Maricunga Lithium



Maricunga Lithium Project

  • Bearing Lithium (TSXV:BRZ) acquired Li3 Energy (OTCQB:LIEG) in September 2017 for consideration of 16M shares.
  • Li3 Energy’s primary asset is a 17.7% interest in the Maricunga lithium project in Chile, which is free-carried through the delivery of a definitive feasibility study (DFS) by the projects’ partner.
  • The Maricunga Project is the highest grade, undeveloped lithium salar in the Americas. It is second in grade only to the Salar de Atacama, which accounts for 100% of Chile’s lithium production and about 40% of global production.
  • Over US$30 million has been invested in the project to date which has generated a NI 43-101 Measured Resource of 1.7 Mt LCE and Inferred Resource if 0.4 Mt at an average grade of 1,160 mg/L Li.
  • The project is comprised of a number of tenements totaling 4,463 hectares, some of which are grandfathered under a previous mining code which allows for the immediate exploitation of lithium.
  • POSCO (NYSE:PKX), one of the world’s largest steel manufacturers, invested US$18M into Li3. Developed proprietary lithium extraction technology which recovered over 80% of lithium from brine in under 24 hours with a fraction of the environmental footprint.
  • A significant exploration and development program is underway to de-risk the project, with US$22 million to be expended by property partner to culminate in the delivery of a Definitive Feasibility Study (DFS) in Q4/2018.

Technical Report on the Maricunga Lithium Project NI 43-101 Technical Report on the Maricunga Lithium Project NI 43-101 (12751 KB)

About the Project

 

The Maricunga project is located 170 kilometres northeast of Copiapo in the III Region of Atacama in northern Chile at an elevation of 3,800 metres above sea level (masl). The project is comprised of a number of tenements totalling 4,463 hectares.

The Maricunga project has seen significant past exploration, with over US$30 million expended to date.


Location of the Salar de Maricunga


Tenement Map

 

Tenement List


NI 43-101 Preliminary Economic Assessment

  • The preliminary economic analysis (PEA) is based on the following assumptions:
    • Construction commencing in 2019 with first production in 2022
    • All numbers based on a constant U.S. dollar basis
    • Assume full equity project funding (BRZ ownership 18.02%)



 
  • Accuracy of operating and capital cost estimates expected within a +/- 25% range
    • Development cost estimated at US$366M excluding potash plant, plus indirect costs of 14.2% (US$55M) and 18.6% (US$83M) contingency
    • Operating cost of US$2,938/t LCE and declining to US$2,635/t LCE with by-product potash credits
  • Operating costs are in the lowest quartile of the global cost curve


 

NI 43-101 Resource Estimate

The Maricunga project has NI 43-101 Measured and Indicated Resource of 325,000 tonnes of lithium at an average concentration of 1,143 mg/L lithium plus an Inferred Resource of 80,000 tonnes of lithium at an average concentration of 1,289 mg/L lithium.

The resource was prepared by Frits Reidel, CPG, President of Flo Solutions and calculated using ordinary kriging for the chemical and drainable porosity data, estimated independently.

 

Maricunga Resource Estimate

 

Expressed in more common compounds, the Measured and Indicated resource total 1.7million tonnes of lithium carbonate equivalent (“LCE”) plus an Inferred resource of 0.4 million tonnes of LCE. In addition, there is a significant potash resource of 4.5 million tonnes of potassium chloride (KCl) within the Measured and Indicated Resource plus an Inferred resource of 1.2 million tonnes of KCl. A breakdown of the resource as expressed in common compounds is presented below. The resource has magnesium-to-lithium ratios of 6.5:1 and a potassium-to-lithium ratio of 7.3:1.

Maricunga Resource Estimate Expressed in Common Compounds

 

An exploration target has been identified between a depth of 200 m and 400 m (immediately below the current resource) based on the results of borehole S-19 (TD 360 m) which bottomed inmineralized lithium brine. This exploration target may contain potentially an additional 195,000 to 470,000 tonnes lithium (1.0 to 2.6 million tonnes of lithium carbonate equivalent) and 1.530,000 to 3,470,000 tonnes potassium (3.0 to 6.6 million tonnes of potassium chloride equivalent) between 200 metres and 400 metres depth.

It must be noted that exploration targets are not mineral resources. The potential quantity and grade of the exploration target is conceptual in nature, and there has been insufficient exploration to define a Mineral Resource in the volume where the Exploration Target is outlined. It is uncertain if further exploration drilling will result in the determination of a Mineral Resource in this volume.

 

The Maricunga Joint-Venture Agreement

  • All the tenements / concessions are held by the Maricunga Joint Venture company (Maricunga JV).
  • Under the terms of the joint-venture, Minera Salar Blanco (MSB) and Bearing (BRZ) are free carried with Lithium Power International (LPI) funding all expenditures through to the delivery of a Definitive Feasibility Study (DFS) by Q4/2018.
  • LPI acquired a 51.0% interest through exploration, property and share payments totaling US$28.4 million.
  • The Board for the Maricunga JV is comprised of six (6) board members with representation by LPI (3 seats), MSB (2 seats) and Bearing (1 seat).

 

Maricunga Joint Venture Ownership Structure

 



Maricunga JV Development Timeline


 

Chilean Mining Law & Pathway Forward

  • Lithium is considered “strategic” in Chile and therefore it is a non-concessible substance.
  • Only mining exploitation concessions initiated before 1979 are authorized for the exploitation of lithium. These are referred to as “old code” or grandfathered tenements / claims. The Cocina, San Francisco, Salamina and Despreciada concessions fall into this category.
  • Lithium production is controlled by the Chilean Government which proceeds on the basis of formal tonnage production quotas assigned by the Chilean Nuclear Energy Commission (CChen). For non-grandfathered claims an additional permit, or Special Lithium Operations Contracts (CEOL), is required.
  • Recent awards include the Maricunga JV, Codelco, Albemarle and SQM.
    • Maricunga JV was granted authorization from the Chilean Nuclear Energy Commission (CChEN) to extract up to 0.473 Mt of lithium carbonate from the Maricunga salar.
    • Codelco, as part of a formal sales process for its lithium claims, attained a permit by the Chilean Nuclear Energy Commission (CChEN) and the Special Lithium Operations Contract (CEOL) to extract up to 1.73 Mt of lithium carbonate (325,045 t Li) from the Maricunga salar.
    • SQM (NYSE:SQM) was granted an amendment of its lithium production rights with the Chilean Economic Development Agency (CORFO) to expand its quota to 216,000 tonnes annually of technical and battery grade lithium through 2025.
    • Albemarle (NYSE:ALB) was granted an amendment of its lithium production rights with the Chilean Economic Development Agency (CORFO) to expand its quota to 80,000 tonnes annually of technical and battery grade lithium over the next 27 years.



Current Projects and Opportunities

Maricunga Lithium    Fish Lake Valley    HY / Jay