The Lithium Triangle, a region that includes parts of Chile, Argentina, and Bolivia, produces around half of the world’s lithium, and Argentina itself is the world’s fourth largest lithium producer. Lithium is an essential ingredient for batteries for electric vehicles (EVs), and as demand has soared, so have prices, with the price of lithium carbonate quadrupling over the last year.
Enter Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE), a small-cap firm with four exploration lithium projects in Argentina. The company is part of the Grosso Group, a chain of companies that have a history of mineral exploration success in Argentina going back several decades. Chairman Joseph Grosso was named Argentina’s Mining Man of the Year in 2005.
Catalyst: Maiden Resource Calculation in the Spring
Rincon West is Argentina Lithium’s flagship project, located on the Rincon Salar in mining-friendly Salta Province, an area ranked second-best for mining in Argentina in the Fraser Institute’s annual survey of mining companies. Salars are salt lakes that can have lithium diluted in the underground brine.
Adjacent to Rincon West is the Rincon project that mining giant Rio Tinto acquired for US$825 million earlier this year. Australia-based Argosy Minerals Ltd., an AU$800 million market cap company, also has a lithium project in the area that it plans to fast-track development.
Fundamental Research's Rajeev noted, "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."
Transient electromagnetic (TEM) surveys on Argentina Lithium’s 3,742-hectare Rincon West project detected strata consistent with aquifers containing concentrated brines over 64% of the property.
The company followed up on this with exploration drilling, with six holes completed so far and results announced on the first four. The initial hole gathered brine samples over a 70-meter thick permeable interval and returned lithium grades ranging from 225 to 380 mg/liter. Assays from the second drill hole resulted in lithium values ranging from 337 to 367 mg/liter.
"Drilling thus far validates that the adjacent lithium salar extends under our properties, with consistently high lithium grades,” stated Miles Rideout, the company’s vice president of exploration.
"The fourth exploration hole has produced our best results to date. Lithium brines start at 38 meters depth, but the exciting result is the interval from 95 m to 227 m, with lithium values ranging from 334 to 382 mg/liter over a continuous 132 m interval,” noted Rideout.
"What's interesting is that all four holes have discovered lithium in grades and intersections that are comparable with those grades and intersections at Rio Tinto and Argosy,” CEO Nikolaos Cacos told Streetwise Reports. "So it looks like we're off to the races. We're feeling very, very confident. We've got something of significance here.”
The company expects to release a maiden resource calculation on Rincon West in the spring.
Argentina Lithium’s second flagship project is the Antofalla North project, located less than 20 km west of Salar de Hombre Muerto, Argentina’s largest lithium-producing operation. Lithium giant Albemarle holds property just 500 meters south of the Antofalla North project. Argentina Lithium holds about 15,000 hectares of claims on the property, both wholly owned and optioned.
The company is awaiting the receipt of its exploration work permit and then plans to begin a TEM geophysical survey, followed by a drill program.
In addition, Argentina Lithium holds two more lithium properties in Argentina, the 26,000-hectare Pocitos project and the 25,000-hectare Incahuasi project, that are not as far along in exploration.
Fundamental Research’s Head of Research, Sid Rajeev, published a report on Argentina Lithium on July 13, 2022. At the time, when LIT stock was trading at CA$0.24, he noted that "LIT is trading at just $215/hectare vs. the average of $524/ha for pre-resource stage juniors. The sector had several M&A transactions in the past year, and we believe that miners and battery manufacturers are constantly seeking attractive lithium projects for acquisition to secure long-term/stable supply." The stock is currently trading at CA$0.28.
Rajeev also noted, "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."
The firm initiated coverage with a Buy rating and noted that upcoming catalysts include "drill results from Rincon West and robust investor appetite for EV metals.”
The firm has approximately 129 million shares issued and outstanding and 213 million shares fully diluted.
Argentina Lithium stock trades on the TSX Venture Exchange and, over the past 52 weeks, has traded in a range of CA$0.20 to CA$0.50. It also trades on the U.S. OTC market under the ticker PNXLF.
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