The following is part of the NI 43 101 conducted over the Litarsa mining fields
TECHNICAL REPORT ON THE LITARSA PROPERTIES
ANGELITA 02 and PAPADOPULUS LVII
SALTA PROVINCE, ARGENTINA
LITIO ARGENTINO SA
Mario Alfaro Cortés
“Public Register of Competent Persons on Mining Resources and Reserves,
Geology Registration 0262, Chile (RPPCRRMEG), by its acronym in Spanish”
AUSIMM Fellow N° 227551
This Technical Report is completed to assess the technical merits of its Belenus lithium project located in the south-east of the Diablillos basin, in the Puna region of Salta province, northwestern Argentina within the Lithium Triangle of South America, which encompasses terrains of the Andean regions of Argentina, Bolivia, and Chile, where closed basins have allowed development of a number of ore grade lithium brine deposits. The property is controlled by Litio Argentino S.A. (LITARSA), an Argentinean mining company, intending to develop exploitation of lithium brine deposits in the Puna territories.
Access to the Project from the Salta city is by the way of National Route 51 (RN-51) northwards to San Antonio de los Cobres along 167km, then southwards through Provincial Route 29 (RP-129) and mining roads for 195km. Roads to the area are normally in good standing during most of the year, except for the months of January to March when some cuts occur due to summer rains.
The Project consists of two mining properties known as Angelita 02 (262.76 hectares) and Papadopulos LVIII (2,316.67 hectares) which are duly registered to LITARSA at the Mining Court of Salta province. Both properties are free and clear from any legal, charges, liens or debts and are of free availability to LITARSA.
Climate in the area of the project is typical of high elevation Andean regions: extremely dry (<40% humidity); normally windy; atmosphere depleted in oxygen; and temperatures ranging from 24°C to -28°C, with an overall annual average of 5°C. Vegetation in the areaconsists of low steppe-type shrubs and occasional grasses near water sources. The main fauna includes vicuna, llamas, foxes, flamingos and few pumas (cougars).
Physiography in the area is characterized by an endorheic basin with locked drainage formed by the Diablillos River that form in the discharge zone a seasonal saline lake known as the Diablillos Salar. A saline-boratiferous crust is developed as a consequence of the high evaporation regime.
The Puna Region of Argentina (provinces of Jujuy, Salta and Catamarca) comprises some 30 salars, in general with potential to host lithium mineralization. These salars include:
- i) Producing operations at FMC Lithium’s Mina Fenix at the Salar del Hombre Muerto West and Orocobre operations at Salar de Olaroz;
- ii) Several advanced exploration projects such as Salar de Cauchari (Minera EXAR, Soquimich), Salar de Ratones-Centenario (Eramine), Salar de Llullaillaco (International Lithium), Salar del Rincon (Ady Resources), Salar de Diablillos (Lithium-X) Salar del Hombre Muerto East (Galaxy Resources); and
iii) A number of other projects in development, such as Salinas Grandes (Orocobre-Advantage Lithium) and Pastos Grandes (Millennial Lithium).
The authors consider that Belenus constitute a project of merit to host commercial lithium brines. It is recommended to continue exploration on the Project by testing a paleo-salar with an exploration program including further surface sampling, conductibility geophysics and a drilling program in a two phase evaluation program with basic investments of US$ 413,000 and US$ 630,000.
The authors recommend that LITARSA consider acquiring additional land over the area.
Litio Argentino S.A. (LITARSA) requested the authors to evaluate the technical qualifications of two (2) mining properties located in the province of Salta, Argentina, known as Angelita 02 (File 19,986) and Papadopulos (File 19,810). Both mining properties (the “LITARSA Properties”) lie in the southeast portion of the Salar de Diablillos basin in the Department of Los Andes of Salta, northwestern Argentina.
LITARSA is an Argentinean company funded by Argentineans financial capitals and plans to develop the properties through production of lithium brines.
The format and content of this Report are in accordance with the requirements of Canadian National Instrument 43-101 (Standards of Disclosure for Mineral Projects), including Form 43-101 F1 (Technical Report and Companion Policy 43-101CP).
Exploration data used in this report was collected in the field by the main author geologist Mario Alfaro Cortes and geologist Marita Ahumada of Grupo Rojas. The Report also draws on information on the geologic setting available in the public domain plus information made available by LITARSA.
This report was prepared by engineer Nivaldo Rojas and geologist Mario Alfaro Cortés.
Nivaldo Rojas is a Mining Engineer with a degree in mining engineering from the Universidad de Atacama in Chile. The author is independent of LITARSA according to the criteria set forth under Canadian National Instrument 43-101, and he is experienced in the geology, processing and development of lithium deposits in Argentina. He is a Fellow of AUSIMM, and by reason of education, past relevant work experience, and AUSIMM membership, he fulfills the requirements to be a “qualified person” (“QP”) for the purposes of NI 43-101.
Mario Alfaro Cortés, who is a geologist of the Universidad de Chile and Dr. Sc. University de Paris, France is independent of LITARSA, according the criteria set forth under Canadian National Instrument 43-101, and he is experienced in geology, processing and development of mineral deposits and a Qualified Person as defined by “Public Register of Competent Persons on Mining Resources and Reserves, Geology Registration 0262, Chile”(RPPCRRMEG), by its acronym in Spanish.
Mario Alfaro Cortés visited the Angelita 02 and Papadopulos LVIII properties on May 6thto 8th, 2017, with field personnel from Grupo Rojas and LITARSA. The objectives of the personal inspection were as follows:
- To become familiar with the layout and scale of the Angelita 02 and Papadopulos LVIII Properties including district geology, local geology and hydrology and evidence of previous exploration activities;
- To collect independent near-surface brine samples as to characterize the potential for lithium of the properties.
The objectives of the field inspection were fully achieved. The Technical Report complies with requirements set forward by financial institutions.
3. RELIANCE ON OTHER EXPERTS
For the purpose of this Technical Report the authors rely on the opinion of Dr. Rodrigo Castañeda Nordmann, of the Study Cantañeda Nordmann, listed in the Attorney Register of the Province of Salta under number 3217. By the day of May 11, 2017, Dr. Castaneda Nordmann addressed the authors that mining properties Angelita 02 and Papadopulos LVIIII were granted with definitive concession to Mr. Emiliano Guerreroon December 14thand October 13th2016, respectively. Additionally, Dr. Castaneda Nordmann has provided authorized information stating that mining fees due to the province are duly satisfied.
Dr. Castañeda Nordmann holds the title of Attorney at Law, granted by National University of Tucuman, Argentina (UNT) in 2005, He holds post graduate studies at Environmental Impact Studies at the University of Salta, a Mediation Course by the Magistracy School of the Judicial Power of Salta, and a Magister (Ms. Sc.) in Environmental Management in the Catholic University of Salta.
The authors also rely on data contained in the Environmental Impact Report (EIR) or Informe de Impacto Ambiental (IIA in Spanish), issued by geologist Carlos Enrique Ganán, listed as professional geologist N° A-181, in the Register of Evaluating Consultants of the Secretariat of Environmental and Sustainable Development of the Province of Salta and recorded as professional geologist N° 396 at the Professional Register of Salta Province. Mr. Ganán is a professional geologist graduated from the Universidad Nacional de Salta, Argentina.
4. PROPERTY LOCATION AND DESCRIPTION
4.1 Property Location and Accessibility
The LITARSA properties are centered 140km southwest of Salta City, in the southern portion of the Puna region of Salta Province, northwestern Argentina (Figure 4.1). The properties sit 4 to 9km southeast of the Salar de Diablillos. The elevation in the area ranges from 4,040 to 4,140 meters above sea level.
