Overview

Pursuit Minerals Ltd. (ASX:PUR) is a top-tier lithium exploration and development company. The company is focused on its flagship Rio Grande Sur lithium project in the Salta Province of Argentina. The project is strategically located in an area known as the Lithium Triangle which hosts 50 percent of the global lithium resources and 40 percent of the current global lithium production. Argentina is the world’s third largest producer of lithium, behind Australia and Chile.

The project spans an area of 9,260 hectares on the Rio Grande Salar and is adjacent to several operating lithium mines and development operations, including Acradium Lithium’s Fenix lithium mine and the Olaroz lithium mine. The Rio Grande Salar holds a historical Ni 43-101 resource declared by LSC Lithium, formerly listed on the TSX prior to being acquired by Plus Petrol of 2.1 million tons (Mt) of lithium carbonate equivalent (LCE) with an average grade of 370 milligrams per litre (mg/L). This resource was mostly obtained from shallow drilling to 100 metres.

Pursuit delivered a maiden JORC Inferred Mineral Resource Estimate (MRE) of 251.3 kt LCE at 351 mg/L at the Rio Grande Sur project. The inferred resource relies on recent geophysical surveys and historical drilling, encompassing only a small portion of the known mineralization. Notably, excluding the highly promising Mito tenement from the current MRE highlights the unexplored potential for further resource expansion.

Pursuit has commenced its Stage 1 maiden drill program focused on upgrading the inferred resource. The drilling is anticipated to reach depths of 500 to 600 metres below surface, significantly deeper than the existing defined JORC mineral resource depth. Other companies in the region have obtained impressive results and grades of 900 mg/Li+ at depths of 500 metres, some of the highest known grades in Argentina. Pursuit expects a material resource upgrade in the second half of 2024 which will build on the inferred maiden resource.

In addition to having an attractive lithium resource, Pursuit is focused on the production of lithium carbonate to meet the supply side response to growing lithium demand. Recently, the company announced the first phase of operations of its 250 tons per annum (tpa) pilot plant to produce lithium carbonate. The plant will generate both technical and battery grade lithium carbonate at a purity of 99.95 percent, employing a conventional evaporation process.

Pursuit has submitted advanced environmental permits for the construction of the 250 tpa evaporation ponds and Stage 2 drill program at the northern tenement of the Rio Grande Sur project.

The establishment of the ponds is expected to take place in the latter part of 2024, pending environmental approvals. The ponds and the plant are planned to be situated on the Sal Rio 02 tenement enabling the possibility of initiating the first production of lithium carbonate on-site in 2025.

Pursuit is targeting continuous production at Rio Grande Salar and expects the current setup to be scalable to produce 15,000 to 20,000tpa of technical and battery grade lithium carbonate.

The company’s focus on Argentina has several advantages. The new government, led by its president Javier Milei has signaled a market-friendly and pro-business policy shift. This should be a positive development for lithium miners given that Argentina has one of the largest lithium reserves in the world. Argentina holds 21 percent of the world’s 105 million tons of lithium resources, second only to Bolivia, according to the United States Geological Survey’s Lithium Statistics and Information 2024 report.

Lithium is in great demand driven by the growth in electric vehicles (EVs). Bloomberg NEF estimates lithium demand to jump by 225 percent to 2.6 Mt of LCE by 2030, translating into a CAGR of 16 percent. In a net-zero scenario, Bloomberg pegs the demand at 3.6 Mt of LCE by 2030, a CAGR of 19 percent.

The company remains focused on project execution that will deliver long-term shareholder value, including the completion of stage 1 drilling, JORC resource upgrade, first production of lithium carbonate and increasing production capacity to 250 tpa, and receipt of environmental permits, all within the first half of 2024.

In addition, Pursuit has identified the following catalysts over the next 12 months:

1. Q3/Q4 2024: start of evaporation pond construction at Rio Grande, off-take agreement, relocation of 250 tpa pilot plant to Rio Grande.
2. Q4 2024/Q1 2025: Detailed mineral resource study for commercial scale lithium carbonate operation; stage 2 drilling and JORC resource upgrade; first production from 250 tpa plant could commence as early as Q4 of 2025.