Pan Asia Metals adds prospective Chilean lithium asset to critical metals portfolio

Pan Asia Metals (ASX: PAM) has taken advantage of what it says is a market over-reaction to add a highly prospective Chilean lithium asset to its critical minerals portfolio.

Best known for its significant South East Asian developments, Pan Asia has entered into binding memorandums of understanding (MOUs) to investigate a number of lithium projects situated in the Tarapaca and Antofagasta regions of the Atacama Desert in northern Chile.

Home to some of the richest lithium containing areas in the world, the reputation of Chile’s mining sector has been impacted recently by some controversial political commentary.

While some explorers have started to pull back from country, Pan Asia says this has provided it with a unique opportunity.

Chilean lithium politics

According to Pan Asia, much of the recent commentary about Chilean lithium policy is ill-informed and has helped create an exploration application void for companies like itself to take the advantage of.

The company’s management told shareholders that with very little competition now in place, junior explorers are able to secure very high-quality projects in a highly contested region.

“If anything, the Chilean policy developments with regard to lithium have only been positive,” said managing director Paul Lock.

“In Pan Asia’s view, the general over-reaction in the market to the Chilean Government’s statements has created a fantastic opportunity for PAM’s shareholders.

“From a strategic perspective, the Tama-Atacama Lithium Project has its roots in PAM’s realisation some time ago that the EV trend is real and there will be a material increase in demand for lithium chemical products. As a result, Pan Asia has secured very high-quality lithium exploration properties in Chile.”

Large new projects

Collectively known as the Tama-Atacama lithium project, the areas to be assessed are divided into six main areas and extend over 290km from north to south and encompass approximately 1400 sq. km of exploration concession applications and granted exploration concessions.

Previous studies carried out in the project area have identified strong potential for lithium brine and lithium in clay deposits hosted in the Pampa del Tamarugal basin in the northern part of the Atacama Desert.

Apart from its lithium prospectivity, the project also benefits from its proximity to excellent infrastructure including the Pan Americana 5 highway, water (salt and fresh), solar power, nearby ports, airports and major logistics hubs.

Many hours of research

“The Tama-Atacama lithium project is the result of many, many hours of research and enquiry. The project comes with an agreement with Jacob Rebek to be PAM’s geological advisor for Chile and Thomas Eggers to be Pan Asia’s consulting country manager for Chile. This was an important step to ensure that Pan Asia is well represented and informed, and to ensure the project progresses speedily,” Mr Lock said.

He said the decision to add the South American assets to its South East Asian portfolio came after a review of the company’s future direction.

“When we look at the global peer group, we see many lithium exploration projects underway, but we also see that many of these will be high cost, which is being demonstrated in actual operating results.”

“As a result of the success of Pan Asia’s midstream lithium chemical strategy to date, we are seeing a need for supply certainty in the medium to long term. Supply certainty is front of mind for Pan Asia’s partners and our projects in South East Asia can only supply so much feedstock – albeit it will be low cost.”

With that in mind, Mr Lock said Pan Asia elected to embark on a strategy to secure strategic assets which present potential for longer term, higher volume, low cost supply.

“The beauty of Pan Asia’s Tama-Atacama Lithium Project, which in some respects is absolutely unique, is that it has all the hallmarks of a well situated, low-cost project, i.e. all infrastructure is immediately available, the project is located in close proximity to large population centres with large port facilities, a commercial airport, a workforce, and a large water supply – being the ocean.”

“Further, the Tama-Atacama Lithium Project is an all-season project. All three salars we inhabit, being Salar Dolores, Pintados and Belavista, are at much lower elevations than any other lithium rich salars in the global lithium peer group.”

Mr Lock said this means Pan Asia’s new projects are ideally located for improved evaporation and water replacement operations, with a strong opportunity to introduce photovoltaics should DLE technologies start to prove economic, helping to create a low carbon footprint.

“All in all, the Tama-Atacama lithium project positions Pan Asia very well to create a large long-term, low-cost supply of lithium which is complimentary to Pan Asia’s midstream lithium chemical processing aspirations in South East Asia and, with the right lithium chemical processing partners, also in Chile.”