TORONTO (miningweekly.com) – Global resource investment company and merchant bank Aberdeen International has acquired the Diablillos lithium/potash project in Argentina, marking its second significant investment in 2015.

Under terms of the deal to acquire all the outstanding shares of Potasio y Litio de Argentina, Aberdeen paid parent firm Rodinia Lithium C$3-million on closing, and would pay another C$2-million within six months.

Resource investment firms had been racing in 2015 to secure the mining rights to lithium projects as demand was expected to grow significantly in the wake of increasing technological applications of lithium-derived batteries.

Rodinia would also retain a 2% net smelter royalty on the project, while Aberdeen would have the right to buy half of this royalty for C$2-million within two years of the deal closing.

“While historical studies have suggested Diablillos will have very low costs and a high return in the current lithium price environment, perhaps more importantly, the project is scalable. This will allow Aberdeen to ‘right-size’ the project based on the availability of capital,” Aberdeen president and CEO David Stein commented.

He noted that Aberdeen was reviewing options to get into production more quickly than previously expected with a larger project.

The Diablillos lithium/potash brine project covered more than 95% of the Salar de Diablillos located in Salta, Argentina, at an average elevation of approximately 4 050 m above sea level, and comprised 32 mining claims covering about 8 156 ha.

To date, more than C$19-million had been spent on the project, including extensive exploration and definition drilling, pump tests, seismic and gravity geophysical surveys, basin and solute transport models; all of which collectively account for the bulk of work towards an updated pre-feasibility or feasibility study on the project which is still to be completed.

The latest resource statement (dated December 22, 2011) contained a recoverable inferred brine resource of 2.8-million tonnes lithium carbonate equivalent from an in-situ inferred brine resource of 4.9-million tonnes lithium carbonate equivalent. The project also contained a recoverable inferred brine resource of 11.2-million tonnes potassium chloride equivalent from an in-situ inferred brine resource of 19.83-million tonnes potassium chloride equivalent.

A preliminary economic assessment (PEA) for the project was completed by SRK Consulting in December 2011, which outlined an operation producing 15 000 tonnes lithium carbonate per year and about 51 000 t of potash per year, projecting a pre‐tax internal rate of return (IRR) of 34% and a $561-million pre‐tax net present value (NPV) at an 8% discount rate.

The PEA also outlined Rodinia's available option to increase output to 25 000 t lithium carbonate and 85 000 t/y of potash. This increased production scenario generated a much higher pre‐tax NPV estimate of $964-million, along with a pre‐tax IRR of 36%.