Access to LITARSA properties from Salta is by the way of National Route (RN-51) to San Antonio de los Cobres town along 167km of mixed paved and consolidated roads. Fifteen kilometers after San Antonio de los Cobres the access continues through Provincial Route 120 (RP-29, the road to Tincalayu Mine) along 140km passing through Santa Rosa de los Pastos Grandes village and mining camps of Sijes and Patito borate mines. After that, mining roads totalling 40km conduce to the LITARSA properties through the exploration camps of Galaxy Resources at Hombre Muerto and Abra Plata at Diablillos precious metal project.
4.2 Property Description
The LITARSA properties are located along the bed of the Diablillos River which is a fairly flat channel infill flanked east and locally west by mountain ranges standing up to 200 to 500m over the bottom of the river.
The properties are Angelita 02 and Papadopulos LVIII, both registered at theSalta Province Mining Courtunder the name of LITARSA’s President Mr. Emiliano Guerrero. The properties have been transferred to LITARSA by May 26, 2017.
The properties are both approximately rectangular shaped and cover a combined surface area of 2,579.43hectares (Table 4.1, Figure 4.2).
4.3 Types of Mineral Tenure in Argentina
There are two types of mining rights under Argentinean mining regulations: Cateos (Exploration Permits) and Minas (Mining Permits).
Cateos/Exploration Permitsare licenses which upon granting allow the property holder to explore the property for a period of time that is proportional to the size of the property. The basis of the Exploration Permits is 1 unit (500 hectares), which has a timeframe (validity) of 150 days. For each additional unit (500 hectares) the period is extended by 50 days. The largest Exploration Permit is 20 units (10,000 hectares) and has a period of 1,100 days. The period starts 30 days after the grant of the permit. The mining fee (“canon”)payable is AR$3,200 per each 100 hectares per year (approximately US$1.99 per hectare per year at the current exchange rate).
Minas/Mining Permitsare licenses which allow the holder to exploit the property subject to regulatory and environmental approval. Only the Exploration Permit holder may apply for a Mining Permit as a consequence of a discovery made within an Exploration Permit area, but anyone can apply for a Mining Permit over vacant ground. New mining permits may also be awarded for mines that were abandoned or for original mining concessions that were declared to have expired. In such cases, the first person claiming an interest in the property will have priority. If more than one person claims at the same time for such permit, the provincial mining authority must hold a register to determine who will be awarded with the new mining permit.
Mining Permits are unlimited in duration so long as the holder meets its obligations under the Mining Code, including payment of the annual canon fees, completion of a survey, submission of a mining investment plan, and meeting the minimum investment commitments (which is equal to 300 times the annual canon payment spent over a period of five years, from the filing of a capital investment plan).
The type of mineral commodity the holder is seeking to explore and exploit must be specified for both types of tenure (cateos and minas). Permits cannot be over-staked by new applications specifying different minerals; however adding different mineral commodities to a claim file is relatively straightforward.
4.4 Surface Owners vs. Mining and Exploration Rights
Pursuant to Argentina legislation, minerals belong to the provinces, except for certain types of mineral occurrences that belong to the surface owner, such as quarry products (limestone, construction materials and ornamental rocks).
Due to the common coexistence of separate surface and mineral rights within the same area, and in order to resolve likely conflicts between the surface owner and the owner of an exploration or exploitation license, article 13 of the Mining Codestates that “the exploitation of mines, their exploration, concession and other consequent acts, have the nature of public benefit”. Based on this principle, Exploration and Mining Permits have primacy over surface rights, provided that certain legal requirements are met, basically consisting of due compensation for damages or the posting of a bond when the amount of the compensation is not agreed with the surface owner or when the works to be done are urgent.
The owner of an Exploration Permit has the right to explore and therefore to access the area from the moment that the Exploration Permit has been granted subject to approval of an environment impact report (Informe Impacto Ambientalor “IIA” in Spanish). The Exploration Permit guarantees its owner access and exploration exclusivity of the area that has been granted even to the extent of obligating the police to enforce the miner’s rights.
Similarly, the owner of a Mining Permit has the right to start works and to access the mining property from the moment that the exploitation concession has been granted.
Surface owners have the right to require either due compensation from the licensor for the damages caused by the exploration and mining activities and the occupation of the land, or to post a bond with the Mining Judge guarantying that likely damages will be compensated. None of these claims or requirements could stop the exploration or exploitation works if the licensor agrees to pay the compensation or damages claimed by the surface owner or, if there is no agreement on that, if the explorer/miner posts a bond with the mining authorities.
4.5 Standing of the Mining Licenses
LITARSA lawyers have presented a Title Opinion, which is attached in Section 24. The conclude that:
- Both properties, Angelita 02 and Papadopulos LVIII, are in good standing and comply with applicable regulations.
- Both properties are free and clear from any liens, charges or encumbrances, as recorded in the relevant registries.
- The mining fee (canon) for Angelita 02 and Papadopulos LVIII are paid by LITARSA since the second half of 2016.
- Payments of canons arevalid through 1stsemester 2017.
- The separate claims that make up the LITARSA Properties are classified as “minas” or mining permits and therefore are unlimited in duration, provided that the biannual canon fees of approximately US$1.99/hectare are paid each year. These canons are set in two semi-annual payments, yearly.
4.6 Work Permitting
The permitting process in Argentina is very straightforward, especially in Salta Province. A permit to mine is granted as part of the mining license, but environmental approval is required by the office of the Mining Courtof Salta(Juzgadode Minas). This authorization is obtained by filing an environmental impact report (IIA).
The content of IIAreports vary according to the type and stage of activity being carried out on the property. The information requested is submitted administratively as a mineral extraction permit, covering quarries, water and brines. The areas to be addressed, as stipulated by the Mining Secretariat of Salta in accordance with Federal Environmental Law (Law 25,675), are basically:
- The nature of the work planed at the property including surface exploration, drilling schedule or production plans.
- Submission of the “Solicitud de Cantera” form (Request to open Quarry);
- Submission of a form stating that the company is debt free.
5. CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, BIOSPHERE AND PHYSIOGRAPHY
The Salar Diablillos basin and the Diablillos River display typical characteristics of the arid Andean Puneña climatic conditions. These are characterized by extremely dry and windy conditions with low temperatures and an oxygen depleted atmosphere due to the high elevation environment (4,040 to 4,140 masl). Humidity is typically in the range of 30-40%. The average annual rainfall decreases significantly from east to west and from north to south (Cabrera, 1968).
The average annual temperature is below 10°C; maximum temperatures exceed 20°C and minimum temperatures become below -25°C. During the summer rainfall, hail and snow normally occur, while in the winter season heavy snowfalls may occur and the temperatures become more extreme. Snow in the Puna typically does not accumulate on the ground for long due to high evaporation, the extreme dryness of the air and constant strong winds. Disruptive snowfalls are not common in the region, but when they occur they can disturb operations for a matter of a few days.
Wide diurnal temperature variations on the order of 30°C to -25°C are common during both summer and winter, and diurnal variations are more pronounced during the winter months.
Although the area is extremely arid, there are some few places with green wetlands called “vegas”, which are irrigated by natural water springs.
Wind is intense in the winter season, especially in the afternoons, and it typically decreases at night and in the morning. Dust and sandstorms occur occasionally, at times lasting several days, and are intense enough to carry clays and sand in suspension. During the remainder of the year the wind is less intense with little suspended material. In general, air quality is good and free of infectious or harmful contaminants.
Rainfall during the mid-summer months can sometimes interrupt field activities. Local rainfall in the Puna region averages 70 mm per year. In dry years, the rain does not significantly impact field activities. In rainy years, precipitation can be heavy enough to inundate salar depressions with extended shallow water flooding over flat areas. Nevertheless, mining operations at the salars can usually proceed unhindered year-round.
Net annual evaporation (evaporation minus precipitation) in this region is typically 750mm per annum, with evaporation rates peaking in mid-spring to early-summer and in late-summer to mid-autumn. Solar evaporation slows down in the cooler winter months and can be locally offset by heavy rains during the mid-summer months.
