BREAKING: Major Automaker Stellantis Makes Key Investment In Small-Cap Argentina Lithium & Energy Corp.
TSX-V: LIT | OTC: PNXLF
Advancing Multiple High-Potential Lithium
Prospects in the Prolific Lithium Triangle
Canada-based Argentina Lithium & Energy Corp. (TSX-V: LIT)(OTC: PNXLF) is focused on acquiring high-quality lithium brine projects in mining-friendly Argentina and advancing them toward production in order to meet escalating lithium demand from the global battery sector.
The company’s impressive project portfolio comprises four early-stage exploration properties spanning 67,000-plus hectares in the prolific Lithium Triangle: Rincon West, Antofalla North, Pocitos, and Incahuasi.
In a stunning development, major auto-conglomerate Stellantis (NYSE: STLA) just acquired a 19.9% stake in Argentina Lithium’s subsidiary in Argentina for the ARS$ equivalent of a US$90 million investment into the small-cap explorer.
That key investment, which was first made public in September 2023, was more than 3X Argentina Lithium’s entire market cap at the time of the announcement. Much more on that in a moment.
Argentina Lithium & Energy (“LIT”) is also a member of the prestigious Grosso Group, a resource management group that has pioneered mineral exploration in Argentina since the early 90s and who has been involved with a number of major mineral discoveries in the South American nation.
With such a sparkling track record of discovery success, it’s nearly impossible to overstate the operational advantage the Grosso Group provides to LIT as it literally spans the entire spectrum of acquisition, exploration, and development of mineral projects throughout Argentina.
And through those channels, the Argentina Lithium team has been able to amass its impressive lithium project portfolio in prime areas of the Argentinean portion of the famed Lithium Triangle (Argentina, Chile, Bolivia) — a region that lays host to approximately 60% of world’s known lithium reserves and produces about a third of the world’s lithium supply.
With nearly unlimited potential for new discovery, let’s take a quick look at LIT’s current lithium project portfolio.
Project Snapshot - Focus on Drilling:
Argentina Lithium’s four current lithium projects are located in large salt flats, known as “salars,” where lithium mineralization is concentrated in below-surface brines.
As mentioned, LIT’s projects span a combined 67,000-plus hectares (almost 250 sq mi) across four salars in the pro-mining provinces of Salta and Catamarca.
Each property is strategically located near key infrastructure and towns with year-round access to the properties through an extensive network of existing roads.
Rincon West Lithium Project: Flagship project situated in the Salar de Rincon, Salta Province, in close proximity to projects being advanced by Rio Tinto PLC (NYSE: RIO) and Argosy Minerals Ltd. (OTC: ARYMF). Phase-1 drilling and 3D modeling underway to support future resource estimation.
Antofalla North Lithium Project: Located 25 km west of Argentina's largest lithium producing operation at Salar de Hombre Muerto, Salta Province. High-conductivity targets identified through a recently completed geophysical survey to be used in future drilling.
Pocitos Lithium Project: Located proximal to other lithium-bearing salars in Salta Province. Project has seen limited exploration by previous operators, presenting an opportunity for new discoveries.
Incahuasi Lithium Project: Situated in the Incahuasi Salar, Catamarca Province. Underexplored property with potential for quality lithium brines at depth.
Argentina Lithium & Energy is led by CEO Niko Cacos, who has worked with the Grosso Group since its inception and who serves as a senior level executive for all of the group’s member companies.
The top-notch team also includes geophysicist and VP Exploration Miles Rideout who has directly managed the acquisition and exploration of dozens of lithium properties in northern Argentina.
Together, the Argentina Lithium team is laser-focused on advancing its portfolio of Argentina-based lithium exploration projects to the benefit of LIT / PNXLF shareholders.
Mega Auto Conglomerate Stellantis Makes
Key Investment Into Argentina Lithium & Energy
On 5 October 2023, Argentina Lithium closed an ARS$ equivalent US$90M investment into the company’s subsidiary by major automaker Stellantis, which includes an offtake agreement for up to 15,000 tonnes of lithium per annum.
Stellantis, for those of you who may not know, is a NYSE-listed constellation of 14 iconic automotive brands, including Jeep, Ram, Dodge, and Maserati.
