VANCOUVER (miningweekly.com) – Chile-focused lithium junior Lithium Chile has revamped itself to better align its corporate image with its aspiration of becoming a go-to lithium producer in the country – the world’s largest and lowest-cost producer of the energy metal.
Based in Vancouver, Lithium Chile shareholders voted in December to change the company’s name from Kairos Capital and to examine the potential to spin out the company’s latent copper/gold asset portfolio into a standalone entity.
“We’ve got the goods,” president and CEO Steven Cochrane told Mining Weekly Online in a recent interview.
He was, off course, referring to the company’s significant portfolio of lithium assets in Chile. The junior has amassed one of the largest exploration portfolios in prospective and mining-friendly Chile, consisting of 134 200 ha spread over fifteen salars, or salt flats.
The properties include 56 km2 on the Salar de Atacama – host to the world's highest concentration lithium brine production plants and currently the source of about 30% of the world's lithium output.
Sampling conducted by Lithium Chile to date has yielded lithium assay results from surface and near-surface brines of up to 1 410 mg/ℓ, 1 330 mg/ℓ and 1 280 mg/ℓ on three of its 15 properties – concentrations that are comparable with the production grades from the Salar de Atacama, Cochrane advised.
Top lithium producers Sociedad Quimica Y Minera (SQM) and US-based Albemarle have significant production facilities in the region. In 2016, Chile produced about 76 000 t of lithium carbonate equivalent.
“We have a short runway to results, as we work towards establishing a compliant resource estimate at our most advanced assets by the second quarter,” Cochrane stated. “Exploration is under way and will culminate with drilling – we have five shots at hitting commercial grades.”
The company’s top projects comprise Salar de Coipasa, Salar de Helados, Salar de Turi and Salar de Talar.
Cochrane underlined the suitability of Chile as a lithium mining destination, boasting low precipitation and high evaporation rates, which give the jurisdiction a world-leading lithium production advantage. Combined with about 53% of the known global lithium reserves, production costs are expected to be among the lowest at about $1 600/t, compared with Australia’s hard rock production that averages at about $5 000/t.
With insiders holding close to 55% of the company following a recent private placement that raised C$3.5-million, Cochrane is looking towards near-term catalysts that will help boost the company’s valuation, which is below par when compared with its peers, and considering the results to date on some of the most prospective salars in the Lithium Triangle – the world’s most prolific lithium producing region locked between Chile, Argentina and Bolivia.
Prospecting, to date, has pointed to strong potential for high-grade lithium brines, with low to moderate lithium/magnesium ratios ranging between 2.6 and 7.8.
Cochrane pointed out that the exploration team is led by veteran geologist Terry Walker, who had spent the last 26 years of his 40-years-plus career focused on the Chilean mining sector.
Rapid development of rechargeable batteries led the mobile phone revolution, followed by the smartphone and tablet industry. With minimal development, batteries are now fuelling the emerging electric vehicle (EV) industry and will allow energy storage technology to revolutionise power generation and distribution, Cochrane said.
Further, rumour has it that Tesla founder Elon Musk is also looking towards Chile to secure upstream sources of lithium for his megafactories and his fast-growing EV manufacturing business.
“We have several entities engaging with the company at the moment looking at forming partnerships. While we continue to work towards a compliant resource estimate, we want to form joint ventures with major funding partners. There’s been some serious tire kicking going on,” he said.
The Chilean mining sector also received a boost recently with the election of centre-right-leaning Sebastian Pinera as the country's President, which Cochrane considers to be a very positive change for the mining industry. According to Cochrane, Chile has one of the world’s most streamlined mining codes, facilitating low-cost acquisition and rapid exploration.
Meanwhile, Cochrane advised that Kairos also owns a significant copper/gold/silver property portfolio consisting of 266 km2 over six different properties in Chile.
“As we also have an exciting copper/gold property portfolio, the board has approved exploring the potential spin out of those copper/gold assets into a separate company, delivering the best value for our shareholders. It is the board's and management's opinion that these distinct and highly prospective property portfolios in copper and gold on the one hand, and lithium on the other, would be better exploited in their own distinct vehicles with their own distinct and focused management teams,” Cochrane stated.
Under Kairos, the team has been conducting preliminary exploration work on these assets, which included surface sampling, geological mapping, geochemistry and induced polarisation geophysical surveys, as well as recent drilling on one of the properties. He said the company will advise in due course if, when and how the spinout will occur.