Chile opens up to investment
In December 2017 Chile elected a new President, Sebastian Pinera. The billionaire businessman, who was President between 2010 and 2014, campaigned on a progrowth, pro-mining platform. In January 2018 Pinera made good on that promise by having his right-leaning government issue the first new lithium production and export license in decades. The pro-mining mandate also meant sweeping changes to the mining code, regulation and permitting – facilitating low-cost acquisition and fast exploration. The Chilean government continues to change the rules regarding lithium production and exportation such that foreign public companies, other than the two majors, Albemarle and SQM, are being granted licenses.
Lithium Chile’s ability to acquire all the strategic properties it holds came about because of a perfect storm, brought about by a change in government. Before Pinera was back on the scene, a centre-left coalition ruled the country, and the economy was bleak. The mining, producing and exporting of lithium was restricted by an old government decree based on its use in nuclear fuels. At the same time, Argentina had eased foreign capital restrictions, elected a pro-mining, right-wing government and supported lithium exploration. Foreign investment went to Argentina, while in Chile, companies and capital stayed away.
Low-cost land acquisitions
Except for Lithium Chile. While most lithium explorers were buying up ground in Argentina, Lithium Chile turned to geologist Terry Walker. Their man in Chile had 26 years of experience in the country, not to mention a Chilean wife and children. Walker also had access to something that would prove extremely valuable: a database of the salars first done in the 1960s and updated in the 90s. The survey for the Chilean government contained information on salar chemistries and grades, and Walker used it to identify the best properties for staking. Unbelievably, Walker was able to pick up highly prospective land blocks for not much more than $3 a hectare.
By comparison, Millennial Lithium entered Argentina in 2016 and bought its first project, Pastos Grandes (PG) at $2,000 a hectare. This project had $4.5 million in previous exploration drilling. Within six months of acquisition and additional exploration, adjoining ground at PG was selling for $3,000 a hectare. Following the realization that PG contained a mineral resource that could be mined, Millennial bought adjoining ground at closer to $9,000 a hectare (2,600 hectares for USD$22.6 million).
Now, prospective lithium blocks in Chile are going for $1,000 a hectare; not only that, the low-hanging fruit is gone, along with rock-bottom prices. Any more available land is held by Chilean corporations or families, and it is not going cheap. The possibility of replicating what LITH has accomplished in assembling it’s land package would, in your authors opinion, be impossible today. The cost alone would be staggering, Lithium Chile has a land package totaling 152,900 hectares, at today’s price of $1,000.00 per hectare to assemble the same size package would cost over $150,000,000.00.
4 key prospects
With nearly 150,000 hectares under its control, Lithium Chile went exploring in 2016. Since then, the company has completed surface and near-surface brine and salt sampling programs on six salars: Coipasa, Ollague, Helados, Atacama, Turi and Talar. Geophysical surveys on five properties have also been done, with reconnaissance drilling planned for later this year.
Of the six identified salars, four have been prioritized according to three criteria: grade, size and access. All four properties – Coipasa, Ollague, Helados, and Atacama – are accessible by paved highways – so the difference really comes down to size and grade. Surface and auger sampling returned grades ranging from 580 milligrams per liter (mg/l) at Salar de Turi, to 1,410 mg/l at Salar de Coipasa. Surface and near-surface sample grades on the four above-mentioned properties were north of 1,000 mg/l.
To put that in perspective, average lithium production grades in Argentina are 600 mg/l.
In brine lithium mining, size is important because you need large evaporation ponds. Anything less than 3,000 hectares is too small. Lithium Chile’s Coipas and Helados salars size up at a respective 11,000 and 30,000 hectares – making them suitable for building a lithium production facility in the future.
http://www.mining.com/web/lithium-chile-perfect-storm/
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