After completing due diligence, Argosy Minerals (ASX: AGY) will proceed with its Mina Tincal tenement acquisition which will boost the company’s lithium brine project area in Argentina’s Salta Province to 2,572.9 hectares.
Under an earlier agreement, Argosy had until 22 November 2017 to complete due diligence at the tenement and would then make the decision on whether or not to proceed.
Argosy will pay an US$400,000 option fee to the vendor Colorado SA by Monday 27 November. This will give the company a further six-month period to finalise the acquisition via a final US$400,000 payment.
“This strategic and highly prospective acquisition further confirms Argosy’s intent, ambition, and increasing scale to continue our aggressive development strategy to fast-track toward production of lithium carbonate equivalent product,” Argosy managing director Jerko Zuvela said.
The Mina Tincal tenement comprises 196 hectares and adjoins the northern region of Argosy’s flagship Rincon lithium brine project, which is under development.
The agreement with Colorado also includes a 31-hectare mining easement right at the nearby Olacapto industrial site, which has access to infrastructure such as natural gas, electricity, rail and pre-existing approvals for drilling water.
Argosy plans to build its stage two pilot plant at the site.
Because Mina Tincal adjoins Rincon’s northern tenements, it streamlines the Rincon and Mina Tincal tenements into one collective group and allows Argosy to apply for mining group status when submitting regulatory applications, making the process more efficient and prevents potential land gaps that may not have been otherwise covered during the approval process.
First move off the rank in the Mina Tincal acquisition will involve Argosy gaining necessary regulatory permits for future expansion and development.
This latest update, comes less than a week after Argosy reported it had intersected lithium averaging between 400 milligrams per litre and close to 500mg/l from exploration at Rincon.
Meanwhile, stage two construction at Rincon is on track to produce the company’s first battery grade lithium carbonate equivalent from its 500-tonne per annum pilot plant by the end of March 2018.
More than 11 hectares of evaporation ponds are due for completion by the end of this month, with three production wells underway for pumping lithium brine into the ponds.
Upon completion of stage two works, Argosy’s stake in Rincon will increase to 77.5%. Full scale production is planned under stage three development, which will boost Argosy’s interest in Rincon to 90%.