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Advantage Lithium Corp (TSXV:AAL; OTCQX:AVLIF) is a Vancouver based resource company focused on the strategic acquisition, exploration and development of lithium properties. With a goal of growing their reputation in the Lithium Triangle, Advantage Lithium is establishing its presence with strategic exploration projects within the epicenter of one of the world’s lithium hotspots: Argentina.
Argentina has recently become a popular exploration destination as there have been recent positive changes including increased GDP growth, the normalization of inflation, a positive reception of foreign investment and a mining-friendly government.
In late 2016, Advantage Lithium entered into a partnership with Orocobre (ASX:ORE;TSXV:ORL) which has a market cap of over $1,000,000,000. The intent of the partnership was to acquire 75 percent of the Cauchari project as well as 100 percent interest in five other properties: Antofalla, Guayatayoc, Incahuasi and two other projects under application. All of these properties are located in Argentina’s lithium triangle, in the northwestern region of the country. These acquisitions were closed in late March 2017 and Orocobre has since become Advantage Lithium’s largest single shareholder.
Through their extensive geological knowledge and experience, as well as the reputation they have fostered within the local government, Orocobre’s partnership has positioned Advantage Lithium as a strong junior explorer entering the lithium market in the region.
Advantage is currently conducting a 17-hole drilling program (five rotary and 12 diamond drill) in the Cauchari project with the aim of improving the inferred resource estimate of 230 million cubic metres of brine at 380 mg/l lithium and 3,700 mg/l potassium in 470,000 tonnes of lithium carbonate equivalent and 1.62 million tonnes of potash. The company anticipates completing an updated resource estimate in Q1 2018 and advancing toward a Feasibility Study in 2019.
The company is led by a group of award-winning company builders and industry specialists including American Oil and Gas founder David Sidoo and Orocobre CEO Richard Seville.
- Strong partnership with a premier lithium producer in Argentina with vast experience in the region.
- Working in a prime and stable lithium-producing jurisdiction.
- Mining-friendly government and good infrastructure to be found in Argentina.
- Inferred resource of 230 million cubic metres of brine at 380 mg/l lithium and 3,700 mg/l potassium in 470,000 tonnes of lithium carbonate equivalent and 1.62 million tonnes of potash.
- Current 17-hole drilling program underway to improve resource estimate.
- Low expected CapEx costs due to availability of processing facilities in the region.
- Award-winning management team of successful industry specialists.
- Advantage Lithium is now a Tier One company.
Flagship Asset: Cauchari Joint Venture
The Cauchari property is the product of Advantage Lithium’s recent partnership with Orocobre. The property is 28,500 hectares in size and is located 10 kilometers south of Orocobre’s Olaroz production facility in the northwestern province of Jujuy, Argentina.
Changes in the Argentine political landscape have been beneficial for the mining industry, drawing in many producers to the region. Having inherited management staff with existing relationships with government officials from Orocobre’s team, Advantage Lithium was well positioned to obtain multiple exploration permits for the Cauchari project.
2016 Resource Estimate
The current resource estimate for the project was released in December 2016 and it shows an inferred resource of 230 million cubic metres of brine at 380 mg/l lithium and 3,700 mg/l potassium in 470,000 tonnes of lithium carbonate equivalent and 1.62 million tonnes of potash.
Resource expansion drill program
With the objective of increasing the current resource estimates for the region, Advantage Lithium is conducting a drilling program of five rotary and 12 diamond drill holes. The targets for this exploration initiative are both the northwestern and southeastern areas of the property, measuring 24 square kilometers and 31 square kilometers, respectively. These regions were defined as targets with ranges of 0.25 to 5.6 million tonnes of lithium carbonate equivalent and 0.9 to 16 million tonnes of potash. Results of this drilling are expected to be released by mid-September 2017.
