TSX-V: LIS | OTCQB: LISMF | Frankfurt: OGPQ

Hombre Muerto North Project

Hombre Muerto North Lithium Project
Salta, Argentina

Lithium South is focused on the development of its flagship lithium brine project, Hombre Muerto North Lithium Project (HMN Li Project) in the Salta province of Argentina.

The property package of 5,687 hectares is comprised of nine mining concessions. The project is strategically located with developed infrastructure.

The HMN Li Project is surrounded by two leading lithium producers, Korean giant POSCO and Livent at the northern end of the renowned Hombre Muerto Salar.

Hombre Muerto North Project

Lithium South is moving forward with the evaluation and development of alternative Lithium extraction technology. The Company currently has approximately 93 million shares issued and outstanding, and trades on the TSX Venture Exchange under the symbol LIS, on the OTCQB Market under the symbol, LISMF, and on the Frankfurt Stock Exchange under the symbol, OGPQ.

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Lithium South Salar Overview Map
Lithium South Project Claims Map
Lithium South HMN Li Project next two leading lithium producers.

The HMN Li Project has 9 separate claims – Tramo, Alba Sabrina, Natalia Maria, Gaston Enrique, Via Monte, and Norma Edith are located on the salar. The Sophia I, II and III claims are located north of the salar claim blocks and were acquired for potential plant location and water sourcing.  To date only the Tramo block has been explored and and contains the  current resource estimate and the subject of the  PEA. With only 14% of the property explored, there is significant resource expansion potential.  Lithium South is currently working to expand the resource following surprise TEM study results.  These will be used to determine drill locations for the next drilling phase, followed by a potential resource upgrade.

Lithium South is developing direct lithium extraction (DLE) technology in parallel with proven evaporation technology to determine the best processing path forward for their HMN LI project.  Eon Minerals of Miami Florida, through its laboratory located in Salta, Argentina, is conducting test work to produce ‘battery grade lithium carbonate’ from a bulk sample of brine. Chemphys Chengdu located in Sicheun, China are also testing a brine bulk sample witheir extraction technology, as are Lilac Solutions of Oakland, California.

An environmental baseline study is also underway which will lead into the Environmental Impact Report thereafter.

Tramo claim mapThe Tramo (383 hectares) claim block is the most advanced and is the subject of both a resource calculation and Preliminary Economic Assessment in 2019, utilizing conventional evaporation extraction. 

The property is adjacent to land under development by the Korean multinational corporation POSCO, which acquired the ground from Galaxy Resources Ltd. for US $280 million. POSCO (Korea) has a lithium factory under construction when complete in 2024, it is expected to have a production capacity of 25,000 tonnes of lithium hydroxide per year, enough to power the batteries of 600,000 electric vehicles.

Alba Sabrina claim mapThe Alba Sabrina (2,089 hectares) claim block is the largest block in the package and has never been drill tested.  Road and pad construction is now complete (February 2022) and a 2000 Meter drill program is staged to commence to provide access to the three well locations.

The three pads constructed on the Alba Sabrina claim block are approximately 2.5 kilometers apart across the project area, north to south. The drill program consists of three drill holes, one per pad. A drill contract is expected to be announced in the coming days.

Company Vice President Fernando Villarroel is quoted, “We are very excited to be moving the project forward for the potential expansion of the current resource.  The Alba Sabrina block is the largest in the package and represents an excellent drill target.”

Sophia claim mapThe Sophia I, II and III non-contiguous claim blocks (2,400 hectares) are located approximately 5 kilometers north of the Alba Sabrina claim. The areas will provide a potential water source and a location for anticipated future plant and processing facilities. This will eliminate the need for the Company to locate any future development on current salar locations.

Other HMN claim mapsLithium South is planning to potentially expand it’s known resource by drilling various areas of interest identified in a recent Time Domain Electromagnetic (TEM) program survey at the Hombre Muerto North Lithium Project, Salta Province, Argentina.