As noted, that investment by Stellantis was more than 3X LIT’s total market cap at the time of the announcement, further underpinning the robust potential of Argentina Lithium’s projects.
The funds will be utilized to advance LIT’s portfolio of lithium assets in Argentina’s Salta Province, of which Stellantis now has a vested interest, at a 19.9% stake, in seeing those projects successfully progress through the various stages of exploration and development all the way through to production.
Argentina Lithium CEO Niko Cacos — whom you’re about to hear from directly in our exclusive interview coming right up — had this to say via press release:
“We are delighted to have Stellantis as a partner in the future development of our lithium projects in Argentina. Together, we share a vision to build a sustainable lithium mining operation for the future. We look forward to a strong and successful relationship with Stellantis and we are committed to delivering a sustainable lithium product that will contribute to the electrification of transportation and the protection of our atmosphere.”
As noted, Stellantis’ investment equates to nearly a 20% stake in LIT’s subsidiary, and this can be converted to an equivalent stake in LIT itself. Needless to say, a terrific partner to have.
The aforementioned offtake agreement calls for up to 15,000 tonnes per annum of lithium produced by the company over a 7-year period at an agreed upon market-based price formula at the time of each pending shipment.
The Stellantis agreement places Argentina Lithium in an advantageous position to explore, develop, and advance its key lithium projects within Salta Province.
Let’s take a deeper look at each project.
LIT’s Impressive Lithium Project Portfolio
Argentina Lithium & Energy Corp. is advancing four high-potential lithium exploration projects in northwestern Argentina: Rincon West, Antofalla North, Pocitos, and Incahuasi.
The Flagship: Rincon West Lithium Project
Situated in the Salar de Rincon, Salta Province, the newly expanded 5,200-hectare flagship Rincon West project lies in close proximity to lithium brine projects advancing towards commercial production by Rio Tinto and Argosy Minerals.
On 19 October 2023, Argentina Lithium (LIT) announced the resumption of drilling at Rincon West along with the receipt of an environmental permit allowing for exploration at the contiguous Rinconcita II concession.
The current drill phase is a continuation of earlier drilling at the Villanoveño II block wherein Hole No. 9 returned the highest peak lithium value and longest concentrated brine interval (258 meter interval ranging from 287 to 402 mg/liter lithium, including two unsampled intervals) reported to date at Rincon West.
Rinconcita II represents the eastward extension of the Rincon West project over the salt flat towards Rio Tinto’s Rincon project.
LIT subsequently completed a 12-line-km ground geophysical survey at the property and mobilized a diamond drill rig to site. The field team is currently executing the second hole of a 6-hole exploration program.
Argentina Lithium VP Exploration Miles Rideout commented via press release:
“The Rinconcita II property extends our holdings eastwards over the salt flat and has not previously been explored. The new CSAMT geophysics demonstrate that all parts of this block exhibit extremely low electrical resistivities at depth, consistent with the presence of brine-saturated formations. The current drill program is intended to verify the presence and lithium grades of these brines, in order to incorporate them into the resource model we are building for Rincon West.”
Argentina Lithium CEO Niko Cacos added:
“The US$90M equivalent investment in our company by automotive giant Stellantis comes with the mandate to accelerate exploration at our core projects, with the aim of advancing to the assessment of development potential as quickly as possible. We anticipate increasing the scale and number of our exploration programs as permits are received for our projects. This is a big undertaking, and we are now well financed to aggressively move forward with this work.”
The recently completed 12-line-km CSAMT survey demonstrated the presence of extremely conductive strata (low resistivity) at less than 100 meters below surface, consistent with formations saturated with lithium-bearing brines.
With the geophysical survey results in-hand, LIT has engaged AGV Falcon Drilling to drill-test the property to confirm the presence of enriched lithium brines at depth. The program calls for six diamond drill holes (with the second hole underway as mentioned) and one rotary drill well for pump testing.
Further, the northern Paso de Sico concession block, which is presently undrilled, is currently in the permitting process for exploration geophysics and drilling.
The ongoing Phase-1 drill program and 3D modeling will support a future Mineral Resource Estimate (MRE) for the property.
Antofalla North Lithium Project
The Antofalla North project is situated 25 km west of Argentina's largest lithium producing operation at Salar de Hombre Muerto, Salta Province.
