The future is bright for Argentina Lithium and Energy Corp. with promising results and significant progress at projects such as the Rincon salar which is largely controlled by Rio Tinto.
One way to find good value in an ongoing bull market – like lithium, and like lithium in Argentina – is to follow the juniors that are operating alongside the majors.
These juniors, their drill results, and resources are far more visible to the major, to other majors, and to the investing public. Their potential lithium resources and production may get a premium value for no other reason than their location.
Starting at the top
The largest mining company exploring for lithium in Argentina is Rio Tinto PLC (RIO.L, RIO.NYSE www.riotinto.com), the world’s second-largest mining company as measured by market capitalisation. Rio Tinto controls assets of approx. $100 billion and held cash and cash equivalents of approx. $9.2 billion on June 30 this year according to their most recent financials.
Rio Tinto controls most of the Rincon salar in Salta province in far north-west Argentina, while three juniors also hold positions and are operating in the Rincon salar. It is an exciting basin to follow because both Rio Tinto and one of the juniors – Argosy Minerals Ltd. – are expected to initiate production in the near-term.
Rio Tinto has big plans at the Rincon salar
Rio Tinto acquired most of the Rincon salar in March 2021 from Rincon Mining for $825m. The company has been very active at the salar since making the acquisition.
According to miningweekly.com, Rio Tinto has constructed and is operating a pilot plant on site. It is aggressively drilling to expand the resource and has started construction of a 3,000 tonne/year starter plant to produce lithium carbonate commencing in 2024. Its plan is to have the starter plant serve as a pilot for a much larger, 50,000 tonne/year plant there.
Rio Tinto also announced in July 2022 that it has signed a Memorandum of Understanding with Ford Motor Company for delivery of lithium carbonate from the Rincon salar. Additional information is available at riotinto.com/en/operations/projects/rincon.
Near-term producer: Argosy Minerals
Argosy Minerals Limited (ASX:AGY, www.argosyminerals.com.au) is an Australian public junior that controls concessions in the southeast area of the salar. On 4 September 2023, the company announced it produced ten tonnes of battery-grade lithium carbonate in August on-site at the Rincon salar. The company initiated continuous operations on a trial basis as of the end of June.
The company has completed a second round of exploration drilling, in total drilling six holes, with results pending. It has also completed two pumping wells and is targeting an updated resource estimate by the end of this year and an updated Feasibility Study planned in 2024.
By achieving production and sales of lithium carbonate at the rate of 2,000 tonnes/year, the target is to earn the capital that allows production increase to 10,000 tonnes/year. In the same 4 September news release, the company reported that it is making progress with strategic arrangements for off-take and capital funding for the 10,000 tonne/year level.
Argentina Lithium and Energy: Discovery at Rincon West
Argentina Lithium and Energy Corp. (LIT.V; PNXLF.OTC, www.argentinalithium.com) is well positioned to make substantial progress exploring for lithium in Argentina. The company is actively exploring to expand their discovery at the Rincon salar, adjacent to the west and north of Rio Tinto.
The company controls 3,742 hectares at the Rincon salar, or the equivalent of six square kilometres, with the majority lying adjacent to the west side of the Rio Tinto concessions. An additional parcel of approximately 850 hectares that is adjacent to the north of Rio Tinto is also believed to be prospective.
All nine drill holes by Argentina Lithium at Rincon West in the recent campaign sampled lithium-enriched brines. Drilling focused on the central part of the property where excellent brine grades – similar to those reported in the past for Rio Tinto’s Rincon property (Montgomery & Associates, 26 July, 2021, the last resource estimate before Rio’s acquisition) – were returned over broad intervals in the majority of holes.
Prospective expansion at Rincon West
Argentina Lithium has begun the modelling work for a potential resource estimation for this first area, based on these positive results. Additionally, the company is scheduled to drill five holes on the adjacent Rinconcita II block on the east side of Rincon West. Hole Number Two from the initial nine holes, one of the best holes drilled, lies directly adjacent to the west border of Rinconcita II.
The company will then move its exploration focus to the company’s third property in the Rincon Salar, the Paso de Sico block lying to the north of Rio Tinto.
A fourth company now drilling at the Rincon salar
Power Minerals Limited (ASX: PNN, www.powerminerals.com.au), a small Australian public company, recently acquired a concession in the far southwest area of the Rincon salar, south of Argentina Lithium. The company has completed three drill holes and released results from the first hole on 29 June this year. Here, the company averaged grades of 272.7 mg/litre from 15 samples across 345m, a good result.
Assays are pending for the company’s second and third drill holes.
Summary of the status of the Rincon salar
As stated, four companies are aggressively exploring and developing lithium at the Rincon salar. Two are targeting initial near-term production, including the world’s second-largest mining company.
Argentina Lithium is working toward generating its first lithium brine resource estimate at Rincon. It has completed its first successful drilling programme at the project and will potentially drill two additional concession packages this year.
EV and battery manufacturers are likely watching developments at this salar.
Albemarle Corp. and the Antofalla Salar
The Antofalla salar is long and narrow, located 25km west of the Hombre Muerto salar, Argentina’s largest lithium-producing area.
The Antofalla Project is controlled by Albemarle Corp. (NYSE: ALB, www.albemarle.com), the world’s second-largest lithium producer. Albemarle stated publicly that the company controls one of the largest resources of lithium in Argentina at Antofalla, in their news release dated 12 September 2016.
Here, Argentina Lithium controls Antofalla North, covering the basin adjoining Albemarle on the north side. The property covers 10,050 hectares, equivalent to ten square kilometres, a substantial area. It is anticipated that Antofalla North will be permitted for exploration programmes in the near term.
The company’s plan, when permitted, is to initiate geophysical surveys in anticipation of first drilling, if merited.
To summarise
Some of the world’s largest mining companies are operating in Argentina with large-scale production of lithium anticipated from Rio Tinto at the Rincon salar and from Albemarle at the Antofalla salar.
We suggest that investors also consider the potential of the juniors that are operating adjacent to Rio Tinto and Albemarle, as described in this report. In particular, Argentina Lithium and Energy Corp. is operating next to both majors. Important news is anticipated from this junior before the end of the year.
Note: Please note that proximity to other mining projects does not provide any assurance with respect to making similar discoveries.
Please note, this article will also appear in the sixteenth edition of our quarterly publication.
