Lithium Americas expects definitive feasibility for Argentina project by H1 2012

Lithium Americas Corp. (TSE:LAC) (OTCQX:LHMAF) said Tuesday that it expects to have a definitive feasibility study for its Cauchari-Olaroz lithium-brine project in Argentina ready within the first half of next year, with construction of the project to begin shortly thereafter.

Today, the company filed its financial statement for the three and six months ending August 31, and as of that date, has spent a total of C$34.6 million in property rights and exploration to advance the Argentina project, which stands to be one of the world's largest and lowest-cost lithium properties.

As at August 31, Lithium Americas had $15.5 million in cash and equivalents and positive working capital of $15.6 million to further its work. The company has a staff of six full-time engineers working on the engineering process as it works to complete its definitive feasibility study.

"Each quarter we continue to make significant progress in moving our project closer to commercial production," said president and CEO, Dr. Waldo Perez.
Indeed, the company completed a number of operational achievements in its latest quarter, including the completion of bench scale tests, a full cycle of evaporation from its industrial-scale ponds, a laboratory expansion and thermodynamic model to predict the brine processing route, as well as the announcement of successful results from a production well pump test.
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 South America.
This region contains over 80% of the world’s lithium brine reserves, and an independent ranking said Lithium Americas' property was the third largest known lithium brine resource in the world.
Typically, when lithium is recovered from brine (considered the more economical and environmentally friendly process as opposed to hard rock), brine is pumped from subsurface aquifers, through a circuit of evaporation ponds to increase concentration.
High grades and recovery rates, favourable lithologies, low magnesium ratios and high specific yield rates are required to ensure enough contained brine will drain out of a formation by pumping.
The information from the bench scale tests during the quarter was used to design the company's lithium carbonate pilot plant, which is currently being constructed and is expected to be operational in the fourth quarter, the company said.

The pilot plant is anticipated to produce 99.5 percent purity lithium carbonate, with roughly 30 kilograms of lithium carbonate output per day - to be used to provide industrial samples to potential customers for qualification purposes.

The preliminary economic assessment in April provided for a 40,000 tonne per year lithium carbonate production facility built in two phase of 20,000 tonnes per year, with construction expected to begin in 2012.

Further, a total of five production wells were tested in the last quarter to evaluate the yield potential of the brine acquifer, with positive pump test results yielding up to 25 litres per second. The company said this indicates that fewer production wells could be required than estimated in the preliminary economic assessment. Pump test results also yielded 40 litres per second in the freshwater aquifer, which confirms the presence of a viable freshwater resource, allowing a decrease in capital requirements.

The PEA, which did not include potential additional value of potash or boric acid production, estimated capital costs of US$217 million for the first phase, and cash operating costs of $1,434 per tonne, believed to be one of the lowest in the industry. The project was estimated to have an after-tax net present value of a whopping US$715 million, at an 8% discount rate.

Mitsubishi Corp and Magna International are shareholders of the company, in addition to them both having off-take arrangements with Lithium Americas.