In the last year, the company has expanded the Antofalla North project with the acquisition of four additional mine concessions. With the new concessions, the project now spans over 16,000 hectares of mining leases in the Antofalla Salar distributed between the adjacent provinces of Salta and Catamarca.
Argentina Lithium CEO Niko Cacos said of the salar, the project, and the newly acquired mineral claims:
“Our team has identified the Antofalla Salar as one of the most prospective undeveloped lithium brine basins in Argentina, and we are aggressively consolidating our land position in Antofalla North. With these new acquisitions, Argentina Lithium’s properties extend from a half kilometer north of Albemarle concessions, towards the north for approximately 27 kilometers. We have begun the permitting process, in order to explore this salt flat with advanced geophysical imaging and drill testing.”
The southern boundary of the Antofalla North project is situated approximately 500 meters north of properties controlled by global lithium producer Albemarle Inc. (NYSE: ALB).
Preliminary high-conductivity targets have been identified through geophysical surveying.
The LIT team is planning a follow-up 110-line-km TEM geophysical survey across the property to further delineate targets for an initial drill program (up to 6 holes) starting in Q1 2024, followed by up to 24 infill holes, pending permitting.
Pocitos Lithium Project
Situated proximal to other lithium-bearing salars in Salta Province, the 26,000-hectare Pocitos project has seen limited exploration by previous operators, presenting an opportunity for new discoveries.
Argentina Lithium is planning detailed work to detect and delineate brine concentrations for testing at Pocitos.
The upcoming work program is slated to include a planned 170-line-km survey to potentially be followed by Phase-1 drilling of up to 4 drill holes in 2024.
Incahuasi Lithium Project
Situated in the Incahuasi Salar, Catamarca Province, the Incahuasi project is considered a highly underexplored property with potential for quality lithium brines at depth.
Previous fieldwork produced maximum values of 409 mg/liter lithium and 1.56% potassium recovered in near-surface sampling to 8 meters of depth.
Historical drilling (4 holes) confirmed lithium bearing brines averaging 109 mg/liter Li and 6,718 mg/liter potassium.
An upcoming work program is slated to include a planned 90-line-km survey designed to detect and delineate new brine concentrations for testing.
In all, LIT is advancing its four Argentina-based lithium projects through exploration with the goal of delineating multiple economically viable lithium deposits.
All four projects are considered early-stage exploration with designated work programs (see flow chart below) for each project — meaning plenty of news flow ahead.
The global electric vehicle (EV) megatrend is driving demand for a key element in battery power generation — LITHIUM.
Global EV sales are sharply on the rise, surpassing 10 million units last year and up 55% from 2021 according to the International Energy Agency (IEA).
Total EV sales are expected to rise to a record 14 million units for full year 2023.
Bloomberg projects that, by 2040, two-thirds of all global vehicle sales will be electric.
That’s over 55 million EVs being sold annually — a nearly 4-fold increase from the 14 million being sold today.
Tesla founder Elon Musk goes a step further, proclaiming that all transportation on Earth will eventually go electric.
Benchmark Minerals — some of the smartest guys and gals in the room when it comes to critical metals research — estimates that the industry needs to invest $116B by 2030 if global economies are to achieve the lofty targets governments and automakers have set for themselves.
The bottom line is that there aren’t enough mines coming online to supply the lithium necessary to make this happen. Plus, lithium projects can take a full decade or more to go from discovery to production.
Benchmark puts it this way,
“Even if every asset in the pipeline came online on time and hit their projected lithium production capacities, the world would still need 1.8 million tonnes on top of that to meet the high case demand.”
“It’s almost impossible, and definitely a race against time,” Cameron Perks, an analyst at Benchmark, said. “The big money that needs to be spent takes time to get approval for and to deploy.”
BMI, a Fitch Solutions research unit, is predicting a lithium supply deficit by 2025. In a recently published report, BMI largely attributed the deficit to China’s lithium demand exceeding that of its supply:
“We expect an average of 20.4% year-on-year annual growth for China’s lithium demand for EVs alone over 2023-2032.”
It all points to potential for a growing lithium supply deficit coupled with rising lithium spot prices going forward.