Highlights from the drill program include:
- CAU10 brine grade 682 mg/l lithium from 50-340 m in 48 hour pumping test
- CAU09 brine grade 662 mg/l lithium from 50-400 in initial 2.5 hour pumping test
- CAU08 and CAU11 reached target depth of 400 m Wells being installed for pump testing
- CAU07 – initial brine assays at 236 m depth of 635 mg/l lithium
- CAU07 – within a significant thickness of sand, suggesting very positive porosity and permeability conditions for brine extraction
- CAU16 – Initial brine grade at 619 mg/l lithium from 169-199 m
Advantage Lithium’s timelines have the project moving swiftly over the next couple of years. The primary objective for 2017 is to continue drilling in order to update and improve the current resource estimate, combining both the northwestern and southeastern areas. This would lead to a Scoping Study in early 2018, leading into infrastructure and engineering studies to complement a Feasibility Study soon after. On this schedule, Advantage Lithium expects the project to be permitted by 2019. The budgeted spending to execute these milestones is $17 million over the next 36 months.
Advantage Lithium estimates that CapEx costs for the project will be low as there are two processing facilities in the region, including Orocobre’s Olaroz facility, that could be used for processing brine. Thanks to the local expertise on the ground and the access to existing infrastructure provided by the partnership with Orocobre, the project is moving swiftly towards their established goals.
Key Assets in Northern Argentina
In addition to the Cauchari project, Advantage Lithium acquired 100 percent interest in three other properties across the Salta, Jujuy and Catamarca provinces in the northwestern region of Argentina.
The 10,653-hectare Antofalla property is located 80 kilometers from a railhead at Tolar Grande and 130 kilometers from the Chile-Argentina border. It sits in the northern segment of the Antofalla salar, on the border between the Salta and Catamarca provinces. To date, Advantage Lithium’s Argentine entity, South American Salars, has yet to perform any work on the property, but Antofalla is believed to host a deep, fault-bounded basin with lithium rich brine aquifer. Next steps for the property include a first-stage prospecting level exploration program of pit sampling, as well as geophysics and drilling once targets have been determined.
The Incahuasi property is located on the Argentine border with Chile, in the province of Salta and is strategically positioned 250 kilometers from the port of Antofagasta in Chile. The property is 9,843 hectares and neighbors SQM and REMSA (the Salta province holding company) properties positioned on each side of the border. Preliminary surface sampling has shown a low lithium but high potash target, with high calcium values offset by high magnesium values. Initial results also include up to 326 ppm lithium and 13,200 ppm potassium.
Advantage is in preliminary discussions with REMSA to consider the consolidation of the salar.
The 21,276-hectare Guayatayoc property is located 80 kilometers east of Advantage’s Cauchari project, also in the Jujuy province. Initial surface sampling returned results of up to 200 ppm lithium, 7,000 ppm potassium as well as low magnesium to lithium ratios. The basin is estimated to run deeper than 300 meters. Once drill targets are established and the dimensions of the aquifer are better understood, a first-stage exploration program for this property would include further surface sampling, geophysics and rotary drilling.
Salinas Grandes Salar
The Stella Marys project covered 1,472 hectares in the western sector of the Salinas Grandes salar located in the province of Salta, Argentina. In late 2016, Advantage Lithium agreed to assign its option over the project to LSC Lithium Corp. The company was reimbursed for any option payments and related expenses and was given a 0.5 percent royalty on the brine concentrate produced from the total 85,000 hectares developed by LSC in the Salinas Grandes Salar.
“We are pleased to complete this transaction with LSC and Orocobre as our holding at Stella Marys was small in relation to the holdings of Orocobre and LSC,” said President and CEO David Sidoo. “This transaction made sense to consolidate and as a result we obtained a royalty over the entire 85,000 hectare property package. Our current exploration program is focused on the Cauchari drill program.”
David Sidoo—President, CEO and Director
David Sidoo has a strong track record of taking companies from start-up to successful sale while delivering substantial shareholder value. He is an award-winning senior executive (Order of BC, Vancouver Sun’s “Top 100 South Asians making a Difference in BC) as well as founder and significant shareholder of American Oil & Gas (sold to Hess in all stock transition valued at over $630 million). Sidoo sits on the Board of Governors for University of British Columbia.
Callum Grant, P.Eng—Director and Project Development
Callum Grant is a Registered Professional Engineer (P.Eng.) in Ontario & British Columbia, and has served as Qualified Person for mineral resource and mining sign-offs and delivery of scoping through feasibility studies. He has broad perspective and experience in the minerals industry from exploration to production with a focus on South America and Argentina, in particular. He has extensive experience in the exploration, development and production of a broad range of metalliferous and industrial commodities including lithium. He has been a technical manager for delivery of numerous scoping, pre-feasibility, bankable feasibility and development/operating projects to NI43-101 standards.
