BRISBANE, Australia, April 9, 2018 /CNW/ -- Orocobre Limited (ASX: ORE,TSX: ORL) ("Orocobre" or "the Company") is pleased to provide an update on project developments, including recent results received from the brine sampling of diamond core hole CAU18 in the NW Sector of the Cauchari JV property located in Jujuy Province, Argentina.
The exploration program is being managed by JV partner Advantage Lithium Corp. ("Advantage Lithium") (TSX Venture: AAL) (OTCQX: AVLIF) who hold 75% of Cauchari. Orocobre owns the remaining 25% of Cauchari and 29% of Advantage Lithium's issued capital.
- Diamond core hole CAU18 was drilled to a depth of 359 m and intersected extensive sand dominated units, confirming the positive porosity and permeability conditions of the NW Sector extending north from CAU07, CAU16 and CAU15
- For context, recent pump-tests at hole CAU07, which intersected extensive sandy sediments, suggested flow rates of up to 36 l/s may be possible
- Results of nine brine analyses of CAU18 have been received for the interval from 165 m to 320 m depth which consists of sand and halite dominated units
- The nine CAU18 brine analyses averaged 476 mg/l Lithium and 3,727 mg/l Potassium from 165-320 m depth
- Average Mg/Li ratio of 2.5:1, very similar to the nearby hole CAU07 (2.3:1) and the producing Olaroz brine project resource (2.4:1) - very positive for utilisation of conventional or other brine processes
Managing Director & CEO Mr. Richard Seville commented, "CAU18 in the NW Sector of Cauchari confirms the extension of brine to the northern property boundary with our Olaroz project, intersecting sandy sediments and gravel representing positive extraction characteristics in this area. The Mg/Li ratio is similar to Olaroz, which is very favourable for brine processing. With upcoming results from holes CAU17 and CAU14 the joint venture will update the project resource estimate, to be followed by a Preliminary Economic Assessment (PEA)."
NW SECTOR - CAU18 Drilling Results
CAU18 was drilled and cased through the upper gravel and sandy gravel units of the Archibarca alluvial fan to a depth of 130 m. CAU18 was continued as a diamond core hole from 130 m to a total depth of 359 m. Sand dominated and halite dominated units were encountered from 130 m to 260 m depth. The interval between 260 m and 359 m intersected mostly clay and silt dominated units. Brine assays were received from nine bailed samples over a depth range from 165-320 m, returning an average of 476 mg/l Lithium and 3,775 mg/l Potassium over this 155 m interval.
The brine mineralisation, shows an excellent Mg/Li ratio of 2.5:1, and confirms the extension of elevated lithium concentrations from the northern property boundary with Orocobre (Sales de Jujuy) through to CAU15, where brine mineralisation remains open to the south. CAU18 is located 3.6 km north of CAU07 and 15 km north of CAU15. Results from CAU15 (NW Sector) and CAU11 (in the SE Sector) suggest the brine body continues south of these holes, and this area will be evaluated further following the upcoming resource estimate, providing potential for future resource expansion.
The majority of drainable porosity test results on undisturbed core samples have now been received from the GeoSystems Analysis laboratory in the United States and will be used in the upcoming resource estimate. The results have confirmed the favourable drainable porosity characteristics of the sand dominated units and are further supported by the high flow rates reported recently in CAU07 and CAU11 pumping tests.
SE SECTOR – Brine sampling activities
Brine chemistry analyses have been received from packer sampling carried out by the company on pumping test wells CAU08, 09, 10 and 11. This discrete interval sampling using a packer and low-flow pump provides information for the resource estimate and confirms the composite brine grades obtained in holes CAU08, 09, and 10 to date from pumping tests, with results from CAU11 pending.
To date results have been received from the sampling in the upper parts of these holes confirming good Li grades in the range 619 to 724 mg/l. In CAU08 results average 619 mg/l Li and 5,442 mg/l K from 60-146m; in CAU09 results average 643 mg/l and 6,141 mg/l K from 78-171 m and in CAU10 results average 724 mg/l Li and 6,319 mg/l K from 60-126 m, with deeper sampling yet to be undertaken with packer equipment.