5.2 Meteorological Data Sources
A weather station operates at the Tincalayu Mine at the NW corner of the Salar del Hombre Muerto, some 30km west of the LITARSA property at an altitude of 4,010 masl. The climatic conditions at Diablillos are similar to those from the Weather Station. Climate parameters for the station are as follows:
Rainfall:The annual median rainfall is 63.8 mm with the highest monthly rainfall occurring in January with 31.4 mm. During August through November, rainfall is rare. According to recorded data, the month of January has the highest monthly rainfall and averages close to 50% of the annual total. A measurement in February 2014 recorded exceptionally high precipitation of 144 mm in 4 days. Precipitation occurs sporadically in the Hombre Muerto Salar in the form of snow during the winter months and rain between November and early March.
Temperature:The average annual temperature is 4.7°C. The warmest months are January and February with an average monthly temperature of 10.9°C and 10.3°C, respectively. The coldest month is July with a monthly average temperature of -2°C. The maximum and minimum mean annual temperatures are 13.9°C and -4°C, respectively. The absolute minimum temperature in January is -10°C and -28°C in July, while the absolute maximum temperatures are 26°C and 12°C, in January and July, respectively (Table 5.1).
Frosts:There is no formal frost data for the project area, but the authors experience is that frost occurs most days during the winter months from April through October, and the average annual frequency of days with frost is on the order of 150 days.
There is no data for humidity or wind recorded from the Hombre Muerto Weather Station.
5.3 Local Resources and Infrastructure
There is no production of basic domestic or industrial goods near the Property orneighbouringareas. Most of the provisions are brought in from Salta or San Antonio de los Cobres.
The village of Santa Rosa de Los Pastos Grandes, with approximately 200 inhabitants, is located 92km straight line north of the Properties. Santa Rosa has a basic infrastructure, a first aid station with ambulance service and basic and high schools. To the south of Santa Rosa de Los Pastos Grandes, the following mining and exploration camps are located: the Sijes (Borax Argentina S.A.), El Paso (Ulex S.A.), Patito Mine (Santa Rita S.A), and Sal de Vida (Galaxy Resources) and the Tincalayu mine (Borax Argentina S.A.).
The Salar de Pocitos village, with a population of 100 inhabitants, is located 105km northwest of the Property. It is a station on the Antofagasta-Salta international railway, which is planned to be reactivated to transport mineral goods to the port of Antofagasta, Chile. Salar de Pocitos is the site of an industrial park for distribution of natural gas to the south-central Puna. Also, it is the location for the regional road maintenance for western Salta. Basic restaurant and lodging services are available, as well as, a basic school and primary health center.
The terminus of the Gasoducto de la Puna (Puna Gas Pipeline) is located at the Mina Fenix (FMC Lithium), operation at Salar del Hombre Muerto, which is 49km west of the Project. This is the closest potential gas connection point, although it has not been reported it capacity to supply gas at that point. Recently, the Gasoducto de la Puna has connected the Mina Tincalayu borax operations with a 15km five-inch gas pipeline taking off at the Km 90 point of the Salar de Pocitos-Mina Fenix branch.
Soils are sparsely developed in the Puna, and they are classified as skeletal soils of Aridisol Order. These are soils of arid regions, ochre in color, with very low organic matter, low fertility and coarse texture.
According to the map of the soils published by “Instituto Nacional de Tecnología Agropecuaria” (INTA), soils in the area of the LITARSA Properties are the Paleargides type of the Aridisols Order. This is a type of azonal soil chiefly consisting or partly of weathered rock fragments that are typically found on steep slopes and have no economic value. There is a narrow zone of soil at the outer edge of the Salar de Diablillos and the Diablillos River, with surface soils consisting of salt-borate crusts.
The Diablillos Salar is a closed basin covering an area of approximately 17km x 7km extending along NS direction. Its main tributary, the Diablillos River consist of an 11 x 1-1.5km like channel, draining from the southeast. The basin is flanked eastwards by a chain of mountains reaching up to 5,100 masl, while towards west mountains reach 4,400 masl (Figure 5.1).
Typical vegetation in the area consists of low steppe-type shrubs. Individual shrubs are isolated from each other with bare soil between. The common species include two of the floral Provinces defined by Cabrera (1971) as the Puneña Province and the Altoandina Province.
Extreme cold, wind and the lack of water are some of the features of the severe climatic conditions that result in sparse regional vegetation of xerophile and halophile types. Typical are low shrubs, rusticated plants, characterized by tiny or no leaves, presence of thorns, and powerful and deep roots as well as shallow-expanded root systems in some cases.
Ninety percent of the area of the Properties has no vegetation, which is typical over the saline surface and rock outcrops at such high elevations.
The Puneña and Altoandina province mix from 4040 to 4,500 masl being characterized by dry and cold weather with seasonal variations in temperature being less than daily variations. Precipitation occurs between November and April and decreases from east to west at the district.
The fauna of the Puna is characterized by its adaptation to extreme living conditions as a result of high aridity, intense sunlight during the day and very low temperatures at night. Many animals have nocturnal habits, and live protected under rocks or in cracks. Others live below the surface or acquire specificbehavioursallowing them to withstand the harsh environment in which they live.
Cabrera and Willink (1980) describe the animal species in the Puneña biogeographic province. In the LITARSA properties area, camelids such as vicuña (Vicugna vicugna) and llama (Lama glama), the latter domesticated are common. Fox (Dusicyon, Lycalopex) and puma (concolor concolor) represent carnivorous species in the area.
Among rodents common to the area, a mole named Oculto or Tuco-Tuco (Ctenomys opimus)contributes to desertification of large areas as it feeds on roots of local flora. Additionally, the Puna mouse (Auliscomys sublimis) and the Chinchilla (Chinchilla brevicaudata) live in the region.
Birds include the flamingo andino,orparinaandina, (Phoenicopterusandinus)and at saline lagoons, the pato de la puna or puna duck (Anas puna); and the Andean goose or guayata or huallata (Chloephaga melanoptera)which lives in moist, rivers, and saline lagoons.The queu or quevo (Tinamotis pentlandi) inhabits the highlands being similar to a large partridge. The ñandú enano which is comparable to the species Pterocnemia pennata, which is similar to an ostrich, inhabits the lower plains of the region. Small parrots, pigeons and owls exist as sporadic inhabitants.
The donkey (donEquus africanus) is a species introduced by inhabitants of the area. Although domesticated, it competes for food with llamas and vicunas.
The LITARSA Properties and Diablillos Salar approximately cover an area of 452km², of which 35.15km² (Alonso et al, 1986) presents a markedly endorheic behavior produced by running water from the enveloping mountain ranges confining it to the east and west. In turn, extensive alluvial peneplains, also confined among mountains, descend from north and south to the Salar de Diablillos depocenter.
The best developed drainage system is the Diablillos River (Figure 5.2) draining from the Rio Blanco and El Quemado areas from the southeast and contributes with the largest water support to the Diablillos Basin. The LITARSA Properties are precisely located over caption area of the Diablillos River (Papadopulos LVIII property) and evolves northwest into shallow saline brine occurrences as it reaches the Angelita 02.
The occurrence of borate mineralization at the Argentinean Salars and associated sedimentary rocks is known since 1876. The extraction of borax (tincal) was initiated in 1956 when the Tincalayu Mine in the border of the Provinces of Salta and Catamarca was opened by Borax Argentina, a branch of Rio Tinto. New borate operations were added through the time as Sijes, Salar de Cauchari, Salar de Centenario and more recently at the Salar de Diablillos.
During the early 1960´s the Argentinean Government through the Dirección General de Fabricaciones (DGFM) conducted an intensive exploration for lithium mineralization which resulted in the identification of high anomalous lithium brines at the Salar del Hombre Muerto West, where the Mina Fenix was opened by FMC Lithium in 1996. The operation remains active to date at an average production of 17.000 tons of lithium carbonate annually.
