Southern Lithium Corp. is pleased to announce it has acquired a seventy percent (70%) interest in two additional claim blocks in the Pocitos Salar Basin in Salta Province, Argentina with partner Proyecto Pastos Grandes S.A., a wholly owned subsidiary of Millennial Lithium Corp.
The Cruz Property is contiguous with the south end of ADY Resources Limited’s (“ADY”) Salar del Rincon project, which has Probable Reserves of 1.2 million tonnes Lithium Carbonate Equivalent ("LCE") and Measured and Indicated Resources of 3.5 million tonnes Lithium Carbonate Equivalent ("LCE"). ADY project economics consist of ungeared after-tax 9% NPV of $1.36 billion with a payback period of 4.13 years from start of commercial production. Life of mine is approximately 24.5 years with average annual production 50,000 tonnes LCE per annum.
The acquisition costs will be covered under the terms of the formal option agreement dated November 17, 2016 (the “Definitive Agreement”) with Millennial Lithium Corp. Claim one is the Poci 02 and encompasses 3,263 hectares (8,063 acres) and the second claim is the Poci 03 and encompasses 3,264 hectares (8,065 acres).
To earn the additional 10% interest (for an aggregate total 80% interest) in the Property, the Company must, prior to that date which is 6 months after the third anniversary of the Definitive Agreement, complete a bankable feasibility study on the Property.
The transaction remains subject to certain conditions, and includes the final granting of the claims will be subject to approval of Environmental Impact Report (“EIR”). The activities covered in the EIR include geophysics surveys, drilling and future well testing as well as flow rate test programs, and onsite evaporation and processing trials, in addition to infrastructure development as required. This includes roads and drill pads, a camp and facilities for the test evaporation pans and preliminary process testing.
Larry Segerstrom, President of Southern Lithium commented, "Pocitos Salar Basin remains our highest priority lithium target in Argentina. The additional claims essentially triple the property's size and brings us up against ADY’s advanced Rincon project. With a minimal amount of work, we will have excellent targets for drill testing in 2017."
About the Cruz Property
Through our partner Millennial Lithium Corp. (TSX.V:ML) (FSE:A3N2) (OTCQB:MLNLF), the Company has executed a formal option agreement with Proyecto Pastos Grandes S.A. (“PPG SA”), a wholly owned subsidiary of Millennial, for the right to earn up to an eighty percent (80%) interest in the PPG SA’s Cruz Property in the Pocitos Salar Basin in Salta Province, Argentina.
The Cruz Property is located in the heart of South America’s Lithium Triangle (northern Chile, northwestern Argentina and southwest Bolivia). The property encompasses 9,027 hectares (22,306 acres) in the Pocitos Salar Basin in Salta Province, Argentina, and is contiguous with and immediately south of ADY Resources Limited’s lithium brine resource in the Salar del Rincón Basin.
The Cruz Property includes the central portion of the Rincon volcanic center which forms the northern limit of the Pocitos Salar Basin and the southern limit of the Rincon Salar Basin, where ADY Resources Limited is extracting lithium brine. Both properties lie along the structural belt that hosts the important lithium resources of the region, and at the junction of a large north-south fault system and the northwest-southeast megastructure along which lies the Rincon volcano, the possible source of the lithium brine in both salar basins.
The 60-kilometre long Pocitos Salar Basin has previously only been drill tested with a shallow 12-hole program in the 1970s by an Argentinean government agency “Direccion General de Fabricaciones Militares”. To date, this is the only confirmed exploration drilling conducted in the Pocitos Basin. The hole that produced the best results is near the southeast edge of the Cruz property boundary, and averaged 417 parts per million lithium. Although these results are considered historical and have not been verified by the Company's QP, the Company considers these results relevant to the future exploration of the property.