Argentina Lithium & Energy Corp (TSX-V:LIT, OTCQX:LILIF) has announced a non-binding agreement with China-based Xi’an Lanshen New Material Technology to advance development of its Rincon West lithium brine project in Argentina’s Salta Province.
The agreement, described as a Heads of Terms and Framework Agreement, outlines a staged approach to technical development, financing, and potential commercial production at the project.
It builds on a prior memorandum of understanding between the two companies signed in December 2025 and replaces that earlier arrangement.
Under the proposed terms, Lanshen could earn up to a 30% equity interest in Argentina Lithium’s local subsidiary, Argentina Litio y Energia S.A. (ALESA), through contributions totaling up to approximately US$100 million. The investment would be made in phases tied to project milestones.
The framework sets out three stages of development. The first stage focuses on pilot-scale testing of direct lithium extraction (DLE) technology, along with process validation and engineering work to support a pre-feasibility study. The second stage would involve more advanced engineering, environmental and permitting support, and preparation of feasibility studies.
The third stage, which represents the largest portion of the proposed investment, would involve construction and commissioning of a commercial-scale lithium processing facility.
Lanshen is expected to contribute approximately US$95.9 million in engineering, procurement, and supply services for a plant designed to produce 5,000 tonnes per year of battery-grade lithium carbonate. This would include equipment fabrication, delivery, on-site assembly support, commissioning, and operator training.
Progression to the final stage is subject to several conditions, including completion of resource estimates, environmental approvals, permitting, financing, and regulatory clearances in both Canada and China. Additional approvals from third parties, including existing partner Stellantis, would also be required.
"This framework agreement represents a major step forward with respect to the potential development of Rincon West and a clear transition from early-stage collaboration toward negotiation of definitive agreements containing a clearly defined technical and investment framework,” Argentina Lithium CEO Nikolaos Cacos said in a statement.
“By structuring up to US$100 million in staged contributions tied to key development milestones, we have the opportunity to significantly advance the project while managing capital risk.”
Zhijun Feng, Lanshen president, added: “The agreement establishes a clear pathway to deploy our DLE technology across pilot, engineering, and commercial stages, and we look forward to advancing Rincon West through feasibility and into production."
Argentina Lithium stated that the agreement is non-binding, except for standard provisions such as confidentiality, and that there is no guarantee a definitive agreement or transaction will be completed.
The Rincon West project hosts an estimated 238,000 tonnes of lithium carbonate equivalent in measured and indicated resources, along with 64,000 tonnes in inferred resources, according to a technical report filed in December 2025. The project is located near other lithium developments in Argentina’s so-called Lithium Triangle, a region known for significant brine-based lithium resources.
Shares of Argentina Lithium opened 16% higher in Canada at C$0.15 on Tuesday morning.