Exploration and mining activity has occurred at the Salar de Diablillos at least from 1960. This activity in the area referred to seasonal exploitation of ulexite layers developed over the near surface sections of the Salar after evaporation of annual water influx. These ulexite operations were developed by small group of individual miners, especially at the western border of the Salar. These operations started to be anti-economical as result of decreasing prices of the hydrated borates (ulexite) by the decades of the 2000’s and 2010’s.
It is known that the DGFM installed a lithium pilot operation at the Rio Diablillos by early 1970s. Remains of the evaporation pools are abandoned being physically located in what is now owned by LITARSA, Papadopulos´ property.
With the lithium fewer after 2006 – 2007, lithium exploration was focused at the Salar de Diablillos and presently Lithium X holds a 50% interest in the Sal de los Angeles project covering a 95% of the Salar de Diablillos and totaling 8,254 hectares. A NI-43101 Technical Report displays mineral resource estimates of 1.037 million tons of lithium carbonate equivalent in the indicated category and 1.007 million tons of lithium carbonate equivalent in the inferred category. Non confirmed information indicates that Lithium X plans to convey the Sal de los Angeles through commercial production.
The LITARSA properties (Angelita 02 and Papadopulos LVIII) cover an area of 2,579.43 hectares along the Rio Diablillos having possibilities to form part of the southeastern extension of the Salar.
Other mineral deposits in the Diablillos area include the Abra de Minas’ Inca Viejo porphyry copper system sitting 8km north of the Salar; the Diablillos epithermal gold and silver deposits at Cerro Bayo, 6km south west of the Salar and the Cerro Blanco dome-like occurrence just by the western margin of the Salar. These mineral manifestations have been explored since the 1970.
The geological setting of the LITARSA properties reflects the regional framework of the entire Puna Region, including the following main lithological, structural and mineralization features.
7.1 Regional Geology
The oldest rocks cropping out at the Puna environment consist of a roughly north-south Precambrian-Early Paleozoic basement consisting of high to medium grade metamorphic rocks built up of schists, gneisses, slates and phyllites crossed by contemporaneous dikes of aplites, lamprophyres and pegmatites. Granitoids including different textural varieties of granites and granodiorites are seen within the Precambrian rock suites. These rocks are overlain westwards by a thick sequence of deep marine Ordovician metasedimentary assemblages. Two main synchronous north-south magmatic corridors characterized by coarse porphyritic texture invade the Ordovician sediments. Sparse expressions of Upper Paleozoic magmatic rocks intrude through the Ordovician metasediments. Well-developed Cretaceous shallow marine and continental sedimentary sequences infill the Andean backarc basins over the Ordovician and Precambrian basement. Sporadic occurrences of alkaline magmatism occur over Cretaceous time over north-east lineaments. Over the Tertiary-Present times the region became a succession of basins and ranges forming large sedimentary deposits with associated salt and borates crusts. Large calc-alkaline magmatism over Miocene-Pleistocene has contributed to settlement of large stratovolcanos, calderas with large release of pyroclastic and sub-volcanic intrusions
7.2 Regional Structure
Two main continental-scale structural deep sutures, trending N-S and NW-SE, control at least basin and range regime and the Tertiary magmatism. These Tertiary events are normally associated with ample hydrothermal alteration centres (Figure 7.1, Figure 7.2).
Mineralization over the Puna region comprises hard rock metallic ore deposits, soft rock non-metallic and brines containing lithium and potassium bearing deposits.
7.3.1 Metallic Mineralization:
A – Rare-Earth bearing pegmatites with lithium minerals and beryllium are recorded at the El Quemado and Diablillos areas in Salta;
B – Ag-Pb-Zn-(Cu) volcanogenic massive sulfides associated with Ordovician rocks at the Aguilar and La Colorada deposits in Jujuy;
C – Copper and Uranium deposits in limestone beds at as the Don Otto (U) and Juramento (Cu) mines in Salta;
D – IOCG (Fe-Cu-Au) occurrences at the Lindero-Rio Grande-Arizaro and La Sarita deposits in Salta;
E – Epithermal silver-zinc deposits such at Pirquitas, Chinchillas, Providencia and El Quevarin Jujuy and Salta;
7.3.2 Non-Metallic Deposits
A – Volcano-linked sulfur deposits at Mina Julia in Salta;
B – Widespread industrial mineral deposits in the salar basins as borates, sodium sulfates, halite, diatomite, etc.
C – Travertine – onyx deposits associated with bounding structures in the salar basins.
7.3 Brine Deposits
Widespread lithium-potassium brine deposits developed below the saline crust in more than 25 salar basins are being currently explored in the Puna region of Argentina. Table 7.1 shows known deposits, active companies and lithium grades at the surface according to information in the public domain.
The sub-surface ofSalar del Hombre Muerto lithium-rich brine in the neighborhood of Salar de Diablillos and the LITARSA Properties have chemical and isotopic composition which is consistent with lithium derivedfrom several sources (as proposed by Godfrey, L. V. et. al, 2013).
Modern halite saturated lagoons; Li-rich salts and brines formed recently; anddissolution of halite which precipitated from older saline lakes the Salar del Hombre Muerto lying in the closed basin thatincludes part of the Cerro Galán caldera drained by the Río los Patos, which is responsiblefor 90% of surface runoff into the salar.
The low Li isotope composition, +3.4‰, of this river are consistentwith significant contributions of geothermal spring water. As water drains through thevolcaniclastic deposits which cover a large proportion of the basin, Li removal, as indicated by decreasingLi/Na, occurs but without significant isotope fractionation. This indicates a mechanism of surface sorptiononto smectite or ferrihydrite rather than Li incorporation into octahedral structural sites of clays.
Theseobservations suggest that conditions in this high altitude desert have limited the dilution of hydrothermalspring water as well as the formation of clay minerals, which jointly have allowed the Li resource toaccumulate rapidly. Changes in climate on a multi-millennial time scale, specifically in the hydrologicbalance budget, have resulted in solute accumulation rates that have been variable through time, and decoupledLi and Na fluxes. Inflow to the salar under modern conditions has high Li/Na (7.9 to 10.3 by weight) with concentrations of Liindistinguishable from basement rocks (<0.3‰ to +6.4‰).
In the case of the Salar de Diablillos and the Diablillos River the source of lithium seems to be associated to Precambrian lithium bearing pegmatites and minor to hydrothermal developments, rather than to volcanic ashes and tuffs.
7.4 Local Geology
The oldest rocks cropping out in the LITARSA properties are conformed by a Precambrian schists and migmatites interbedded with schists (Figure 7.2). These rocks occur along the east and southwest flanks of the Diablillos River and cover a large flat area that extends more than 30km north-south by 15km east-west at an average elevation of 4,200 to 4,300 masl.
Metasedimentary rocks assigned to the Lower Paleozoic (Cambrian?) crop out around the northern border of the Diablillos Salar and are assigned to the Tolillar Formation. This is mainly volcaniclastic sandstone with subordinate sandstone beds. The Tolillar Formation is overlain by the Ordovician Falda Ciénega Formation consisting of greywacke, tuff and volcaniclastic sandstone. Rocks of this formation are widespread along the eastern flank of the salar.
The geology observed in the Diablillos River and southern extension of the Diablillos Salar are characterized by: i) it is the only depression of the Puna totally located in crystalline basement; ii) its age of formation is Quaternary (Pleistocene), and it does not form part of the basins compressed and recycled since the beginning of the Tertiary; iii) it shows a quadrangular areal format to be presented framed by an structural control over its four flanks; iv) it contains borates in almost the overall extension; v) at present time it does not have a significant saline crust on the surface or layers of halite; vi) the dominant borate is ulexite, present in both solid layers (“bar”) and nodules (“potatoes”) in different sizes and agglomerations in sand and/or silt-clay packages, which in some sectors reach up to 1.20 m thickness; vii) In the southeastern corner of the salar (entrance of the Diablillos River) small amounts of borax or tincal are found as 1 to 2 cm of anhedral crystals grown together with ulexite in a reddish clayed horizon; viii) in a drill well the base metamorphics was found to the depth 75 meters.
