Orocobre pens maiden lithium/potash resource for Cauchari


Orocobre (ASX: ORE) has defined an initial Inferred resource for its Cauchari lithium-potash project in Argentina, located just 20 kilometres south of the company’s proposed processing plant site at its Olaroz lithium-potassium project.

The new Inferred resource, estimated by independent consulting hydrogeologist Murray Brooker, contains around 470,000 tonnes of lithium carbonate equivalent and 1.6 million tonnes of potash.

While the Cauchari resource is lower grade than Olaroz, the brine chemistry is similar, with an attractive low magnesium to lithium ratio (2.8) and high potassium to lithium ratio (10).

Initial evaluation of the process route suggests the brine could be processed in an expanded Olaroz plant.

The maiden resource is based on five diamond holes in Orocobre’s eastern Cauchari properties and is only to an average depth of 170 metres in the northern resource area and 50 metres in the southern resource area.

Importantly, future drilling is likely to substantially increase this resource as lithium and potassium mineralisation was encountered to the base of drilling at 249 metres in one hole.

An adjacent property owner, Lithium Americas Corp (TSX: LAC), drilled to 450 metres depth, indicating the depth potential of the area.

Orocobre as outlined an exploration target of between 0.2 million and 2.6 million tonnes of lithium carbonate equivalent and 0.5 million and 9.2 million tonnes of potash beneath the maiden resource.

Olaroz synergies

The company’s activities have been focused on exploration and development planning at the Olaroz salar project since 2008.

At Olaroz the company has completed a Definitive Feasibility Study and is planning to begin full-scale project construction by the end of October.

Orocobre now considers Cauchari part of the larger Olaroz project given the similarities between the two projects and their proximity to each other.

There are compelling synergies between the projects including the expected use of shared infrastructure and processing plants, and it is likely that any future development of the Cauchari brines would use the Olaroz facilities.

Earlier this month Orocobre finalised a deal with Toyota Tsusho Corporation to finance and build Orocobre’s flagship Olaroz lithium project.

Toyota Tsusho and Orocobre will contribute project equity of US$82.8 million, equating to about 30% of maximum project funding if the project financing facility is fully drawn.
At completion of the contributions, Toyota Tsusho will have a 25% indirect interest in the Olaroz project, Jujuy Argentina (JEMSE) 8.5% and Orocobre 66.5%.
The agreement with Toyota is an endorsement of the quality of the high purity battery grade product produced at the Olaroz Project over the last 18 months.

As part of its obligations under the January 2010 preliminary agreement, Toyota Tsusho has successfully procured a substantial and low cost project debt facility.
The debt financing will be provided by Mizuho Corporate Bank, with a maximum facility amount of about US$192 million.

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Quick facts: Orocobre

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