With lithium carbonate prices hovering above US$60,000 per tonne — a 340% year-over-year pop — and showing few signs of any imminent retreat, investors are clamoring for all things lithium and Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE) had to turn down cash as it raised almost CA$3.326 million in an OVERSUBSCRIBED PRIVATE PLACEMENT.
In total, the company raised CA$3.051 million by issuing 16,630,000 units at $0.20 apiece.
The lion’s share of the financing will pay for the Rinconcita (little Rincon) II mining concession on the Salar de Rincon in Salta Province, Argentina. Argentina outbid several other parties to buy the concessions from provincially-owned company, Recursos Energéticos y Mineros Salta S.A. (REMSA).
“This oversubscribed private placement will allow Argentina Lithium to fund both the acquisition of the Rinconcita II property in the Rincon Salar and the ongoing drill program," Argentina Lithium President and CEO Niko Cacos told Streetwise Reports.
Argentina Lithium will pay REMSA $2.5 million, and the vendor retains a 3% net smelter return royalty on production and refined products from Rinconcita II.
Rinconcita II has seen little exploration, and it wasn’t even sampled by Argentina Lithium prior to purchase. The company also acquired the 20.5-hectare Demasia Villanoveño II property through applications presented at the Salta mining authority.
Argentina geologists can get to Rinconcita II by road and it’s not far from Olacapato and Estacion de Pocitos, two towns in Salta province. An international highway, with an electric power corridor running alongside, is about 25 kilometers northeast of the property, while a rail line is roughly 35 kilometers south.
The 460-hectare Rinconcita (little Rincon) property is at the east end of Argentina Lithium’s flagship Rincon West property and adjacent to Rincon Mining’s Rincon Project, a subsidiary of Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK). The mining giant bought Rincon Mining earlier this year for more than US$800 million.
“This oversubscribed private placement will allow Argentina Lithium to fund both the acquisition of the Rinconcita II property in the Rincon Salar and the ongoing drill program. Consolidating our portfolio in this highly prospective salar adjacent to Rio Tinto is a top strategic objective,” Argentina Lithium President and CEO Niko Cacos told Streetwise Reports.
Argentina lithium is currently undertaking a five-hole drill program at Rincon West. The company released drill results from the first hole in July, but more results are expected soon.
Brine samples collected over a 70-meter-thick permeable interval in RW-DDH-001 returned lithium grades ranging from 225 to 380 milligrams per liter.
In a conference call on July 14, Argentina Lithium’s Vice-President of Exploration Miles Rideout told the audience that the brine deposit at Rincon West is indeed an extension of the salar being developed at Rio Tinto’s Rincon Project. Streetwise Reports details this call here.
“We have the geophysical evidence and the physical evidence from the first drill hole. What we're mapping in the hole is consistent with values published on the (Rincon) salar, so it's pretty certain that the salar extends beneath our (Rincon West) property,” Argentina Lithium Vice-President of Exploration Miles Rideout explained.
Fundamental Research Corp.'s Head of Research Sid Rajeev wrote in a report dated July 13 that “as LIT’s projects are close to well-known projects held by majors, the company can be subject to M&A events if it is able to delineate a resource in one or more of its assets.”
Rajeev expects a maiden resource on Rincon West in 2023. He gives Argentina Lithium a Fair Value price of CA$0.52.
Fundamental Research Corp. Head of Research Sid Rajeev expects a maiden resource on Rincon West in 2023. He gives Argentina Lithium a Fair Value price of CA$0.52.
The Salar de Rincon is in the Lithium Triangle, named for the shape of the region straddling northern Argentina and Chile, as well as southern Bolivia. The area hosts about 60% of the world’s lithium reserves.
Argentina itself ranks fourth globally in the production of lithium and ranks third worldwide in total reserve-base behind only Chile and Australia.
Reuters reports that Joe Grosso, the sage head of the eponymous Vancouver-based Grosso Group, the umbrella entity that houses Argentina Lithium, Blue Sky Uranium Corp. (BSK:TSX.V; BKUCF:OTC; MAL2:FSE) and Golden Arrow Resources Corp. (GRG:TSX.V; GARWF:OTCQB; G6A:FSE), owns about 5.4% Argentina Lithium, while Cacos owns about 1.8%.
The company has about 74 million shares issued with few significant institutional holders. The shares trade in a 52-week range of $0.15 to 0.96 on solid volume. LIT last closed at CA$0.215 on August 25, 2022.
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1) Brian Sylvester wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.
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