Advantage Lithium Corp. (TSX-Venture: AAL; OTCQX: AVLIF) is drilling 4,800 metres at its Cauchari joint-venture lithium project in northern Argentina’s Jujuy province to further expand and upgrade its already increased resource of 3.02 million tonnes of LCE.
This third phase of drilling comes on the heels of a positive preliminary economic assessment (PEA) that Advantage Lithium tabled in mid-August, just over a year after drilling its first hole on the property in late April 2018.
The Vancouver-based company began by drilling the northwest portion of the 92.6 sq. km property, and is working its way to the southeast with as many as four drills turning at any given time.
“The focus this year is to take the inferred resource into measured and indicated and to show that the hydrology in the pump tests and the dynamic modelling of this basin works,” says Advantage Lithium president, CEO and founder David Sidoo.
As of a May 2018 estimate, the project contains 5.5 million inferred tonnes grading 450 mg lithium per litre and 4,028 mg potassium per litre for 3.02 million tonnes of lithium carbonate equivalent and 9.5 million tonnes of potash.
The company’s PEA assigned the project an excellent US$830 million after-tax net present value at an 8% discount rate and a 24% after-tax internal rate of return. The project would require US$401 million in pre-production capital expenditure with sustaining capital of US$2.75 million per year over the mine’s 25 year life. Payback would be in three years and four months from the start of production.
The company is poised to move quickly into a feasibility study thanks to good planning and a strong relationship with its partner Orocobre (TSX: ORL; ASX: ORE), which owns 25% of the Cauchari project.
“Before we put out the PEA, we had engaged the permits, had the drill rigs ready, and were already initiating this drill program,” explains Sidoo.
Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.
Part of the Stock Digest family of websites