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. With a solid maiden resource, an expansion drill program is underway to increase the resource size. Process test work and permitting work are also ongoing.

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 to a full Feasibility Study for the HMN Li Project. The Company currently has approximately 95 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 on the Alba Sabrina claim, the largest claim block.

Alba Sabrina claim mapThe Alba Sabrina (2,089 hectares) claim block is the largest block in the package and has never been drill tested.  A 2000 meter drill program is underway to potentially expand the current Lithium Carbonate Resource. The drill program consists of seven drill holes (one per pad) located north to south across the project area for 6.5 kilometers. Results to date are:

AS01 hole – 300 meters lithium average 722 mg/L Li
AS02 hole – 410 meters, assays pending
AS03 hole – 260 meters, lithium average 751 mg/L Li
AS04 hole – 270 meters, lithium average 745 mg/L Li
AS05 hole – 260 meters, complete, assays pending
AS06 hole – results pending
AS07 hole – drilling currently underway

The objective of the drill program is to potentially expand the current Lithium Carbonate Resource which is defined with an average grade of 756 mg/L lithium within 571,000 tons in the Measured and Indicated Categories (See news release December 4, 2018, and NI 43-101 compliant Technical Report titled, Initial Measured and Indicated Lithium and Potassium Resource Estimate, Hombre Muerto North Project, Salta and Catamarca Provinces, Argentina, prepared by independent consultants Montgomery and Associates of Santiago, Chile).

Lithium South Drill Map – revised drill targets for resource expansion.Company President Adrian F. C. Hobkirk is quoted, “The ongoing exploration is returning consistently excellent results. Holes located to the west of the claim area are delineating the Alba Sabrina salar channel to be wider than expected, which could positively impact the expansion of the total resource at the Hombre Muerto North Lithium Project.”

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.

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

  • Lithium South – 100% owned
  • Tramo Claim – 2018 two pumping wells, drilled and cased
  • 2022 Drill Program – potential to expand resource to 2 MT Lithium Carbonate Equivalent (LCE)
  • 2019 Maiden Resource Estimate – defined resource of .57 MT Lithium Carbonate Equivalent (measured & indicated)
  • High Quality, Low Impurities Brine – >750 mg/L Li, low Mg/Li ratio 2.6:1
  • Infrastructure – excellent access, with gas and water sources
  • Highly qualified, Argentina-based team of professionals experienced with lithium exploration, development, through to lithium production.
  • Project Budget – fully funded to undertake Feasibility Study
  • Surrounded by POSCO $US 4Billion lithium plant in operation

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 43-101 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

Traditional Lithium Extraction
Proven Evaporation Technology for Lithium Recovery

Lithium South’s evaporation technology potentially cuts capital and operating costs, accelerates pilot plant startup and provides efficient lithium recovery and production time.

Solar Evaporation Advantage

  1. Brine Resource – High Li Grade – 747 ppm. Concentration ideal for evaporation
  2. Lithium Process Test Work – Current evaporation test work to produce battery grade LCE
  3. Lithium Recoveries – Anticipated ~ 60 % / subject to QP certification
  4. Weather Susceptibility – Good weather and zero energy costs to use evaporation
  5. Resources – Water source and gas pipeline at property
  6. Environmental – Environmental permitting nearing completion

HMN Lithium Project Videos

Proven Evaporation Technology for Lithium Recovery

Traditional Evaporation Advantage

  1. Brine Resource – High Li Grade – 747 ppm. Concentration ideal for evaporation
  2. Lithium Process Test Work – Current evaporation test work to produce battery grade LCE
  3. Lithium Recoveries – Anticipated ~ 60 % / subject to QP certification
  4. Weather Susceptibility – Good weather and zero energy costs to use evaporation
  5. Resources – Water source and gas pipeline at property
  6. Environmental – Environmental permitting nearing completion
Proven Evaporation Technology for Lithium Recovery

Lithium South will employ proven evaporation technology

CEO Statement

“Our 2022 resource expansion drill program is returning excellent lithium results. We look forward to completion of the program and the calculation of a new Lithium Carbonate Equivalent resource.”

Adrian Hobkirk, President & CEO of Lithium South