Patagonia Lithium prepares new drilling to expand Cilon resource in Argentina

Patagonia Lithium (ASX: PL3) will start drilling the JAM 2025-5 well at its Cilon Project in Argentina to boost lithium resources, while advancing rare earth exploration in Brazil.

Patagonia Lithium (ASX: PL3) is preparing to begin drilling the JAM 2025-5 well later this month at its Cilon Project in Argentina, as the company seeks to increase its lithium resource through new assays and continued high porosity similar to that seen in earlier wells.

According to Executive Chairman Phillip Thomas, geophysical surveys have already shown a low-resistivity zone extending down to 1,000 metres in the planned 600-metre well.

“This well is 300m and 1,000m from our other wells in the southern section of the concessions, enabling us to increase the confidence of the resource,” Thomas explained.

“This will also help satisfy our work commitment on the Cilon concessions. Although we could not drill into the core ‘eye’ of the geophysical target where resistivity is below 0.3 ohm.m, we expect brines to flow during the packer test due to the exceptionally high porosities encountered in other wells.”

As reported by Mining.com.au, well 5 marks the start of an expanded program that will see Patagonia immediately move on to drill an additional well, aimed at upgrading the resource to measured and indicated status—a de-risking milestone essential to the upcoming Scoping Study.

Lithium market trends

The lithium market has shown mixed signals in recent months. Rising demand coupled with temporary production curtailments in China have pushed prices higher through Q3 2025.

According to Trading Economics, lithium traded at ¥73,000 ($15,863) per tonne on October 14, 2025, up 0.76% over the past month but still 2.01% below levels from a year earlier.

Thomas noted that the North American lithium carbonate price index averaged US$9,357 per tonne in Q2 2025, continuing a gradual decline from earlier in the year as battery manufacturers slowed spot market purchases.

“This lithium carbonate spot price reflected subdued and slower downstream electric vehicle rollout, keeping procurement soft despite modest stabilisation in production,” he said.

Rare earth exploration in Brazil

In parallel, Patagonia Lithium has identified 11 rare earth targets for upcoming auger and aircore drilling at its Goiás state concessions in Brazil, located next to the CMOC Niobium Mine.

The company is conducting geological, mineralogical, and geochemical studies to accurately characterise mineral distributions and assess the potential for economic rare earth extraction. These studies are based on ratios between the Araxá carbonatite, silicate rocks, and fenitisation—key geological indicators of rare earth enrichment.

Thomas said Patagonia is “delighted” with initial findings of light and heavy rare earth oxide enrichment, noting that light rare earths tend to concentrate in fenites through metasomatism.

“These new geophysical techniques — visible and near-infrared plus SWIR (short-wave infrared) — will help us better target rare earths,” he added.

With exploration fronts active in both Argentina and Brazil, Patagonia Lithium is positioning itself as a dual-focus explorer of lithium and rare earth elements, key materials in the global energy transition and high-tech manufacturing industries.