To illustrate further, the world produced only around 130,000 tonnes of lithium in 2022 with demand coming in much higher than that at around 300,000 tonnes. By 2030, the World Economic Forum projects that global lithium demand will reach over 3 million tonnes.
That’s a projected 10-fold demand increase in just the next 6 years.
And with few new large-scale lithium projects scheduled to enter production over that span, that already massive lithium supply deficit could prove even larger.
Even the giant oil companies are now acknowledging that lithium is indeed the “New Oil.”
Reuters recently reported that Exxon is in talks with Tesla, Samsung, and Ford, among others, to supply lithium, which is really interesting considering Exxon doesn’t produce any lithium — YET.
And it’s not just Exxon that’s entering the lithium fray.
Saudi Arabia has decided it wants a seat at the global lithium mining table with a $2.6B deal to acquire a 10% stake in Vale SA’s base metals division. Vale plans to invest up to $30B on new projects in its home country of Brazil, as well as in Canada and Indonesia.
Initial investments will focus on minority equity positions in iron ore, copper, nickel, and, or course, lithium.
This is the first such deal for Saudi Arabia and it certainly won’t be the last. The country is planning to develop a $2B EV battery metals plant in partnership with EV Metals Group. Likewise, EVM Arabia is set to commence construction of a $905M battery chemicals complex in the Arab country later this year.
Lithium Demand: On the Rise
With global EV sales on a powerful uptrend that’s showing no signs of slowing down, escalating demand for lithium-ion batteries is going to require tons and tons of new lithium supply.
Because of its high-energy-per-unit-mass relative to other electrical energy storage systems, lithium is ideal for use in car batteries as well as in laptops, cell phones, and a host of consumer electronic devices.
Lithium-ion batteries have become the front-running rechargeable energy storage medium — particularly for the rapidly growing EV industry — creating a strong demand forecast for lithium.
There is also no current replacement for lithium.
New technologies that could potentially replace lithium-ion batteries are likely a minimum of a decade or two away. And lithium production from the recycling of old, end-of-life lithium-ion batteries represents little more than a drop in the bucket of what’s needed to satisfy growing demand.
And the global EV megatrend is being fueled by $Billions in investment not just by Tesla but by the world’s largest “traditional” automakers as well.
That includes billions of dollars in investment and innovation from the likes of Volkswagen, Stellantis, Mercedes, BMW, Toyota, Nissan, Hyundai, GM, and Ford — to name just a few.
In all, vehicle manufacturers and battery makers plan to invest US$860 billion globally by 2030 in the transition to EVs. Nearly a quarter, US$210 billion, is expected to be invested in the United States, more than in any other country.
President Biden has announced that the US is now aiming for HALF of all new vehicles sold by 2030 to be electric powered in an effort to fight climate change and to keep pace with Europe and China, who are surging ahead in terms of EV market share.
The United States currently stands at just 4.5% of new vehicles sold being electric — lagging behind both Europe and China, which stand at 16% and 14%, respectively.
Thus, the goal to reach 50% market share in the US by 2030 is a lofty one indeed… but one that US automakers are firmly behind.
That’s great news for global climate initiatives. Yet, because of surging demand in the EV space, experts are unsure whether enough lithium will be available to keep pace.
Lithium mines, as noted earlier, produce only around 130,000 tonnes worldwide per annum — a far cry from what’s needed even by today’s demand level.
And while the supply of lithium from mining is indeed increasing, it’s happening at a far slower rate than the rise in demand. That means an escalating supply gap is a near certainty going forward as millions of drivers make the switch to electric-powered cars and trucks.
Argentina: An Optimal Mining Address
There’s a lot of talk about Argentina potentially becoming the “Next Chile” in terms of global lithium production.
Mariano Machado, principal analyst for the Americas at Verisk Maplecroft, says, “Argentina has infinite untapped resources when it comes to mining. We’re talking about a new Chile, if not more, with the key ingredient being time.”
Remember, the Lithium Triangle of Chile, Argentina, and Bolivia holds more than HALF of the world’s known lithium reserves.
The region also produces about one-third of global lithium supply with Chile currently leading the way at 26% and Argentina still a ways behind (yet, with more than enough potential to catch up) at roughly 6%.