The development of a cross section through the Salar de Diablillos shows a surface layer of ulexite of one meter of thickness, then 10 cm of carbonaceous caliches, continuing a succession of greenish, grayish and yellowish pelites and sandstones up to 30m, to finish with micaceous quartz-feldspar sands and a coarse basal conglomerate. The lithology of the section represents the conditions of filling of the cuvette as a sequence that culminates in the shallow evaporitic deposit. The absence of layers of gypsum and chlorides in the salar is notable. The borate bearing facies is represented in almost all the area of the salar and its base can be composed by carbonaceous caliches or obscure organic muds (Alonso et al, 1986) or sometimes by sandstones or green or brown pelites.
7.5 The Exploration Target
The target area at the properties is part of a high energy canyon that is periodically flooded as a result of rains during the summer season contributing to a buildup of a sandy-salt crust surface flowing into the Salar de Diablillos. The canyon occupies some 9km in length along northwest direction by 0.8 to 1.2km.
The canyon may contains several compact saline horizons with sediments and porous salty inter-beds, which are potentially favorable for the accumulation of saline brines, especially in the outlet towards de Salar de Diablillos. The canyon collects water along temporary streams from a catchment area of about 200 to 300 square kilometers.
Fields evidences indicates that chemical elements such as Li, K, B, Mg, among other metal are leached, transported, and concentrated by evaporation along the canyon and at the Salar de Diablillos. The best concentration of lithium brines seem to be associated to the Rich Brine Drainagecollector running over the northeast flank of the Diablillos River.
8. LITHIUM DEPOSIT TYPES
The physiographic environment at LITARSA properties corresponds to stream canyon that feed the Diablillos Salar from the south-east. On the surface, the Diablillos River is covered by gravels built up of floats of quartz, gneisses and occurrences of clay, silt, sand, sodium chloride, sulphates, carbonates and borates (ulexite). Saline brine fluids are common at relatively shallow depth. These fluids are interpreted to be a blend of brine with fresh water influx to the basin. The Diablillos Salar is similar to the Silver Peak terrigenous salar in Nevada, which was the first lithium-bearing brine deposit mined in the world. These deposits are characterized by restricted basins within deep structural depressions in-filled with sediments differentiated as inter-bedded units of clays, salt (halite), sands and gravels.
Continental brines are the primary source of lithium products worldwide. Bradley et al. (2013) noted that “all producing lithium brine deposits share a number of first-order characteristics, as follows”:
- Arid climate;
- Closed basins containing a playa or salar;
- Tectonically driven subsidence;
- Associated igneous or geothermal activity;
- Suitable lithium source-rocks;
- One or more acceptable aquifers; and
- Sufficient time to concentrate brines.
Lithium typically does not readily form evaporite minerals; it remains in solution and concentrates to high levels, reaching 4,100 ppm at Salar del Hombre Muerto, Argentina. Large deposits are mined in the Salar de Atacama, Chile (Soquimich and Albemarle), Salar de Hombre Muerto, Argentina (FMC); Salar de Olaroz, Argentina (Orocobre) and Clayton Valley, Nevada (Albemarle), which is the only North American brine producer.
Lithium brine deposit models have been discussed by Bradley et al (2013). Houston et al. (2011) classified the salars in the Altiplano-Puna region of the Central Andes of South America in terms of two end members, “immature clastic” or “mature halite”, primarily using: i) the relative amount of clastic versus evaporite material; ii) climatic and tectonic influences, as related to altitude and latitude; and iii) basic hydrology, which controls the influx of fresh water.
The immature classification refers to basins that generally occur at higher (wetter) elevations in the north and east of the region, contain alternating clastic and evaporite sedimentary sequences dominated by gypsum with recycled salts, and have a general low abundance of halite. Mature classification refers to salars in arid to hyperarid climates, which occur in the lower elevations of the region, reach halite saturation, and have intercalated clay and silt and/or volcanic deposits. An important point made by Houston et al. (2011) is the relative significance of aquifer permeability, which is controlled by the geological and geochemical composition of the aquifers. For example, immature salars may contain large volumes of easily extractable Li-rich brines simply because they are comprised of a mixture of clastic and evaporite aquifer materials that have higher porosity and permeability. For example, the Salar de Atacama and the western side of Hombre Muerto salar could be classified as a mature salar whereas the Diablillos salar has characteristics more like an immature salar.
Recent discoveries, particularly in northern Argentina, point out the importance of sedimentary sequences in the host basins. Discoveries since 2010 in the Cauchari, Olaroz and Centenario salars involved deeper, early basin in-fill coarse sediments hosting lithium and potassium-enriched brines. It appears that as the regional tectonic relaxation gave rise to pull-apart basins, the first sediments to fill these basins were coarse, higher energy sediments derived from the nearby steep terrain. These coarser sediments have more and larger pore spaces, increasing the transmissivity of the formation. As the basins fill and the higher topography was eroded, the sediments tend to become finer. As the runoff and hydrothermal fluids concentrated in the closed basins, common salt (NaCl) tended towards saturation, while lithium, boron, potassium and other elements became more concentrated as the fresh water evaporates at the surface, and in particular at the basin margins. As the trapped fluids became brackish and eventually evolved into brines containing greater than 10,000 ppm contained salts, the density increases, typically to slightly in excess of 1.2g/cm3. The denser brine tends to separate and sink beneath fresh water and less saturated solutions and even to start migrating outwards beneath the encroaching fresh water at the basin margins. Lithium concentrations tend to increase in a direct relationship to density, thus it is not surprising to find more consistent and higher grades at depth. The deeper, coarser sediments tend to make higher yielding aquifers.
This Technical Report includes exploration completed at LITARSA properties from May 6thto May 8th, 2017. This work was carried out with the aim to evaluate the potential for lithium of brines along the Rio Diablillos drainage system. It includes i) a general geological reconnaissance on the properties; ii) collecting of water/brine samples at 11 well-pits within the properties.
9.1 Geological Reconnaissance
The geological reconnaissance was completed by QP Mario Alfaro Cortés, with the purpose to identify the main hard rock units building the tenement areas, as well as the soft rock units hosting potential lithium bearing brines. A view of the main rock assemblages, water influx over and accumulation over the Salar de Diablillos are shown in Figures 9.1 and 9.2. Rock types consist of Neo-Proterozoic to Cambrian basement built up of metamorphic and intrusive rocks with dikes of aplites, lamprophyre and pegmatites invaded by Tertiary dome-like and porphyry intrusions.
9.2 Brine Sampling
The water-brine sampling was achieved by Grupo Rojas’ geologist Maria Ahumada, under supervision of the QP. The sampling was carried out by means of water pits dag with manual auger device (Figures 9.3) at both Angelita 02 (8 samples) and Papadopulos LVIII (3 samples). Wells were excavated in poorly consolidated sediments to depths of 0.40 to 1.00 meters, where the brine-water table was detected. Brine samples were gathered by bailing fluids from the open hole to surface.
Prior to bottling, the bailed samples were transferred to a bucket that had been rinsed with the same brine of the sample (Figures 9.4). Fine sediments were allowed to settle in the bucket before the fluid sample was transferred to unpolluted 1 liter plastic bottles provided by the Laboratory (Figures 9.5).
The bottles were rinsed with the brine fluid, and then filled with sample fluid to bring the fluid level to the top of the bottle, and any airspace was removed. Bottles are labeled with a bar code offered by the laboratory. The bottles were capped and stored in a plastic thermal box to avoid direct sunlight. Details of field descriptions are displayed in Table 9.1. Locations of samples are shown at Figure 9.6.
