Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) has successfully installed the first production well at its flagship Argentina lithium brine project’s largest claim block.
The junior miner announced Mar. 14 that the well had now been drilled to a depth of 400 metres. Lithium South says it has piped the well and graveled it in prior to completing a series of long-term pumping tests.
For the endeavour, the company received assistance from Zelandez, a local lithium brine technology specialist. Zelandez completed advanced down-the-hole geophysics, a profile of the well and other intricate comprehensive test work.
The Salta-based tech company measured conductivity, nuclear magnetic resonance of sediment rock/fluid and radioactivity along with well fluid temperature. Furthermore, Zelandez completed calibre and ultrasonic wave measurements.
Lithium South says this assessment provides valuable insight into the hole’s potential. It found that the well had average porosity of 21 per cent and yield of 7 per cent. Porosity refers to the amount of void space within rock and sediment allowing brine to flow and accumulate.
Based on these findings, Lithium South’s technical team plans to install a high-capacity pump. The pump is capable of extracting brine at a volume of 40 to 50 litres per second. The new hole is expected to be an immense contributor to the ongoing production at Hombre Muerto North. A technical review is currently under way to determine locations for additional wells at the Alba Sabrina claim block.
“The geophysical profile conducted by Zelandez confirms the exceptional qualities of this hole location,” chief executive Adrian Hobkirk said. “Once the high-capacity pump test is complete, the company is poised to capitalize on the potential of this claim block.”
Read more: Lithium South preliminary economic assessment shows optimism for lithium’s future
Read more: Lithium South near completion of production well and economic assessment at flagship operation
Recent economic assessment yields favourable results
A preliminary economic assessment completed by Vancouver’s JDS Energy & Mining and Knight Piésold Consulting this month found that the Hombre Muerto North project is worth US$934 million.
It showed that the operation will have an impressive internal rate of return of 31.6 per cent, thereby confirming profitability and the feasibility of continued development.
“The PEA results highlight attractive economics associated with the project, including a short payback and exceptional internal rate of return,” Hobkirk said.
“We look forward to taking the project to the next stage of development as quickly as possible.”
Going forward, Lithium South will benefit from a partnership initiated with the major lithium producer Pohang Iron and Steel Company (POSCO) (KRX: 005490) in January. They will collectively develop the Norma Edith and Viamonte claim blocks at Hombre Muerto North and evenly split the lithium produced.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
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