Neo Lithium Corp (CVE:NLC) (OTCQX:NTTHF) (FRA:NE2) has hailed an updated resource estimate for its flagship 3Q project in Argentina, which confirmed the asset's scale, high-grade, and potential to grow, as the company continues to work towards finalizing the feasibility study in the third quarter this year.
The higher confidence measured and indicated (M&I) resource, at 1.682 million tonnes of lithium carbonate equivalent, has increased by 125% at the 800 miligram per litre (mg/l) lithium cut-off grade, compared to the previous 2018 estimate.
It has also lifted by 33%, to stand at 5.304 million tonnes, at the 400 mg/l lithium cut-off, compared to three years ago, the firm noted.
READ: Neo Lithium discovers new deep brine aquifer outside of the resource area on 3Q project in Argentina
The 3Q project lies in Catamarca Province and sits in a 28 kilometre (km) long salar that contains a high-grade resource in the northern third, roughly defined by the 800 mg/l cutoff grade. A medium-grade resource lies in the southern two-thirds of the salar, within the 400 mg/l cut-off.
This is significant because the high-grade resource requires smaller evaporation ponds to go into production. Ponds can represent up to 50% of the capital cost of an evaporative lithium brine project so a key design aim for 3Q is to minimize pond sizes.
"We are very pleased with these updated results, which highlight further upside at the 3Q Project. However, this development does not take away focus from our ongoing work toward the completion of the feasibility study in Q3," said Gabriel Pindar, chief operating officer (COO) of Neo Lithium in a statement. "These results emphasize the potential for further expansion, even beyond what we originally thought."
The new resource estimate was supervised by Canadian-based Groundwater Insight Inc, which is independent from Neo Lithium and was based on four drilling and sampling campaigns.
The increased resources in the high-grade zone is due to the discovery of high-grade brine at depth and to the east and outside the previous estimate, thus Neo Lithium said it will continue the drilling campaign in the high-grade mineral resource next season, starting in September 2021.
This upcoming drilling campaign will not delay its work to initiate pond construction in the coming austral summer, the company added.
Neo Lithium is working with engineering giant Worley on the feasibility study for the 3Q project and it said this current larger mineral resource estimate is not expected to negatively impact the new reserve estimate and mine plan to be delivered as part of the feasibility study.
A new reserve estimate will be issued along with the feasibility study, to be completed by Worley at the end of Q3 or the beginning of Q4, 2021, the company said.
Neo Lithium also noted that it had now reached 20% of its future permanent staff, in full compliance with its Environmental, Social and Governance (ESG) goals.
Shares in Canada added nearly 10% to C$3.12 on the day.
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Contact the author at giles@proactiveinvestors.com