American Salars Lithium Inc. Announces Acquisition of Pocitos 1 Lithium Salar Project in Argentina

Agustín de Vicente / June 23, 2024 | 20:51
American Salars is poised to significantly advance its lithium portfolio with the acquisition of the Pocitos 1 project, positioning the company for growth in the burgeoning lithium market.

American Salars Lithium Inc. has entered into an agreement with Recharge Resources Ltd. (“Recharge” or “the Vendor”) (CSE: RR) to acquire a 100% interest in the Pocitos 1 Lithium Salar Project (“Pocitos 1”), which spans 800 hectares near the town of Pocitos in Salta, Argentina. The details of the transaction are outlined below.

The Pocitos 1 project includes an NI 43-101 Mineral Resource Estimate (“MRE”) prepared in December 2023, reporting an inferred 760,000 tonnes of lithium carbonate equivalent (“LCE”). This estimate covers both the Pocitos 1 block (800 Ha) and the adjacent Pocitos 2 block (532 Ha). The MRE, based on drilling conducted on the Pocitos 1 block, was developed by WSP Australia Pty Ltd. (“WSP”), a firm with extensive experience in global lithium resource projects. The MRE will be updated to reflect the specific lithium resource on Pocitos 1 and additional work on porosity and permeability will enhance the updated estimate.

Nick Horsley, CEO & Director of American Salars, stated, “We are thrilled to add the Pocitos 1 lithium salar project to our Argentina lithium portfolio. We now control both the Candela II lithium salar project, with an inferred LCE of 457,000 tonnes, and the Pocitos 1 project, which, combined with the Pocitos 2 block, hosts 760,000 tonnes LCE. Our technical team looks forward to updating the NI 43-101 mineral resource estimate for our Pocitos 1 concession, which represents approximately 60% of the combined ground used in the current estimate and hosts all the drilling to date.”

NI 43-101 Mineral Resource Estimate Highlights:

  • Highest lithium value tested using packer sampling system was 169ppm at a depth of 363m.
  • The MT geophysics survey discovered a large area to the west with a resistivity of 0.4Ω.m and a depth exceeding 1km.
  • Ekosolve™DLE technology pilot plant test work at the University of Melbourne achieved 94.9% extraction efficiency with brines at an average lithium concentration of 86 ppm, recovering 80.76 ppm.
  • Significant brine flow was recorded in 2018 wells PO1 and PO2, and brine and gas in PO3 drilled in November 2022.
  • The company plans to start a new drill/production well program upon permit issuance by the Salta Mines Department.

Furthermore, the Vendor announced on May 28th, 2024, the completion of its environmental baseline assessment report, a key step toward developing and potentially producing at Pocitos 1. The report, titled “Environmental and Social Baseline Report for the Pocitos 1 and 2 Concessions on the Pocitos Salt Flats,” was developed over four months by E & C Asociados, a specialist environmental consulting group.

The Transaction:

American Salars will acquire a 100% interest in the Pocitos 1 project by issuing 5,000,000 common shares to the Vendor, subject to a 24-month escrow, and assuming an estimated tax liability of up to USD $250,000 and a payable to WSP for the MRE at a cost of AUD $80,000. The Vendor has agreed to a 24-month escrow with releases every six months and a further voluntary escrow, limiting sales to 10,000 shares per day and 50,000 shares per week. The Vendor has also agreed to proxy all votes to the management of American Salars.

At closing, American Salars will issue 2,500,000 bonus warrants to the Vendor, each allowing the purchase of one common share at CAD $0.75 for five years. The warrants are exercisable only upon Pocitos 1 achieving a combined measured, indicated, and inferred (M+I+I) resource of 1,000,000 tonnes LCE, confirmed by a technical report per NI 43-101 definitions.

The Pocitos 1 property is subject to a 2.5% net smelter royalty (“NSR”), with American Salars having the option to purchase 1.5% (60%) of the NSR for CAD $1,500,000. The transaction includes a finder’s fee.

About the Pocitos 1 Lithium Salar Project:

Pocitos 1 is located approximately 10km from the town of Pocitos, offering access to gas, electricity, and accommodation. The project covers about 800 hectares (1,977 acres) and is accessible by road. Since 2017, over USD $2.0 million has been invested in exploration activities, including surface sampling, trenching, geophysics, and drilling, resulting in excellent brine flow rates. Locations for immediate follow-up drilling have been identified for upcoming exploration.

Lithium values of 169 ppm were recorded from drill hole PCT22-03 during the December 2022 drill campaign, using a double packer sampling system in HQ Diamond drill holes to a depth of 409 meters, with brine flow observed for more than five hours. All holes exhibited exceptional brine flow rates. The NI 43-101 report confirms the potential of the Pocitos 1 project.

Ekosolve Ltd, a DLE technology company, produced 99.8% purity lithium carbonate with an extraction rate above 94%, meaning 158.86 ppm of lithium would be recovered from 169 ppm. WSP Australia has completed an updated NI 43-101 report initially prepared by Phillip Thomas QP in June 2023, estimating an inferred 760,000 tonnes of LCE for the combined Pocitos 1 and 2 blocks.

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