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Pan American Lithium Completes First Phase Exploration at Llanta, Chile Aquifer Project

Pan American Lithium Corp. has announced the completion of the Phase 1 exploration program at the Llanta, Chile Aquifer Project. Montgomery & Associates of Tucson, Arizona, experts in hydrology and with substantial experience in the evaluation of lithium and other salts projects in South America, supervised the exploration program at the Llanta Aquifer Project.

Exploration was conducted during October and November 2011 and consisted of a reverse circulation drilling program and transient electromagnetic geophysical surveys. Exploration was conducted in a 16 km-long canyon located between the towns of Diego del Amagro and Llanta, which is part of a larger drainage system and aquifer receiving saturated salt brines from a surface stream, flowing in from the Rio de la Sal surface stream and other brines that have been transported historically and over geologic time from the Pedernales brine salar, which is Chile's second largest. The geophysical program tested the aquifer for brine-bearing capacity, and the well drilling program tested brine quality and host rock parameters, including lithology, aquifer depth and thickness, porosity and permeability, composition and storage capacity of underlying alluvium, preliminary distribution and quality of brines, preliminary estimates of brine yield, and analysis for content of lithium, potassium, and other metals of interest.

Under the supervision of Montgomery & Associates, a total of four boreholes were drilled over a total of 342 meters. Of these five, three boreholes in the main basin encountered brine and the two boreholes in the valley east of the main Llanta basin did not encounter brine. Brine fluid samples were obtained at selected depths during drilling and were submitted for laboratory chemical analyses to Alex Stewart Laboratories in Mendoza, Argentina.

Zonge Ingeneria y Geofisica S.A. of Antofagasta Chile performed a series of four transient electromagnetic ("TEM") surveys, covering 10.2 line-Km focusing mainly on the west end of the Llanta basin. These TEM surveys showed that a low resistivity zone occurs in several parts of the basin, representing a porous aquifer consisting of saturated basin-fill sediments.

Preliminary Results from Field and Laboratory Activities

  • Lithology of the Llanta basin appears to be mostly medium to coarse grained basin fill deposits.
  • Hydrogeologic bedrock at the locations drilled appears to be a welded and poorly permeable volcanic tuff.
  • Depth to water is variable, but seems to be about 50 meters based on both drilling and geophysical surveys.
  • Geophysics suggested that brine may exist at other locations in the valley adjacent to the Llanta basin.
  • The laboratory results (based on 4 samples) were fairly consistent with Li grade averaging close to 140 mg/liter and K grade at 1575 mg/liter.

As the Phase 1 exploration program encountered brines, Montgomery & Associates has recommended a follow-up Phase 2 exploration program, including additional geophysics to better define the eastern valley at Llanta, and the completion, casing and pump testing of 6 small diameter wells. The Company anticipates that this Phase 2 exploration will be scheduled for the first quarter of 2012.

Montgomery also recommended that the Company investigate the possibility of conveying brines pumped from the Company's holdings at the Salar de Pedernales directly to Llanta for processing, using the existing Rio de la Sal watercourse, and initiate a drill program and TEM surveys at Pedernales.  The Company currently has 5,100 hac. of mineral exploration concessions, and rights in over 17,000 hac. of senior water rights applications at the Salar de Pedernales.

Existing Infrastructure at Llanta

The Llanta Aquifer Project has existing infrastructure including: a paved road running through the project; a high voltage power line running through the project, with sub-stations at Llanta and Diego del Amagro; a local trained workforce located 5 minutes from the project; an operating railway running through the project; and a major port located approximately 40 miles distant. At 3,000 feet elevation, Llanta is also 10,000 feet or more lower in elevation than other brine salts targets in the region, and comparable brine salts targets in Argentina, which provides for a year-round operating environment without the difficulties inherent in high altitude operations.


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