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Lithium South’s Strategic Advances: A Milestone Well Completion and Promising Economic Assessment Amidst Argentina’s Lithium M&A Surge

Lithium South Development Corporation, a key developer in the Argentine lithium sector, has recently announced two significant achievements that underscore its commitment to advancing the lithium industry in Argentina. These developments not only highlight the company’s technical capabilities but also its strategic positioning in the highly competitive lithium market.

Completion of a 400-Meter Pumping Well at Alba Sabrina

On March 14, 2024, Lithium South Development Corporation proudly announced the completion of its first pumping well at the Alba Sabrina claim block, part of the Hombre Muerto North Lithium Project in Salta Province, Argentina. This well, reaching a depth of 400 meters, encountered sand layers as the dominant texture, which is crucial for lithium brine extraction. The well has been equipped with a high-capacity pump, capable of extracting brine at a rate of 40 to 50 liters per second, indicating the potential for substantial brine production throughput.

The completion of this well is a testament to Lithium South’s commitment to advancing its project from exploration to development. The technical team, leveraging state-of-the-art downhole geophysics provided by Zelandez, has gained valuable insights into the well’s potential, with total porosity averaging 21% and specific yield throughout the profile averaging 7%. This development not only enhances the project’s infrastructure but also solidifies the company’s footprint in the lithium-rich region of Salta Province.

Preliminary Economic Assessment (PEA) Estimate

Lithium South further bolstered its market position with the announcement of a positive Preliminary Economic Assessment (PEA) for its Hombre Muerto North Lithium Project. The PEA, prepared by Knight Piésold Consulting and JDS Energy and Mining, outlines an after-tax Net Present Value (NPV) of US$934 million with an impressive Internal Rate of Return (IRR) of 31.6% and a payback period of just 2.5 years. Based on a mine life of 25 years and a production rate of 15,600 tonnes of lithium carbonate per year, the PEA highlights the project’s robust economics and its potential to become a significant player in the global lithium market.

The PEA is based on proven solar evaporation technology for processing, indicating a streamlined and efficient approach to lithium carbonate production. This assessment underscores the project’s viability and the attractive economic returns it offers to investors and stakeholders.

Mergers and Acquisitions (M&A) in Argentina

The lithium sector in Argentina is witnessing a flurry of M&A activities, reflecting the country’s growing importance in the global lithium supply chain. Recent transactions include the sale of Millennial to Lithium Americas for US$400 million, Neo Lithium to Zijin Mining for CAD$960 million, Rincon Mining to Rio Tinto for US$825 million, Lithea Inc. to Ganfeng for US$962 million, Galaxy to Posco for US$280 million, and Arena Minerals to Lithium Americas for US$227 million. These deals highlight the hot M&A market in Argentina and underscore the strategic value of lithium resources in the country.

Lithium South Development Corporation’s recent achievements and the vibrant M&A landscape in Argentina reflect the dynamic nature of the lithium sector. As the company transitions from exploration to development, its strategic initiatives are set to enhance its position in the global lithium market, contributing to the sustainable development of lithium resources in Argentina.

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