Lithium Americas says Cauchari-Olaroz project may require fewer wells than anticipated

Lithium Americas (TSE:LAC) announced Wednesday that results from its recently completed production well pump test in Argentina indicate that it may require fewer wells than estimated in its preliminary economic assessment (PEA).

These results are an important step in moving the project towards commercial production as they indicate that brine can be extracted from the salt lake at significant rates without affecting the chemistry (or quality) of the brine.  The pump test results will also enable the company to upgrade its NI 43-101 measured and indicated resource into a proven and probable extractable reserve.

President and CEO of Lithium Americas Dr. Waldo A. Perez said: “Pump testing in production size wells is a fundamental milestone in the development of any lithium brine project. Beyond its size, the economics for developing and producing from the Cauchari-Olaroz resource continue to improve."

"We continue to work on completing our Definitive Feasibility Study and look forward to starting mine construction of our world class lithium project in 2012," Dr. Perez said.

The PEA, produced and filed by ARA Worley Parsons in early May 2011, assumed that 40 production wells would be necessary to achieve a total lithium brine production rate of 400 litres per second for the production of 20,000 tonnes of lithium carbonate per year.

However, the pump tests, which examined five production wells on the company's major asset, the Cauchari-Olaroz lithium brine project, indicate that Lithium Americas may only required about half of the original number of wells estimated to achieve this level of production, which would significantly decrease its capital costs and operating cost requirements, the company said.

Of the five wells tested, four were used to evaluate the yield potential of the brine aquifer. These wells achieved flow rates of up to 25 litres per second, and the results will be used to upgrade the company's NI 43-101 resource estimate to the proven and probable extractable reserve category, from the measured and indicated category.

The remaining well evaluated the yield of the freshwater aquifer, which the company claims is an important factor in keeping costs low. This well achieved a flow rate of approximately 40 litres per second, confirming the presence of a viable freshwater resource, further decreasing capital costs and operating expenditures.

Freshwater, flowing at approximately 60 to 80 litres per second, is required to operate the on-site lithium carbonate processing plant. Without this plant, Lithium Americas would need to transport its concentrated brine for the final lithium refining process.
The results from the freshwater well also indicated that six wells could satisfy the amount of freshwater required.

Lithium Americas, which is working to develop one of the world’s largest and lowest cost lithium operations, said it plans to begin mine construction in 2012.

The company's shares ended trading Tuesday down 1.42% at $1.39.