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Li Chile releases Arizaro NI 43-101 resource estimate

2022-02-08 09:57 ET - News Release

Mr. Steve Cochrane reports


Lithium Chile Inc. has released an initial lithium resource statement for its first test well in the Arizaro de Salar project. The National Instrument 43-101 resource statement, detailed in an associated table, includes 1.42 million tonnes of lithium carbonate (Li2CO3) equivalent in the indicated and inferred resource categories.

Steve Cochrane, president and chief executive officer of Lithium Chile, commented on the maiden resource for the Arizaro de Salar project: "We are very excited to see a strong NI 43-101 resource estimate from our hydrogeological consultants. The company has adopted an aggressive plan, which includes a follow-up phase 2 drilling program consisting of three 500-metre-deep exploration holes aimed at expanding the lithium resource and improving the grade on the Arizaro property."

Highlights from the test well:

  • 1.42 million-tonne NI 43-101 compliant lithium carbonate equivalent resource;
  • Grades as high as 555 milligrams per litre, higher than average in the salar;
  • 21.94 litres per second average pumping rate, higher than average in the salar;
  • Resource estimate from only 29 per cent of the main concession block, leaving abundant area for resource expansion;
  • NI 43-101 report recommends a second program of $2-million (U.S.) and three holes aimed at:
    • Establishing a measured resource;
    • Significantly increase the lithium carbonate equivalent resource.

Summary of the Salar de Arizaro project:

  • The project is located in the Arizaro salar, located in the Salta province of northwest Argentina -- about 170 kilometres from Salta. Salta is considered the best investment district in the Lithium Triangle according to the Fraser Institute.
  • Lithium Chile controls 23,300 hectares of legal concessions, located mainly in the central part of the salar, which is strategically located close to the best water supply area.
  • Arizaro is the largest salar in Argentina and one of the most important in all of Puna region -- becoming an important new mining area because of the success of recent lithium projects.
  • The railway between Salta and the Antofagasta port passes over the Arizaro salar very close to Lithium Chile's concessions.
  • An initial resource estimate just in a limited portion of concessions totalled 1.42 million tonnes of lithium carbonate equivalent consisting of 895,000 tonnes of indicated resources, together with 535,000 tonnes of inferred lithium carbonate equivalent. The resource report suggests that resources in the measured category will be established by additional drilling, which will also increase the indicated and inferred volumes appreciably.
  • Pump testing included step-discharge and constant discharge tests, which achieved an average pumping rate of 21.94 litres per second and transmissivity of 100 metres per day, which are considered very good in comparison with other salars in the region.
  • Several brine samples were collected from the initial test well, known as Argento-1. During the drilling of the well, during testing of the overall aquifer and subsequently over specific intervals in the reservoir using a HydraSleeve and inflatable packers, permitted Lithium Chile to obtain depth-specific samples.
  • HydraSleeve samples yielded values up to 446 milligram per litre of lithium. Using the inflatable packer system, lithium samples returned values up to 555 milligrams per litre.
  • Based on potential dilutions and grade shown during pump testing, an average of 298 milligrams per litre of lithium was used in resource calculation.
  • Lithium Chile plans on a follow-up phase 2 program of three 500-metre-deep exploration holes aimed at expanding the lithium resource on the Arizaro property. The program is budgeted at $2-million (U.S.) and is scheduled to commence immediately.
  • Lithium Chile is conducting operations through its Argentine subsidiary, Argentum Lithium. Argentum Lithium has fostered a good relationship with local communities within the region through its shared value philosophy. It has strong relationships with Tolar Grande, the closest town which is the last inhabited point in the province on the frontier with Chile.


The Project is located in the Arizaro "salar" in the Salta province, in northwest Argentina, about 170 kilometres (km) from Salta, and approximately 38 kilometres (km) southwest of the town of Tolar Grande. The Project is in the Argentinean Puna, at an elevation of approximately 3,475 metres above mean sea level (amsl).

The Arizaro Project currently consists of seven Exploration and Exploitation Concessions (minas) and Exploration Permits (cateos) totaling 23,300 hectares.

Main infrastructure in the zone consist in an electrical power line (375 kilovolts (KV)), a natural gas pipeline (Gasoducto de la Puna) between Salta (Argentina) and Mejillones (Chile) and a railway between Antofagasta (Chile) and Salta (Argentina).

