BMG Resources powers ahead with exploration after formalising lithium brine joint venture in Chile

BMG Resources (ASX: BMG) is powering ahead with advancing its lithium brine assets in South America’s Lithium Triangle after its joint venture was formalised today.

In August last year, BMG inked a contract with the owners of Lithium Chile Spa to carry out exploration and development of three lithium brine assets in Chile.

The joint venture covers 20,000 hectares and spans three claims in the Salar de Atacama, Salar de Pajonales and Salar de Tuyajto – Natalie.

Under the joint venture, BMG will pay US$3.5 million to secure a 50% stake in the assets.

Payments will be staggered and include cash and shares upon reaching specific milestones, with BMG to pay its US$250,000 allocation upon transfer of the tenements.

Next steps at Salar de Atacama – Salar West

Speaking with Small Caps BMG managing director Bruce McCracken said in the lead up to the joint venture being formalised, BMG had already begun ground work at the Chilean assets, with the Salar de Atacama – Salar West claims the company’s priority.

Mr McCracken said the company planned to push on as fast as it could to complete the initial work program at Salar de Atacama, with maiden drilling to commence within the next month.

“Geophysic surveys completed during due diligence identified a consistent strongly conductive unit on the southern properties, so we look forward to drilling this area with the support of our JV partners to gain a closer understanding of the scope of potential lithium resources.”

During the next 12 months, BMG plans to establish lithium JORC resources within the project areas to fast-track the development of a lithium brine operation.

To fund initial exploration, BMG will utilise recent capital raised which exceeded $1.6m.

Why lithium brine?

Commenting on the joint venture, Mr McCracken said the company had been in search of a new opportunity for some time.

“As a board, we identified battery minerals as being a prospective and interesting commodity area to focus on with the advent of electric vehicle growth and home batteries and so forth.”

“If you look at the forecasts for electric vehicles, the growth will be very strong in the next 10 years, particularly in China and a number of European economies.”

Mr McCracken pointed out the batteries that power electric vehicles require lithium, which is difficult to substitute because of where it sits on the periodic table.

“It’s a very light metal and the properties are such that it is perfect for battery composition.”

When the opportunity to snap up a package of lithium brine assets in Chile presented itself to BMG, the company didn’t hold back.

“We saw this as a great opportunity to reposition the company.”

Mr McCracken explained there were plentiful lithium brines in South America’s Lithium Triangle.

“In the right place, it is extremely low cost and there are advantages in terms of development.”

“You can bring a lithium brine operation online pretty quickly and the exploration process and costs are also favourable,” Mr McCracken explained.

“It’s in an excellent area with a very good partner.”

According to BMG, the Salar de Atacama is the world’s largest and purest active lithium source – hosting 27% of the globe’s lithium reserves.

BMG will be in good company at Atacama with SQM’s holding assets adjacent to BMG’s Salar West claims.

Additionally, Albemarle is actively producing nearby – generating 60,000 tonnes per annum of lithium carbonate from its lease.

Treasure copper-gold-zinc-silver project

In addition to the new Chilean assets, BMG has a 30% free-carried interest in the Treasure copper-gold-zinc-silver project tin Cypress.

Treasure encompasses 36.7 square kilometres and includes 10 licences.

Nine advanced copper, gold, zinc and silver prospects have been identified across the licences. A further 11 prospects show evidence of exposed mineralisation that appears similar to the nine.

The project operator New Cypress is preparing to begin a further exploration program that will bring its interest up to 90%.

New Cypress can then acquire the remaining 10% by either paying BMG $2 million within 12 months of obtaining its 90% stake or shell out a 1% net smelter royalty until BMG has received $2 million.

If the second option is taken, BMG will also receive a 10% share of any profits generated during that period.