9.3 Sample Transportation
Brine samples were transported to Salta under custody of QP Mario Alfaro Cortés. From Salta the samples were sent to the Alex Stewart Assayers Argentina S.A. (ASA) laboratory in Jujuy, Argentina under custody of Grupo Rojas personnel.
9.4 Sample Results
Analytical data for lithium, calcium, magnesium, boron, sodium, potassium, chloride, sulfate, carbonate, and tests for pH, density and conductivity as reported byAlex Stewart Assayers Lab(ASA) are shown at Table 9.2. Sample results for Lithium are shown in Figure 9.7. Full ASA Report is included at Section 24.
9.5 Brine Types
The Salar de Diablillos developed as a closed basin, with significant support of the Rio Diablillos, if compared with other tributaries from north, south and southwest. The Rio Diablillos is a semi-permanent water flow draining different types of granites, granodiorites and gneisses and dike-like intrusions composed of aplites, lamprophyres and pegmatites which have been reported to carry on lithium minerals as spodumene, lepidolite and petalite.
Sampling along the Diablillos River shows 4 anomalous values for lithium varying from 60 mg/L to 122 mg/L and one high anomalous sample over the Papadopulos LVIII claim revealing 395 mg/L, which confirm the original belief about the primary source of lithium (Figure 9.6).
Lithium assays confirm original assumption that the Rio Diablillos holds two main flows: i) A northeastern flow tending to be richer in lithium as results of the rocks it drains (Rich Brine Drainagein Figure 9.8), in comparison with ii) the southwest flow (Fresh Water Drainagein Figure 9.8) where mineralization seems to be diluted by the support of fresh water tributaries from the southwest.
Nonetheless, it is believed that the potential for lithium mineralization at the LITARSA property may be restricted to several levels of aquifers associated to the evolution of the Diablillos Salar and the Diablillos River, as shown in Figure 9.9.
9.6 The Geological Conceptual Model
The endorheic basins of the Puna region were active from the early Oligocene-Miocene and were essentially of continental back arc origin, with mostly clastic and minor evaporite sediment support. The volcanic arc was located in the present Chilean territory with little involvement of volcanic components. It is has been proposed that the elevation of the region would probably have been about 2,000 masl. Orographic barriers to the east and south of the Puna have been postulated, and these would have formed a barrier to humidity ingression, turning climate into an arid environment.
At 12 Ma (Quechua I Phase) the Puna rose to 2,500 masl commencing a significant period of volcanism. The large endorheic (closed) basins were divided into smaller sub-basins due to tectonism, and they received an important contribution of volcanic material, mainly as andesitic lavas and pyroclastic rocks (tuffs and ignimbrites rich in lithium and potassium). Hot springs associated with volcanic centers added chemical elements to the endorheic basins.
At 6 Ma (Quechua II Phase) there was a renewal of compressive tectonic events, and the Puna area rose up a little more. Volcanism added tuffaceous material to the basins, and associated hydrothermal activity continued adding chemical elements, such as borates at the Tincalayu, Sijes and Loma Blanca mines. Folding and faulting of pre-existing rocks occurred during the Pliocene Period.
At 2 Ma (Diaguita Phase), a period of extension began in the Puna region, with emplacement of small monogenic volcanic centers with eruption of andesitic-olivine basalts corresponding mainly to the Pleistocene Period.
Rocks such as ignimbrites and welded tuffs from the Galan caldera (>40 km in diameter), pumice of the Cerro Blanco volcanic center south of Diablillos, and older intrusive and metamorphic acidic rocks in the eastern Diablillos basin constitute a source area of 6,000 km2. These rocks have high silica content and therefore they also have higher lithium and potassium content than other rocks of the earth crust. Weathering leached lithium, potassium and other elements from these rocks, and the solutions were transported to the central portion of the basins (salar).
The salar is the lower part of a closed basin where water is evaporated and the chemicals become concentrated. In the salar most chemical elements are concentrated by evaporation processes, which commonly reach rates of 6 to 8 mm/day.
The Diablillos river and the Diablillos salar were probably developed during much of the Pleistocene period (<2.0Ma).
No drilling has been completed at the LITARSA Properties project to date.
11. SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1 Sample Collection and Preparation and Shipment
Brine samples from LITARSA Properties were collected and prepared according protocols for standard brine sample collection described in Section 9.2. During the sampling campaign, one liter samples were secured in bottles and containers provided by the Laboratory. Total specimens shipped to the Lab were 14 samples.
The sample containers were transported by Mario Alfaro Cortés to Salta and then shipped to the ASA Laboratory in Jujuy by Grupo Rojas personnel on May 9, 2017.
11.2 Analyses by Alex Stewart Assayers
The ASA laboratory in Jujuy is operated by Alex Stewart Assayers Inc. with main Argentinean offices in Mendoza and international head offices in Great Britain. ASA’s laboratory in Jujuy has extensive experience analyzing lithium-bearing brines. The ASA laboratory is ISO 9001 accredited and operates according to Alex Stewart Group standards, consistent with ISO 17025 methods. Samples were analyzed for metals using Induced Coupled Plasma spectrometry (ICP). ASA provided certificates of analysis and digital format to LITARSA. Copy of the assay certificate is provided in Section 24.1.
A blank and two duplicate samples were inserted in the sample batch prior to forwarding to the ASA laboratory. The Lab run a duplicate of sample AM-010. The sample results reported by ASA are shown at Table 11.1.
12. DATA VERIFICATION (QA/QC)
12.1 Duplicate Assays
Two duplicate and control samples were included within the sample batch assayed by Alex Stewart:
Sample AM-012 is a field duplicate of AM-005, which was collected at the same time as AM-005. AM-014 is a duplicate of AM-002, collected at the same time as sample AM-002. The two samples check well with assay values, pH, density and conductivity (Table 11.2).
12.2 Blank Samples
A blank sample corresponding to fresh water for human consumption al the Abra Plata camp for was inserted as AM013. It returned assays values for Li and K close the respective limits of detection (Table 11.3).
12.3 Self Duplicate Sample by the Lab
A duplicate sample assayed by the Laboratory on sample AM-10 checks perfectly with the original.
At this level of accuracy, duplicates and blanks check reasonably with the original samples.
13. MINERAL PROCESSING AND METALLURGICAL TESTING
No mineral processing and metallurgical testing has been completed at this stage.
14. MINERAL RESOURCE ESTIMATES
No ore resource estimates have been completed for the Angelita 02 and Papadopulos LVIII properties.
15. MINERAL RESERVE ESTIMATES
No mineral resources have been estimated at this stage.
16. ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT
16.1 Environmental Impact Report
LITARSA has submitted an Environmental Impact Report (EIR) to the Environmental Authority of the Province of Salta. This report was prepared for the Prospection Stage, which allows conducting basic surface exploration, including surface mapping and sampling, geophysics but not allowing developing mechanized operations as trenching, well drilling and/or mineral processing.
The Environmental Impact Report (EIR) or Informe de Impacto Ambiental (IIA in Spanish), has been issued by Carlos Enrique Ganán, listed as a Professional Geologist N° A-181, in the Register of Evaluating Consultants of the Secretariat of Environmental and Sustainable Development of the Province of Salta (N° 396).
The Environmental Report submitted to the Authority recommends the observance of the following main issues:
16.2 Description of the Environmental Impacts – Mitigation Actions
Circulation vehicles only will be accepted on existing roads. It not will be accepted to build or clean up new road traces. Samples will be at surface, limited to surface crust and surface sediments. No pits, wells or trenches to be opened in this stage.
16.2.1 Impact on Soil and its Current and Potential Use
What is said in the previous paragraph also corresponds to the case of soils. On the other hand, there is no current or potential use by the characteristics of the soils. Therefore, this will be considered as a non-relevant impact.