Salars near the Project area includes: Hombre Muerto, Antofalla, Ratones, Pocitos, Centenario, and Diablillos and Atacama. The Arizaro Salar occupies one of these endorheic (internally drained) basins.

Salar de Arizaro is a mature salar, and the largest salars in the Argentinean altiplano. A thick halite core exists in the basin. Basin margins are interpreted to be fault controlled.

Drilling activities for exploration well Argento-1 started on September 5, 2021, reaching a depth of 470 metres below land surface (bls) on November 28, 2021. Pumping tests were conducted at exploration well Argento-1 in December 2021, and included step-discharge and constant discharge tests.

The ranges of the specific yield values obtained from the BMR survey are reasonable and consistent with values for similar units defined in other altiplanic salars for different projects.

Samples were taken both during drilling, during the pumping test, and after well construction. Pumped samples obtained at variable depths during drilling using a downhole sampling pump,

  • Brine samples obtained during and at the end of the pumping test in exploration well Argento-1,
  • Hydrasleeve samples obtained at specific depths after the well was cased, and
  • Packer samples obtained after the wells was cased.

Although freshwater studies have yet to be conducted, Lithium Chile has a concession (ChasCha Sur) on the edge of the basin in the southeast part of the salar that is adjacent to a known area of fresh water. Based on the initial results of exploration to date, additional exploration activities are justified to better characterize the extent of the observed brine aquifer especially the clastic unit underlying the massive halite. Additional drilling and testing will allow for expansion of the estimated lithium resource and will support estimation of a reserve in the future.

Pumping tests included step-discharge and constant discharge tests. Pumping test equipment was provided by drilling and testing contractor Andina Perforaciones, a local drilling contractor based in Salta, Argentina.

Specific capacity of a well is computed by dividing the average pumping rate by the maximum water level drawdown at that rate and is expressed as liters per second per metre of drawdown (L/s/m).

Calculated transmissivities for both the drawdown and recovery periods agree.

A summary of computed aquifer parametres is given in Table 2 -4 showing pumping rates world class for salars in region

According to a more detailed evaluation of specific yield ranges five Zones are being defined by M&A, as well as slightly changing the depths for the unit breaks.

These following specific yield values were computed for the new units as defined by M&A solely based on the BMR results.

  • Zone 1 (Land surface to 12m) Sy values ranges from 15-23 per cent; average 18 per cent
  • Zone 2 (12m to 320m) Sy values ranges from 3-7 per cent; average 3 per cent
  • Zone 3 (320m to 380m) Sy values ranges from 6-12 per cent; average 6 per cent
  • Zone 4 (380m to 400m) Sy values ranges from 15-22 per cent; average 18 per cent
  • Zone 5 (400m to 443m) Sy values ranges from 7-13 per cent; average 9 per cent

Based on the results, the lower clastic unit below a depth of 304 metres is the most favorable unit for production pumping.

Lithium Chile has collected and received laboratory results for composite brine samples collected from well Argento-1 obtained during the drilling of the well, during aquifer testing, after testing using a sampling pump, and using Hydrasleeve depth-specific samples and inflatable packers obtained after the construction and testing of the well was complete.

Our assessment of the chemistry results obtained during drilling is that the samples may have been diluted by lithium-poor brine from the upper part of the borehole. The values obtained at 300 metres may also have been diluted, but are at least consistent, suggesting a better, or consistent, sampling methodology at that depth.

Table 2 -6 is a summary table for the laboratory results from four brine samples obtained during pumping test operations.

During January 6 and 7, 2022, depth-specific brine samples were obtained by Andina Drilling personnel using Hydrasleeve HS-2 disposable samplers. Samples were taken from top to bottom to avoid mixing of the brine within the well; this was done to obtain representative brine samples for each selected depth. The results of the sampling program are summarized in Table 2 -7. Sometimes multiple samples were obtained at the same depth. Results for the analyses for the two split samples agreed very well with each other for all analyzed constituents.

During January 15 to 20, 2022, brine samples were obtained by Andina Drilling personnel using an inflatable packer system. Samples were taken from top to bottom. Because there was no packer seal due to the fact that the samples were obtained in a screened well brine from outside the packer could flow into the sampling area.

Analytical quality was monitored through the use of duplicate samples. All percentage differences between the original and the duplicate are low and considered within an acceptable range.

