Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) has started drilling a series of new wells at its flagship lithium operation in Argentina’s Salta province following a 175 per cent expansion of its lithium brine resources at the site.
The Vancouver-based junior announced the development on Thursday and the Phase I program at its 100 per cent owned Hombre Muerto North project will involve drilling three wells and fitting them with screen filters and blind casing.
“Upon completion, long-term pumping tests will be conducted to determine brine transmissivity, including the maximum flow of each well,” said the company in a statement. The results are expected to offer critical information for an upcoming feasibility study on the project.
The first well is being drilled 200 metres below the surface in the site’s Natalia Maria claim block, one of the five blocks involved in the new drilling campaign. The company reported high-grade core samples from that block in April with an average grade of 1,176 milligrams of lithium per litre.
Once Lithium South completes the well at that claim block it will focus on two new wells at the site’s largest block — Alba Sabrina.
Those wells will be drilled to a depth of 200 and 400 metres; the block accounts for 2,089 of the project’s 5,687-hectare land package, which is estimated to contain 975,000 tonnes of lithium carbonate equivalent.
Lithium South is currently evaluating the site’s Viamonte and Norma Edit claim blocks for potential well installation during the drilling campaign as well.
Company C.O.O. and Project Manager, Fernando Villarroel, “We are very pleased with our new updated #lithium resource at the HMN Li Project. The quality of the brine has exceeded our expectations.”
— Lithium South Development Corporation (@LithiumSouth) September 14, 2023
Lithium South aims to transition from exploration to development
The Hombre Muerto North lithium project is located adjacent to a US$4 billion lithium operation run by South Korea’s company POSCO (KRX: 005490) and Allkem Ltd’s (TSX: AKE) Sal de Vida project. Livent Corporation (NYSE: LTHM), which is in the midst of completing a merger with Allkem, was also actively involved with lithium development directly south of the project for more than 25 years.
Lithium South is engaged in a strategic partnership with China’s lithium processing specialist Chemphys Chemical Industry Co. Ltd, which is a major shareholder in the company. The company’s Argentina project has nine mining concessions.
Lithium South’s President, CEO and Founder is Adrian Hobkirk, who started his career in the mining industry in 1989.
“With confirmation of our new 1.58 million tonne lithium resource, Lithium South is now moving from a lithium explorer to a lithium developer,” said Hobkirk.
“We are installing production wells and completing construction of a pilot plant. The information from our efforts will allow the completion of a feasibility study early in 2024, adding value to the Hombre Muerto North lithium project and the company,” he added.
Lithium South is completing the construction of a pilot plant at the site to test lithium evaporation characteristics and has only drilled 75 per cent of the project area on the Salar del Hombre Muerto salt flat.
The company has a market capitalization of $43.2 million, 97 million issued and outstanding shares, no outstanding debt and $4.6 million in cash (as of June 30).
Lithium South shares rose by 2.2 per cent Thursday to $0.46 on the TSX Venture Exchange.
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