  1. Natalia Maria (115 hectares) TEM results indicate a porous aquifer towards the west of the property, reaching 100 meters of depth. Basement rock may have been encountered towards the east but may also represent a halite zone, without the basement being identified.
  2. Via Monte and Norma Edith (595 hectares) interpretation of sections indicates a porous aquifer towards the west of the property, reaching a thickness of approximately 200 meters. The basin appears to be deepening towards the west, where the claim block is adjacent to property held by Livent, an established lithium producer and production facility.
  3. Gaston Enrique (55 hectares) TEM interpretation indicates halite with some lenses of a potentially more porous aquifer. The brine target is interpreted to be at least to 300 meters, though the basement was not identified in this section.

Project Overview

  • Test work is underway for Direct Lithium Extraction (DLE) – an alternative to the conventional evaporation process which potentially will shorten lithium extraction time and provide higher recovery of lithium.
  • PEA, using traditional evaporation, indicates attractive economics for a 5,000 tonne/year LCE operation with a CAPEX of $93.3M, OPEX of $3,112/t LCE, NPV(8) of $217M and IRR of 28.0%.
  • Exceptional Li Samples; 300 – 400 meter average 918 mg/l Li with a low Mg to Li ratio.
  • Excellent Pump Test Results – 26 liters per second of lithium brine in 72-hours.
  • Geophysical data indicates zones of low resistivity, interpreted to be potential lithium-bearing zones that are open at depth.
  • Surrounded by POSCO $US 840 Million lithium plant operation in development.
  • Highly qualified, Argentina-based team of professionals experienced with lithium exploration, development, through to lithium production.

Work Completed
Two production wells drilled and cased

Resource Estimate

Resource Category Brine Volume (1000 m3 Li Grade (mg/liter) Li (Tonnes) Li2CO3 Equivalent (Tonnes) K Grade (mg/liter) K (Tonnes) KCI Equivalent (Tonnes)
Measured 119,862 797 96,000 509,000 7,039 844,000 1,609,000
Indicated 21,936 534 12,000 62,000 5,517 121,000 231,000
M+1 141,798 756 107,000 571,000 6,804 965,000 1,840,000

Completed PEA Report
Prepared under NI-101 shows highly positive results

The HMN Li Project 2019 PEA (done when NRG Metals) (based only on the Tramo tenements of 383 hectares) resulted in an after-tax NPV8% of US$217m and 28% IRR, based on 5,000tpa lithium carbonate production over a 30 year mine life.  Initial CapEx was estimated at US$93.3m and OpEx at US$3,112/t lithium carbonate.  The PEA was based on a project price assumption of US$12,420/t.  A Feasibility Study on the project is in progress which will include upgrading the current resource to a reserve status.

Preliminary Economic Assessment Highlights

After-tax Net Present Value (NPV) 8% discount rate $217 Million
After-tax Internal Rate of Return (IRR) 28.0%
CAPEX Capital Expenditures $93.3 Million
OPEX Cash Operating Costs (per metric tonne of lithium carbonate) $3,112
Average Annual Production (lithium corbonate) 5,000
Mine Life 30 Years
Payback Period (from commencement of production) 2 Years 5 Months

Innovative Lithium Extraction
Leadership in the application of DLE technology at the project level

LIS is evaluating Direct Lithium Extraction (DLE) from three different sources. Chemphys is developing their process in Chengdu China using an absorbent. Eon Minerals, located in Salta, Argentina, is also developing a process using their patent pending absorbent. Finally Lilac Solutions of Oakland CA is developing an ion exchange process for rapid lithium extraction. All three will be testing their technology on a bulk sample of HMN Li Project brine. The technology with the best result will move forward to the pilot plant stage.

The intention of DLE is to:

  1. Reduce production time from months to hours
  2. Increase the recovery from 42% using traditional extraction, to over 80%
  3. Eliminate the need for large evaporation ponds
  4. Reduce the environmental footprint of any future production facility
  5. All results and testwork supervised on behalf of LIS by Dr. Vijay Medtha, a world recognized lithium extraction expert and Qualified Person

HMN Lithium Project Videos

CEO Statement

“I personally feel very optimistic that DLE’s efficiencies will replace conventional Lithium extraction methods which are slow as they’re dependent upon extracting lithium from ponds via a solar evaporation process.”

Adrian Hobkirk, President & CEO of Lithium South