Lithium Americas Corp. (TSE:LAC) (OTCQX:LHMAF) said Monday it has completed a 3D brine numerical model, used to simulate brine extraction from its Cauchari-Olaroz lithium-potash project in Argentina, which confirmed the size and production capacity of the resource.
The model allows the prediction of brine flow within the salar, or
salt lake, as well as of the mine life, the lithium grade depletion over
time and reserves.
The company said the modeling is supported by geological,
hydrogeological and geochemical data collected through field programs at
"A 3D brine numerical model is the ultimate tool to fine tune the
mine plan in a brine development resource," said president and CEO, Dr.
Waldo A. Perez.
"The model has also supported many of the critical assumptions in our
Preliminary Economic Assessment (PEA) including the size, quality and
estimated productive life of the Cauchari-Olaroz resource estimate – one
of the largest lithium brine resource in the world.
"We are very pleased that the model also indicates that due to the
exceptional geological characteristics of our salar, we are expected to
require approximately 50% of the production wells originally estimated
in the PEA to put phase 1 of the project into production."
Results of the model will be displayed at the company’s booth at the
Prospectors and Developers Association of Canada Convention (PDAC) in
"We continue to add value to our project and to demonstrate the
technical capability of our team. We expect to deliver the definitive
Feasibility Study with reserves and a mine plan in Q2 2012," added
The company's Cauchari-Olaroz lithium project comprises a significant
portion of two adjacent Argentinean salt lakes, Cauchari and Olaroz,
covering 82,498 hectares located in the "Lithium Triangle" region of
Cauchari-Olaroz is considered the third-largest deposit of lithium in
the world. The property has a total lithium and potash resource of 8.0
million tonnes and 25.4 million tonnes, respectively.
Major automotive players Mitsubishi Corp and Magna International are shareholders of the company, in addition to them both having off-take arrangements with Lithium Americas.
In late 2011, Mackie Research said that the company was "on track to becoming a leading player in the lithium market".
Indeed, an April 2011 preliminary economic assessment (PEA) completed
by ARA Worley Parsons defined an operation with an eventual operating
capacity of 40,000 tonnes of lithium carbonate per year, having an
operating cost of $1,434 per tonne - considered to be among the most
competitive costs of any lithium operation in the world.
Looking forward, Lithium Americas
said the planned milestones for this year include an NI 43-101 reserves
estimation calculated by AquaResource Inc. in the first quarter of
2012, which will include the 3D model reported today.
The 3D model was developed by AquaResource, with the involvement of Dr. Mark King, the Independent Qualified Person for Lithium Americas.
The model included additional data collected since the previous
resource estimate filed in December 2010, including geology, hydraulic
testing and brine results from five pumping well arrays and four sets of
salt lake boundary tests, as well as a water balance analysis,
completed in 2011.
The upcoming reserve estimate will be derived from the simulation of a
conceptual production well system. The model predicts that the grade of
the pumped brine will remain above 600 milligrams per litre lithium for
a period of at least 50 years.
The model also shows that an annual production rate of 40,000 tonnes
of lithium carbonate can be achieved over a period of 40 years, without
extracting brine from outside of the property boundary. The predicted
duration for which it can maintain a production rate of 40,000 tonnes of
lithium carbonate per year within the model exceeds 50 years, the
Using data from the upcoming reserves study, ARA WorleyParsons is
expected to deliver a definitive feasibility study in the second
calendar quarter of 2012.
After the feasibility study, Lithium Americas expects to start detailed engineering in the third quarter, which is expected to be complete in nine to 12 months.
During the second half of the year, the company also expects the
approval of an environmental impact statement - a type of permit
necessary to begin construction and mining at Cauchari-Olaroz.
Other near-term milestones include the completion of a certification
and qualification process for its battery-grade lithium carbonate, the
re-assembling of a pilot plant at the project, and the closing of
financing and off-take agreements with strategic parties, Lithium Americas said.