All samples were labeled with permanent marker, sealed with tape and stored at a secure site, both in the field, and in Salta, Argentina. Remaining sample brine and duplicates samples obtained during drilling and testing are currently being stored in the Alex Stewart NOA laboratory in Jujuy.

The field sampling of brines from the pumping tests was done in accordance with generally accepted industry standards. The brine sampling program included Quality Assurance and Quality Control (QA/QC) standard elements such as including duplicate samples. Formal traffic reports and chain of custody documents were prepared for every sample obtained and submitted for laboratory analysis. In the opinion of the QP, sample preparation, security, and analytical procedures were acceptable and results from the laboratory analyses are considered adequate.

The average drainable porosity values assigned to each hydrogeologic unit used to estimate the lithium resource are given in Table 3-8.

Table 3-9 summarizes the current Salar de Arizaro resource estimate for lithium. These estimates were calculated by multiplying (the area) by (the unit thickness) by (the drainable porosity for that unit) by (the average lithium grade). Subsequently, the resulting value was summed for each hydrogeologic unit for each polygon, for each assigned resource category. A preliminary, non-economic lithium cut-off grade was assigned as 200 mg/L.

The reader is cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability.

No Severe or Critical impacts were predicted for the Project; only Moderate and Irrelevant impacts were predicted. Therefore, the conclusion of the EIS is that the Project can be considered acceptable with the surrounding environment. The EMP is compliant with the Law of Environmental Protection for the Mining Activity (Law 24.585) and complementary regulations.

The closest population is in Tolar Grande. It is located about 32 km northeast of the Project and can be reached by dirt road. Tolar Grande is the last inhabited point in the province on the frontier with Chile and its population, and for the most part belongs to the indigenous Kolla community. The data of the population of Tolar Grande provided by the 2010 Census for the Municipality of Tolar Grande reflect 236 inhabitants, 117 of whom are men and 119 women, distributed in 54 homes and 92 households.

0.1 Authorship and Terms of Reference

Mr. Michael Rosko, through Montgomery & Associates (M&A), is responsible for compiling, editing, and verifying the Report for regulatory compliance and assumes responsibility for all sections of the report.

Mr. Rosko is a Registered member of Society for Mining, Metallurgy, and Exploration (SME), and has many years of experience designing and evaluating lithium brine projects and is an independent Qualified Person (QP) as defined by NI 43-101 guidelines. Mr. Rosko has reviewed and approved the scientific and technical disclosure contained in this news release.

Mr. Rosko and associated staff of M&A prepared the Report using the format NI 43-101 Technical Report Standards of Disclosure for Mineral Projects (OSC, 2011) including Form 43-101F1 Technical Report and Companion Policy 43-101CP. In addition, Mr. Rosko followed CIM guidelines and definitions as indicated in CIM (2003, 2010, 2012, and 2019).

Mr. Rosko has been to the Salar de Arizaro multiple times in the past, but not during drilling of exploration well Argento-1. Because of travel restrictions due to the Covid global pandemic, visiting the site during the ongoing exploration program has not been possible. However, Montgomery & Associates employees in Argentina were able to visit the site on November 10, 2021 and confirm exploration activities. Drill cuttings were reviewed by M&A geologists in Salta.

Mr. Rosko has managed projects in The United States, Bolivia, Chile, Colombia, Argentina, Peru, and Mexico and serves as General Manager for M&A's Santiago de Chile office. During his 35-year career at M&A, he has developed new water supplies and assessed aquifer conditions for mining operations in arid environments, both in the southwestern U.S. and in the desert "salar" regions of South America. Mr. Rosko's responsibilities have included designing wells and wellfields, characterizing regional hydrogeologic systems, analyzing groundwater chemistry, designing and implementing monitoring programs, and integrating satellite image analysis into water supply. Mr. Rosko has been characterizing lithium brines in salar-type environments in Argentina and Chile since year 2009.

About Lithium Chile

Lithium Chile is advancing a lithium property portfolio consisting of 69,200 hectares covering sections of 10 salars and two laguna complexes in Chile and 23,300 hectares in Argentina.

Lithium Chile also owns 5 properties, totaling 20,429 hectares, that are prospective for gold, silver and copper. Exploration efforts are continuing on Lithium Chile's Carmona gold/silver/copper property which lies in the heart of the Chilean mega porphyry gold/ silver/copper belt.

Lithium Chile's common shares are listed on the TSX-V under the symbol LITH and on the OTCBB under the symbol LTMCF.

We seek Safe Harbor.

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