16.2.2 Impact on Surface and Ground Waters
The work to develop will not affect this component.
16.2.3. Impact on the Quality of the Air
During the exploratory work, the engines of the vehicles emit gases from combustion processes. The circulation of vehicles will also produce emissions of dust or particulate matter. These impacts were valued of low intensity and punctual. It will be set a maximum speed of mobilization at 20 km/h in order to minimize emissions of dust, also of that form will avoid accidents with the native fauna.
16.2.4 Impact on Flora
Exploration will not affect flora by its defined nature. Instructing the staff on need of care to the environment is appreciated. It shall be strictly prohibited the removal of vegetation.
16.2.5 Impact on Wildlife
The mine or operations are located away from “vegas” and freshwater sites serve as refuge to the local fauna. The movement of trucks and the noise produced by its engines can affect wildlife, but due to the capability of the majority of the species present or and reported in the region, it is valued to keep this impact to a minimum. The possession of firearms, as well as hunting and fishing is prohibited.
16.2.6 Impact on the Socio-Cultural Environment
This impact is assessed as a positive issue since it will generate temporary employment and will demand lodging and feeding services.
Prior to the start of work a communication plan will be implemented plan. The plan that will consist of:
1. Recruitment of qualified staff to perform a survey of the communities close to the project, including surveys on the perception of mining activity in general.
2. Call for a briefing through references from the nearby towns and villages (in this case Santa Rosa de los Pastos Grandes), focused on teachers, police, neighbourhood centres, associations of craftsmen and representatives of native communities.
3. The meeting will inform on the activity of the company in particular, nature of the work to be developed and reception doubts and concerns that may arise.
16.3 Environmental Control Plans
16.3.1 Environmental Contingency Plan
It is not expected at this stage the occurrence of this type of emergencies. Only that might occur as the accidental spillage of fuel or lubricants for mechanical malfunctions. In this case it is recommended to proceed as follows:
1. Identify the source of the loss.
2. Check and control the loss.
3. Contain the contaminants and clean the affected area.
4. Remove the soil affected.
5. Transportation and final disposal to authorized operators.
16.3.2 Environmental Management Plan
While work, develop the plan and assessment of impacts shown, that all the possible impacts are irrelevant, the following preventive actions will be considered:
1. Roads, tracks or trenches will not be open. Only the existing roads will be used.
2. A maximum speed of 20 km/h shall be established to circulate in the project.
3. This to minimize dust emissions and avoid accidents with wildlife.
4. The use of vegetation for any purpose shall be prohibited.
5. Banning on hunting, fishing and possession of firearms.
6. No maintenance of vehicles in the area of the project will be allowed. Maintenance of vehicles on workshops enabled for this purpose in urban centres.
7. Not allowed loading or transferring fuels in the area of the project. Fuel should not be stored.
8. Waste to be generated is of domestic-type. It they will be stored and transported to the nearest town with waste collection service.
9. It will prioritize hiring local labour.
10. The cultural patterns of the inhabitants of the zone will be fully respected.
11. Any modifications to the original project will be notified previously to the implementing authority and simultaneously presented an extension or a new environmental impact report for the stage which corresponds.
The respective EIR as presented to the Authority are included in the Appendix Section of this report.
17. ADJACENT PROPERTIES
According the Cadastral map of the Province of Salta, The Angelita 02 and Papadopulos LVIII properties are limited to the north by a large package of properties held by Lithium X (Shown in Figure 4.2). These properties cover most of the Salar de Diablillos totaling 8,254 ha.
Other players in the district include the Abra Plata (Ex-Silver Standard) controlling the Diablillos epithermal gold and silver deposit, sitting 15km west of the properties.
18. OTHER RELEVANT DATA AND INFORMATION
No additional information other than that described in this report has been received or generated at the project since the commencement of this present Technical Report.
19. INTERPRETATION AND CONCLUSIONS
1. The Diablillos basin and the area of LITARSA properties have likely been developed probably over the last 2 or 3 million year, differing on other salars of La Puna, whose has been active over the last 15-20 Ma. Other differences with “normal” Salars in the Puna is the origin of the lithium brines, which normally includes large amounts of young tuffaceous and ash flows and hydrothermal support associated to regional major structures. In the case of the Salar de Diablillos and the LITARSA properties the source of lithium seems to be associated to the erosion and dissolution of Proterozoic rocks including metamorphic assemblages, large acidic intrusions and well developed fields of Proterozoic dikes of pegmatites, aplites and lamprophyres.
2. A relatively small, but effective precipitation capture system allowed the leaching of alkaline metals from anomalous enveloping rocks as water and sediments flooded the basin every year and evaporated during the dry season over the last 2 millions of years, or so. No present evidence of additional support as young volcanics is seen over the caption areas. Some evidences of hydrothermalism are evident in the western edge of the Salar (The Cerro Blanco) and over the Diablillos epithermal precious metal and associated dome deposits where volcanic and subvolcanic rocks crop out.
3. High-alkali and particularly high-lithium rocks enveloping the Diablillos Basin were available to be leached from leucogranites and gneisses with pegmatite dikes, typically carrying lithium minerals such as lepidolite, spodumene and petalite, mainly cropping out at the eastern flanks of the Diablillos basin (areas of Rio Blanco Metamorphic Complex and El Quemado pegmatite district).
4. Brine samples collected over in the LITARSA Properties are clearly mixtures of saline brine and surficial fresh water running from favourable rocks in the southwest Angelita 02 and Papadopulos LVIII. Results of sampling completed to date indicate 4 anomalous values between 60 and 102 mg/L. The best sample at Papadopulos LVIII ground reveals 395 mg/L. These values on mixtures encourage additional work to define further geophysical and drill testing over the properties (Figure 9.7).
5. The Diablillos Salar looks like to have been larger that it is shown at the present time and that a paleo-salar basin may extend north and south of the present saline-boratiferous surface. The Angelita 02 and the northwestern portion of Papadopulos LVIII least exhibit possibilities to detect paleo-salar features and aquifers to depths of up to 100 meters.
The authors consider that the LITARSA Angelita 02 and Papadopulos LVIII are properties of merit as to contain lithium brines amenable to be extracted commercially. It is recommended to continue the exploration effort matter of this Technical Report to complete target definition through a two-phase search.
20.1 Drill Exploration Phase One
20.1.1 It is recommended to infill with additional surface sampling over both properties in order to precise main anomalous areas. The sampling infill would be based on figures 9.7 with emphasis on higher lithium anomalies associated to the Rich Brine Drainage flow shown at Figure 9.8.
20.1.2 It is recommended to carry out a geophysical conductivity characterization of the Rio Diablillos by means of Controlled Source Audio-Frequency Magnetotellurics (CSAMT) of the project in order to understand about vertical distribution of the aquifers as shown at Figure 20.1.
20.1.3 According to CSAMT and geochemical results, two drill wells would be programmed at position LITDH-01 and LITDH-02 and Table 20.1. It is preliminary anticipated that drill wells may have 100 to 150m depth. It is recommended to drill vertical holes commencing with tricone in the upper conductive units (surface to 50m) continuing with HQ diamond drilling, installing casing or cementing to avoid mixture of fluids from different portion of the hole along conductive horizons. Core samples should be evaluated to determine the fluid in the formation and the effective porosity. “Packer” sampling should be completed at each geological change (or 10+ meters). The drilling should ideally penetrate the entire sedimentary pile, if this has enough conductivity response. “Drive point” sampling should be considered at each lithological change or at favourable zones. In the event that concentrated brines with lithium content are found in the initial hole, this can be reamed out later to a diameter of 6” to 8”, installing well filters and pre-filters.
20.1.4 The location for a follow up hole will be determined based on the results of LITDH-01. Phase one will conclude with the completion of the second hole LITDH-02.