Another key reason why resource investors are so excited about the growth potential of Argentina is that it provides an alternative to Chile, which, in April 2023, made the surprise move to nationalize its lithium industry.
Argentina, on the other hand, has no such issues and remains pro-mining and pro-Western investment.
Lithium Brines: A Simple Mining Process
Lithium — aka, “the white petroleum” — is the lightest metal on Earth. And it’s not just EVs that are driving its demand.
Lithium-ion batteries power the lives of millions of people each day from the EVs and hybrids we drive to the laptops and cell phones we use to connect to an ever-connected world.
Lithium power has gained massive popularity in recent years due to its ultra-light weight, high energy density, and ability to recharge.
And although lithium is commonly mined from hard rock sources, the vast majority of the world’s lithium reserves are contained in brine formations such as what’s found in the Lithium Triangle.
In the Argentinean portion of the Lithium Triangle — where Argentina Lithium & Energy has its operations — mineral-rich brines are mined from vast salt flats or salars.
The lithium-rich brine is pumped to the surface and recovered using one or a combination of several methods including evaporation and chemical precipitation, ion exchange, solvent extraction, and membrane filtration. The end result is lithium materials suitable for use in batteries: lithium hydroxide and lithium carbonate.
And while it’s true that lithium is abundant on Earth — there’s even 180 billion tonnes of it in our oceans but at uneconomic grades by way of current technology — it’s becoming increasingly difficult to find large new deposits of high-quality lithium at high enough grades to be mined at a profit.
Elon Musk has called for investment into lithium production to ease shortages… saying those who seized the opportunity would be basically printing money.
With demand on the rise and supply uncertain, major automakers are racing to secure a stable supply of lithium to meet their growing needs.
And that, of course, includes Stellantis, which, as noted, has invested US$90M in equivalent Argentina pesos into LIT’s subsidiary to help the company advance its portfolio of lithium assets in Argentina’s Salta Province, including an offtake agreement for up to 15K tonnes of lithium per annum.
For more on the immense opportunity at hand, we turn to our own Gerardo Del Real who caught up with Argentina Lithium & Energy CEO Niko Cacos.
Exclusive Interview with
Argentina Lithium & Energy CEO Niko Cacos
Gerardo Del Real of Resource Stock Digest and Junior Resource Monthly sat down with Argentina Lithium president & CEO Niko Cacos for an in-depth discussion on all-things LIT, including the newly-inked agreement with Stellantis and the start of drilling at the flagship Rincon West Lithium Project in Salta Province, Argentina. Please enjoy!
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president & CEO of Argentina Lithium & Energy — Mr. Niko Cacos.
Niko, it's great to have you back on. Congratulations are in order, sir. You just pulled off a deal that's got a lot of people scratching their heads. So I wanted to have you on. First and foremost, before we get into the structure of the deal, congrats. A heck of a deal for shareholders.
Niko Cacos: Thank you very much, Gerardo. It really is a one-of-a-kind type of deal. I could say this is very transformative for Argentina Lithium and our shareholders.
Gerardo Del Real: Let me get right into it and play devil's advocate. How the heck do you pull off a deal where you're going to receive many multiples of your entire market cap in exchange for a percentage, 19.9%, of said company? How do you pull that off? Explain it to me.
Niko Cacos: The equivalent of US$90 million in Argentine pesos for 19.9% of the subsidiary of a company that had a market cap of between US$15 and US$20 million is indeed a remarkable feat from our vantage point. But you’ve got to always put your perspective over on the other side.
For Stellantis, what this means for them is their ability to reach down into the potential pipeline of lithium production and secure supply for the coming future. Their president quoted that there isn't enough lithium on planet Earth to satisfy all of the electric vehicles that need to be built to replace internal combustion engine cars.
With that mindset, and needing to secure a supply of lithium or else get out of the car business, this begins to make a lot of sense.
Gerardo Del Real: I have to believe that not only is this a security of supply issue for them but also a security of supply issue that they don't see going away anytime soon, right?
Niko Cacos: Absolutely. That's why the premium. They didn't do it with every junior lithium company either. They selected us. We operate in Argentina as Grosso Group management. We have a reputation there that precedes us. We have a track record of success there, and I think that was a very significant component in their decision making.
