Argentina Lithium & Energy Corp (TSX-V:LIT, OTCQB:PNXLF) said it has won the public tender to purchase 100% interest of the Rinconcita II mining concession area located on the Salar de Rincon in Salta Province, Argentina from provincially-owned Recursos Energeticos y Mineros Salta S.A. (REMSA).
The property consists of 460.5 hectares of salt flat, located adjacent to and east of Argentina Lithium's Rincon West property, and adjacent to and west of Rincon Mining's Rincon Project, which was purchased by Rio Tinto PLC earlier this year.
"Our team identified the Salar de Rincon as an area of exceptional potential in 2021, leading to our initial property acquisition at Rincon West,” Nikolaos Cacos, president and CEO of the company said in a statement.
READ: Argentina Lithium kicks off exploration drilling at Rincon West project in Argentina
“Our positive drill results announced on July 13, 2022, have validated this confidence. The acquisition of Rinconcita II is a major step to add prime salt flat holdings to one of our leading projects. Our management team is looking forward to working with the Province to advance this project through exploration to assess its resource and production potential," Cacos added.
There has been no significant historical exploration work on the Rinconcita II property and was not sampled by Argentina Lithium prior to the bidding process. The company is currently drilling on its adjacent optioned property at Rincon West through applications presented at the Salta mining authority.
The Rinconcita II concession is accessible by road from the local towns of Olacapato and Estacion de Pocitos while an international highway and major electrical power corridor are located 26 kilometres (km) northeast of the property. A railhead and natural gas pipeline are located 34 km southeast of the property.
Terms of purchase
Argentina Lithium will make an initial payment of $2.5 million to REMSA at the time of signing of the purchase agreement. Additionally, it will pay REMSA a 3% Net Smelter Return (NSR) of mineral and refined products sourced from the property over its production life, if it advances to the production stage.
The company also presented a proposed exploration program that includes environmental permitting, ground geophysics, and exploratory drilling.
Non-brokered private placement
To ensure that it has sufficient funds to complete the acquisition and for working capital, Argentina Lithium also announced a part and parcel non-brokered private placement financing of up to 12,500,000 units at a price of $0.20 per unit for gross proceeds of $2,500,000.
Each unit will consist of one common share and one transferrable common share purchase warrant, with each warrant entitling the holder to purchase one additional common share at $0.38 per share for two years from the date of issue.
Argentina Lithium focuses on acquiring high-quality lithium projects in Argentina and advancing them toward production in order to meet the growing global demand from the battery sector.
Contact the author at jon.hopkins@proactiveinvestors.com