miners Codelco and ENAMI.
The next steps for GSC will be to conduct surface sampling and mapping prior to formulating exploration plans. The land package for Monti is spread throughout the surrounding area of Albemarle and SQM’s operations.