The target sediments are similar in origin to the neighbouring La Ventana deposit, operated by Bacanora Minerals and thought to be the largest lithium “clay” deposit yet identified.
Adrian Griffin, managing director, commented: "The maiden drill results demonstrate a target of great significance.
"These results, together with the outcome of the preliminary metallurgical tests, indicate the robustness of the lithium style mineralisation at our Mexican JV holdings."
More news will flow from the joint venture in the near term, as five holes for 627 meters have been completed.
Initial tests undertaken on trench samples from Agua Fria indicate the lithium is contained within a small fraction of the mass of the target material.
This provides good potential to increase plant feed grades by separating the lithium bearing component.
The current equity structure has Lithium Australia with 49%, and Alix Resources Corporation with 51%.