Gerardo Del Real: We've talked about the project in the past and the district-scale potential that's there. For those that are looking at the deal and going — ‘Wait a minute, what is Argentina Lithium? What is this project that has attracted this kind of investment? — can you give us an overview of the project?
Niko Cacos: Yes, we've got four properties in Argentina — all located within two provinces in northwestern Argentina — within the very prolific Lithium Triangle. The Lithium Triangle is where most of the world's lithium is situated.
Our projects, especially two of our projects, are situated next to very large and established lithium producers; Rio Tinto and Albemarle.
That proximity and our ability to acquire projects in these areas and begin drilling them out with the results that we’re getting, I believe Stellantis could extrapolate that these are going to be significant projects. They wanted to ensure that they had first rights on the lithium that comes out of there eventually.
Gerardo Del Real: What comes next, Niko?
Niko Cacos: We’ve actually already begun revising our exploration plans in that we're doubling up and tripling up on our drill rigs. I believe we're going to see our projects advance very, very quickly to the prefeasibility level.
We're funded now for the next three years at a minimum. It's at that point that we're going to make production decisions. This is a very, very exciting time for Argentina Lithium.
Gerardo Del Real: In terms of the offtake agreement, is there an agreed upon floor on the lithium price? We've seen a pullback in the spot price; not really the contract price as it relates to companies that are actually selling it in the market.
But China sometimes publishes and informs, I'll put it nicely, the lithium price action. It has definitely drifted downward here over the last little bit. Is there a floor that has been discussed in regard to that offtake agreement?
Niko Cacos: Yes, there is. It's a market-based offtake agreement. The idea isn't to supply lithium if the company can't make money… so that's not what's going to happen.
To further comment on that pullback on the price of lithium, I believe that when you're seeing transactions as aggressive as the one here with Stellantis, the organic demand for lithium is there, and I think we're going to see higher prices in the future, not lower.
Gerardo Del Real: I absolutely agree with you. Niko, congrats to you and the team. I know you've been working diligently behind the scenes for a long time to make this happen. I'm looking forward to having you back on. Thank you for the update.
Niko Cacos: Great. Thank you very much, Gerardo.
Vancouver-based Argentina Lithium & Energy Corp. (TSX-V: LIT)(OTC: PNXLF) is advancing its portfolio of four high-potential lithium exploration projects in the Argentinean portion of the prolific Lithium Triangle: Rincon West, Antofalla North, Pocitos, and Incahuasi.
As a member of the prestigious Grosso Group, a number of key catalysts are converging for LIT, including the start of drilling at the flagship Rincon West project along with the receipt of an environmental permit allowing for exploration of the contiguous Rinconcita II concession.
We covered the game-changing ARS$ equivalent US$90M Stellantis deal, and you heard directly from Argentina Lithium CEO, Niko Cacos, who said:
“We’ve actually already begun revising our exploration plans in that we're doubling up and tripling up on our drill rigs. I believe we're going to see our projects advance very, very quickly to the prefeasibility level. We're funded now for the next three years at a minimum. It's at that point that we're going to make production decisions. This is a very, very exciting time for Argentina Lithium.”
In other words, plenty of near-term catalysts ahead for LIT in a high-demand lithium market, including current and forthcoming drilling at multiple targets with which to potentially move the needle higher.
With an ARS$ equivalent US$90M investment from a global automaker and a market cap below C$50 million at the time of the production of this Special Report, Argentina Lithium is well-funded to carry out its near-term exploration objectives.
In other words, now is an ideal time to begin conducting your own due diligence on Argentina Lithium & Energy as it advances multiple lithium exploration projects in the Argentinean portion of the prolific Lithium Triangle.
A great place to start is the LIT corporate website where you can learn more about the properties and the team, view the most recent corporate presentation, and sign up to receive updates directly from the company’s IR department.
Also, click here for more of our ongoing coverage of Argentina Lithium, including additional late-breaking interviews with upper management as developments arise.
Argentina Lithium & Energy Corp. trades on the Toronto Venture Exchange under the symbol LIT and on the US OTC Bulletin Board Exchange under the symbol PNXLF.
For more information on Vancouver-based Argentina Lithium, be sure to contact the company’s IR department at 604-687-1828 or via email at firstname.lastname@example.org.
— Resource Stock Digest Research