TORONTO (miningweekly.com) – Lithium Americas' Cauchari-Olaroz project in Argentina is set to benefit from recent increases in lithium demand and prices, CEO Waldo Perez said on Monday.

The company is on track to complete a feasibility study on building a mine on what it says is the third-biggest lithium brine deposit globally by the end of the first quarter.

A preliminary economic assessment the company concluded on Cauchari-Olaroz earlier this year gave it a net-present value of $715-million at an 8% discount, and pegged production costs at around $1 500/t, while the lithium price hovered near $5 500/t.

TSX-listed Lithium Americas hopes to build a 40 000-t/y lithium carbonate operation at Cauchari-Olaroz, for a total capital cost of $400-million, with the first phase due to start producing in 2014.

“With current industry producers recently increasing lithium carbonate prices by 20%, Cauchari-Olaroz is expected to continue benefiting from significant forecast increases in lithium demand over the foreseeable future,” Perez said.

Reporting its financial results for the three months ended May 31, Lithium Americas said it had $22.4-million in cash and cash equivalents at the close of that period.

Canadian automotive firm Magna and Japanese conglomerate Mitsubishi jointly own about 17% of Lithium Americas, and have offtake rights for 37% of Cauchari-Olaroz’s intended production.