20.2 Drill Exploration, Phase 2
Depending on the results of the initial drilling, complementary geophysics and additional surface mapping and sampling could be undertaken to precise the distribution of water-brine inflow.
1. Drilling of additional holes, would eventually be necessary depending on further geophysical review and results of wells (LITDH-01 and LITDH-02)
2. It is recommended to consider acquisition or control of additional mining rights in the Diablillos River, especially northwest of Angelita 02.
20.3 Cost of the Technical Program
The preliminary exploration work must have a two phase budget for assessment of lithium mineralization at the LITARSA Lithium Project is as shown in Table 20.2 (Phase 1) and Table 20.3 (Phase 2) below.
Note: This exploration budget does not include LITARSA’s General and Administration, not permanent settlements and not property or land acquisition payments.
Alonso, R., Gutierrez, R. y Viramonte, J., 1986, “Megacuerpos salinos Cenozoicos de la Puna Argentina”, Actas 9o Congreso Geológico Argentino, Bariloche, Actas I, pp.25-42.
Bradley D., Munk, L., Jochens, H., Hynek, S., and Labay, K., 2013, “A Preliminary Deposit Model for Lithium Brines”, U.S. Geological Survey Open File Report 2013-1006, 6 pp.
Cabrera, A.L., 1968, “Ecología Vegetal de la Puna”, Colloquium geographicum, pp. 91-116.
Cabrera, A.L., 1971, “Fitogeografía de la República Argentina”, Boletín de la Sociedad Argentina de Botánica, Vol. 14, pp. 1-42.
Cabrera A.L., and Willink, A., 1980, Biogeografía de América Latina, 2ª edición corregida, Monografía 13, Serie de Biología, Secretaría General de la Organización de los Estados Americanos, Washington, DC, 120 pp.
Godfrey, L.V., Chan, L. H., Alonso, R. Ni., Lowensteir, T. K., McDonough, W. F., Houston, J., Li, J., Bobst, A. and Jordan, T. “The role of climate in the accumulation of lithium-rich brine in the Central Andes”. Applied Geochemistry 38 (2013) 92–102
Kasemann, S.A., Meixner, A., Erzinger, J., Viramonte, J.G., Alonso, R.N., Franz, G., 2004, “Boron isotope composition of geothermal fluids and borate minerals from salar deposits (central Andes/NW Argentina)”, Journal South American Earth Sci., Vol. 16, pp. 685–697.
Turner, J.C.M., 1972., “Puna”, in: Geología Regional Argentina, Leanza, A.F., ed. Academia Nacional de Ciencias, Córdoba, Publicación especial, pp. 91-116.
23. CERTIFICATES OF QUALIFIED PERSONS
23.1 CERTIFICATE OF AUTHOR Dr. Mario Alfaro Cortes,
I, Mario Alfaro Cortes, registered as a Qualified Person in the “Registro Público de Personas Competentes en Recursos y Reservas Mineras, Especialidad Geología (RPPCRRMEG) , Registro 0262, Chile”, do hereby certify that:
1) I am an independent consulting geologist with business address at Luis Pereira 983, Ñuñoa, Santiago, Chile.
2) I have the following academic and professional qualifications and experience
a. I am a graduate geologist, from Universidad de Chile, in 1964 and as Dr. Sciences of Université de Paris, France in 1971.
b. I have practiced my profession in mineral exploration and the mining industry continuously since graduation in 1964.
c. I am duly registered at the “Registro Público de Personas Competentes en Recursos y Reservas Mineras, Especialidad Geología, Registro 0262, Chile (RPPCRRMEG)”.
d. Experience relevant to this Report:
i) I am a professional geologist with over fifty years of experience in the mineral industry, specialized in metallic ore deposits exploration;
ii) I am specialized in of ore resources and ore reserves estimates;
iii) I am focused in due diligences; project generation; land acquisition; joint ventures agreements, and qualifying technical reports.
3) I have read the definition of “qualified person” set out in National Instrument 43-101 (NI 43- 101) and certify that by reason of my education, affiliation with a professional association (as defined by NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101. This because I have the appropriate level of membership in one of the Accepted Foreign Associations and Membership Designations as indicated in Appendix A of NI 43-101;
4) I visited the LITARSA properties Angelita 2 and Papadopulos LVII Project on May 6th to 8th, 2017, while conducting brine sampling over the properties.
5) I am the main responsible for this technical review and writing of the report entitled “Technical Report on the LITARSA’s Angelita 02 and Papadopulos LVII, Salta Province, Argentina” with an effective date of 23th, 2017.“Public Register of Competent Persons on Mining Resources and Reserves, Geology specialty, registration 0262, Chile”
6) I am independent of the properties Angelita 02 and Papadopulos LVII and independent of the LITARSA, the owners of the Property.
7) I state that, as at the date of this certificate, to the best of my qualified knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading;
8) I have no personal knowledge, as of the date of this certificate, of any material fact or material change which is not reflected in this Technical Report;
9) I am independent of the Issuer as defined in Section 1.5 of NI 43-101; and
10) I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.
Effective Date: June 10th, 2017
Date of Signing: June 10th, 2017
Original signed and sealed
”Public Register of Competent Persons on Mining Resources and Reserves, Geology Specialty, Registration 0262, Chile(RPPCRRMEG), by its acronym in Spanish”.
(Signed) “Mario Alfaro Cortes”
23.2 CERTIFICATE OF AUTHOR Eng. Nivaldo Rojas
I, Nivaldo Rojas, FAusIMM, do hereby certify that:
1) I am an independent Mining Engineer with main offices at Guayaquil 285, Barrio Arizu, Godoy Cruz, Mendoza 5501, Argentina.
2) I have the following academic and professional qualifications and experience:
a. I am a graduate of Universidad de Atacama (Copiapó, Chile) with a B.Sc. in Mining Engineering obtained in 1982;
b. I have worked in mining and mineral exploration continuously since graduation;
c. I am a Fellow in good standing of the Australasian Institute of Mining and Metallurgy – FAusIMM (no. 227551);
d. Experience relevant to this Report:
i. Understanding of the geology and mining of mineral deposits at the Central Andes of Argentina and Chile, having worked at the Argentinean and Chilean Puna regions for over 40 years;
ii. Over 40 years of experience in exploration and evaluation of metallic minerals and project evaluation;
iii. Over 9 years in exploration and management of lithium projects in Argentina and Chile;
3) I have read the definition of “qualified person” set out in National Instrument 43-101 (NI 43- 101) and certify that by reason of my education, affiliation with a professional association (as defined by NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101 because I have the appropriate level of membership in one of the Accepted Foreign Associations and Membership Designations as indicated in Appendix A of NI 43-101;
4) I am coauthor responsible for the technical review and writing of the report entitled “Technical Report on LITARSA’s Angelita 02 and Papadopulos LVII Projects, Salta Province, Argentina” with an effective date of May 23th, 2016.
5) I am independent of the Angelita 02 and Papadopulos LVII and independent of LITARSA, the owners of the properties.
6) I state that, as at the date of the certificate, to the best of my qualified knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading;
7) I have no personal knowledge, as of the date of this certificate, of any material fact or material change which is not reflected in this Technical Report;
8) I am independent of the Issuer as defined in Section 1.5 of NI 43-101; and
9) I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.
Effective Date: June 10th, 2017
Date of Signing: June 10th, 2017
Original signed and sealed
(Signed) “N. D. Rojas”
Nivaldo Rojas, FAusIMM
APPENDIX 24.1 CHEMICAL ASSAYS BY ALEX STEWART ASSAYERS
APPENDIX 24.2 LEGAL OPINION BY Dr. Rodrigo Castañeda Nordmann
APPENDIX 24.3: NOTICE OF CONCESSION OF ANGELITA 02
APPENDIX 24.4: NOTICE OF CONCESSION OF PAPADOPULOS LVIII