Completion of Phase 2 Drilling and Pumping Program
Currently diamond drilling is underway on CAU14 site in the SE Sector. Brine chemistry analyses from CAU14 and CAU17 are the last results from the Phase 2 program to be included in the upcoming resource estimate.
Upcoming Phase 3 drill program
Additional deeper drilling has been planned to depths below 450 m to fully define the extent of the deeper sand unit and the base of the Cauchari salar basin. The phase 3 Program will include additional production well installations and pumping tests in the NW and SE Sectors and will follow on immediately from the Phase 2 program.
The Phase 3 deep drilling will be supported by a new drill rig (large diameter drilling capacity to beyond 600 m) that will be mobilized to the Project by mid-April. A series of holes will be completed to define the full extent of the lower (deep) sand unit for an additional update to the resource /reserve estimate to be included in the DFS planned for completion in early 2019.
Cauchari JV Development Timeline
The updated resource estimate, due to be released in Q2, will be followed by a Preliminary Economic Assessment planned for completion in June-July. Proposals have been received from internationally recognised engineering companies with lithium experience and the selection process is well advanced to allow engineering studies for the PEA to commence in mid-April 2018.
The PEA will evaluate project development options and establish the preliminary project economics, summarised in a NI 43-101 Technical Report.
The Company has completed a detailed project development schedule and budget and is fully funded through the completion of the Phase 2 program, and the updated resource estimate, the Preliminary Economic Assessment, and the Phase 3 drill program which will support the DFS targeted for early 2019.
Initiation of Restricted Share Unit program
The Company wishes to announce that in order to further align the interests of the Company's senior executives, key employees, consultants and directors with those of the shareholders of the Company, the Company has adopted a restricted share unit plan (the "Plan"). The Plan provides for the issuance of up to 1,900,000 restricted share units (the "RSUs"). Under the Plan, RSUs may be granted to directors, officers, employees and consultants of the Company (excluding investor relations consultants) as partial compensation for the services they provide to the Company. The Plan is a fixed number plan, and the number of shares issued under the Plan, when combined with the number of stock options available under the Company's stock option plan, will not exceed 10% of the Company's outstanding shares. The Plan is subject to the approval of the TSX Venture Exchange and to disinterested shareholder approval which will be sought at the next shareholders meeting of the Company. Any RSUs awarded prior to obtaining both TSX Venture Exchange approval and disinterested shareholder approval (collectively, the "Approvals") are subject to, and may not be paid out before, both approvals are obtained. Any RSU Shares issued are subject to a four month hold from date of issue. The Company's Compensation Committee and Board of Directors have approved the award of 1,750,000 RSUs to certain directors, officers, employees and consultants, subject to receipt of disinterested shareholder and Exchange approval. The 1,750,000 RSUs vest over three years based upon the achievement of certain milestones. Shareholder approval is being sought at the Company's next AGM.
For more information please contact:
Investor Relations Manager
T: +61 7 3871 3985
M: +61 418 783 701
E: [email protected]
Competent Persons Statement
The information in this report that relates to exploration reporting at the Cauchari JV project has been prepared by Mr Murray Brooker. Murray Brooker is a geologist and hydrogeologist and is a Member of the Australian Institute of Geoscientists. Mr Brooker is an employee of Hydrominex Geoscience Pty Ltd and is independent of Orocobre. Murray has sufficient relevant experience to qualify as a competent person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. He is also a "Qualified Person" as defined in NI 43-101. Murray Brooker consents to the inclusion in this announcement of this information in the form and context in which it appears.
About Orocobre Limited
Orocobre Limited (Orocobre) is a dynamic global lithium carbonate supplier and an established producer of boron.
Orocobre is dual listed on the Australia and Toronto Stock Exchanges (ASX: ORE), (TSE: ORL). Orocobre's operations include its Olaroz Lithium Facility in Northern Argentina, Borax Argentina, an established Argentine boron minerals and refined chemicals producer and a 35% interest in Advantage Lithium.
For further information, please visit www.orocobre.com.
SOURCE Orocobre Limited