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Argosy Minerals looks to commercial vision for Rincon project in Lithium Triangle

The company’s lithium hydroxide exceeded battery-grade standard in lab tests and may provide a complementary production strategy.
Lithium brine evaporation ponds at Rincon project
OVERVIEW: AGY The Big Picture
Lithium brine evaporation ponds at the Rincon project in northern Argentina
  • Argosy’s Rincon Lithium Project is in Argentina in South America’s Lithium Triangle, home to large lithium resources
  • The company hopes to fast-track its commercial development efforts and build a sustainable lithium business

What does Argosy Minerals do?

Argosy Minerals Limited (ASX:AGY) specialises in lithium in Argentina within the prolific South American Lithium Triangle. It is run by Jerko Zuvela, a geologist and company director who has more than 23 years of experience in the resources industry.

The Argosy managing director of five years also serves as a director for Discovery Africa Limited, Sand Queen Gold Mines Pty Ltd and OZ Coal Pty Ltd.

Zuvela held chief geologist roles at a number of companies before taking on senior management and board roles after a stint as MD at Indicoal Mining Australia Pty Ltd.

He was previously an exploration geologist for Mercantile Investment Company (ASX:MVT) buy-up Murchison Metals Ltd (ASX:MMX) (FRA:32IA) and Anglo American plc (LON:AAL) (JSE:AGL) (ETR:NGLB) (OTCMKTS:NGLOY) subsidiary De Beers Sa.

What does Argosy Minerals own?

The key asset is the Rincon Lithium Project in Argentina.

Last week the company revealed a battery-grade standard high-purity lithium hydroxide (LiOH) product had been achieved during processing tests at the pilot plant and in-house laboratory in the South American nation.

The LiOH content value was 56.84%, a higher quality battery grading when compared to the standard grade of 56.5%.

This equates to a 99.61% lithium hydroxide monohydrate purity and could prompt the development of a complementary commercial lithium hydroxide production strategy for Argosy.

The Perth-based company’s processing tests results had been elicited after a Korean battery group requested samples.

Argosy’s LiOH is being prepared according to the customer’s request and will be despatched after completion.

Rincon lithium has already been demonstrated to produce high-quality lithium carbonate (LCE) processing results for the company keen on building a sustainable lithium business.

A preliminary economic assessment (PEA) for the project was released in November 2018, with the company holding potential offtake agreement discussions with a number of parties in the December quarter of 2018 and March quarter of 2019.

The discussion reaped returns, with Argosy signing a preliminary lithium carbonate sales agreement with Mitsubishi Corporation subsidiary Mitsubishi Corporation RtM Japan Ltd in March 2019.

Argosy’s offtake milestone is allowing the company to use its stage I industrial-scale pilot plant for small-scale commercial LCE production so it can make product sales to the international conglomerate.

The developer’s ore source is a series of lithium brine evaporation ponds that cover about 38 hectares.

Argosy’s current pond area is capable of generating concentrated lithium brine to support processing operations for annual plant capacity of around 1,500 to 2,000 tonnes of LCE.

The company is keen on lifting its annual rate of production at the plant from the 2,000 tonnes a year possible with its commercial operation module to 10,000 tonnes, already flagging the production expansion possibility with regulators at Salta Province Mines Department.

One option is to pursue immediate construction of a funded commercial-scale processing plant or take the modular or staged approach to commercial scale-up outlined in the company’s Rincon PEA.

Rincon is well-supported by investors who tipped in $9.2 million in support of the project in an oversubscribed renounceable rights offer which closed on March 28, 2019.

The company published its calendar year annual report to shareholders on April 1, 2019, and is expected to publish its latest quarterly reports later this month.

Argosy expected to spend $2 million in the March quarter of 2019 and earmarked $1 million for development, $200,000 for production and $150,000 for exploration and evaluation.

The company had $2.7 million cash at the end of 2018 before it banked the funds from its latest capital drive.

Inflection points

  • Korean battery manufacturer action on LiOH sample presentation

  • Revenues from preliminary Mitsubishi LCE production take agreement

  • Strategic partnerships, offtake or production take agreements and significant transactions

  • Commercialisation milestones

  • Financing successes

  • Lithium industry development and positive market sentiment

  • National government-level support for the critical mineral across the globe

  • Evolution of battery, chemicals and electric vehicle markets

Managing director Jerko Zuvela flags business opportunity with LiOH

“This initial lithium hydroxide result, together with the long-standing high-quality lithium carbonate processing results achieved highlights the pre-eminent chemical processing expertise within the company,” managing director Jerko Zuvela said last week.

“We are in the chemicals business and we continue to validate our capacity and credentials to operate in this industry.

“With our recent sales agreement with Mitsubishi RtM and upcoming commencement of customer production operations, Argosy is in a strong position to secure a key strategic relationship and interest for the potential full commercial-scale development of the Rincon Lithium Project.”

 

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