Richard Seville, BSc Hons, MEng, MAusIMM, ARSM—Director
Richard Seville joined the Board of Orocobre as Managing Director in 2007, when it was an unlisted Argentinian explorer, chaired by Neil Stuart. He took Orocobre through to listing on the ASX in December 2007. Richard is a mining geologist and geotechnical engineer and has over 30 years of experience in exploration, development and production, and over 20 years in the corporate field as a Director involved in resource development funding. Richard has managed Orocobre’s growth to become a successful producer of lithium carbonate at the Olaroz project and he was instrumental in negotiating the Toyota Tsusho Joint Venture in 2010. He is a graduate of the Royal School of Mines and James Cook University in North Queensland and holds a Bachelor of Science Degree with Honours in Mining and Geology and a Master of Engineering Science. Richard is also a director of Leyshon Resources, a small ASX listed company.
Rick Anthon, BA, LLB, FAIM, MAICD—Director
Rick Anthon was appointed Joint Company Secretary on 10 March 2015. Rick is a practicing lawyer with over 30 years of experience in both corporate and commercial law. He also has extensive experience in the resource sector as a director of a number of resource companies and as legal adviser, including project acquisition and development, capital raising and corporate governance.
Nick DeMare, CPA, CA—CFO and Director
Nick DeMare, a chartered professional accountant, has been President of Chase Management Inc. since 1991, providing accounting, management, securities regulatory compliance and corporate secretarial services to private and public-listed companies. He also serves as an officer and/or director of a number of public-listed companies. DeMare holds a Bachelor of Commerce degree from the University of British Columbia and is a member in good standing of the Institute of Chartered Accountants of British Columbia.
Miguel Peral, GEO—Non-Executive Director and VP Exploration
Miguel Peral has worked as a professional geologist for more than 25 years in greenfield exploration, geological consulting, accomplished prospector and as an exploration manager for numerous projects. He was an exploration geologist for five years for Salta Exploraciones, where he implemented property identification and acquisition of projects with the TR Prospecting Group from British Columbia and Alberta. Peral has a broad range of expertise and extensive experience and knowledge of porphyry copper systems in Peru, Chile and Argentina. He is responsible for the discovery of new high- and low-sulphidation gold and silver epithermal showings, and identifying IOCG and VMS type alteration systems previously not recognized.
Peral’s recent focus is lithium brine deposits with an emphasis on the discovery and development of new brine deposits including Salar de Olaroz, which is now in production. He is currently a Director and General Manager of South American Salars S.A., Managing Partner of Salta Environmental SRL and is active in managing a large private portfolio of highly prospective mineral tenures in Chile and Argentina. In 2012, he was nominated as one of the most Outstanding Geologists in Argentina.
Doug Leishman, BSc. ARSM—Chairman of the Advisory Board
Doug Leishman is a highly experienced geologist and mining analyst with more than 30 years in the mining industry. He has served as a director for several successful resource companies, including Endeavour Financial Ltd, Terrane Metals Corp, Fortress Minerals Corp and Southern Arc Minerals Inc.
Murray Brooker, MSc. (Geol), MSc. (Hydrogeol), MAIG, RPGEO—Technical Advisor
Murray Brooker has over 26 years of experience in the mining industry working in various roles from exploration to resource definition, project feasibility and consulting where Murray has taken a lead role in a number of resource evaluations and independent reviews of ASX and TSX listed companies. He has worked for mining and exploration companies and as a consultant for a number of international geological and engineering consultancies.
As part of his consulting career Brooker has evaluated projects in the Americas, Asia-Pacific, Europe and Africa – with project reported in accordance with the JORC Code or the NI43-101 disclosure standards. His experience includes consulting to ASX listed Orocobre Limited on their Olaroz lithium brine mine in Argentina. Brooker was responsible for resource estimates on the Salinas Grandes and Cauchari Lithium-potassium-boron salt lake deposits and for supervision of the drilling and exploration programs leading up to the resource estimates. He is also involved with the Cauchari project (spin-out of assets from Orocobre) for Advantage Minerals in Argentina and the Maricunga salar in Chile, which is at the feasibility stage.