Orocobre Announces the Maiden Resource for the Salinas Grandes Lithium-Potash Project
March 06 2012 - 5:52PM
Marketwired Canada
Orocobre Limited (TSX:ORL)(ASX:ORE) (the Company or Orocobre) reports completion
of the maiden resource estimate and results of initial pumping tests for the 85%
owned Salinas Grandes Lithium-Potash project ("Salinas Grandes") in Salta
Province, North West Argentina.
Murray Brooker, independent hydrogeologist, has estimated an inferred resource
of 56.5 million cubic metres of brine at 795 mg/L lithium and 9,550 mg/L
potassium which is equivalent to 239,200 tonnes of lithium carbonate and 1.03
million tonnes of potash (potassium chloride) based on 5.32 tonnes of lithium
carbonate being equivalent to 1 tonne of lithium and 1.91 tonnes of potash being
equivalent to one tonne of potassium.
Details are given in the table below.
--------------------------------------------------------------
Brine body parameters
--------------------------------------------------------------
Resource Average Mean Brine
Category Area thickness specific volume
km2 m yield % Million m3
--------------------------------------------------------------
Inferred
resource 116.2 13.3 4.1% 56.5
--------------------------------------------------------------
----------------------------------------------------------------------------
Average resource concentrations Tonnes contained metal
----------------------------------------------------------------------------
Resource
Category Lithium Potassium Boron
mg/l mg/l mg/l Lithium Potassium Boron
----------------------------------------------------------------------------
Inferred
resource 795 9,547 283 44,960 539,850 12,100
----------------------------------------------------------------------------
The estimate extends to an average depth of 13.3 meters, and applies the
company's property boundaries and a 1,000 mg/l Li cut-off from the extensive
surface pit sampling data to establish peripheral resource boundaries. No
internal cut-off boundaries have been used because it is inappropriate to apply
them in a fluid resource where extraction will cause mixing. The weighted
average specific yield used is 4.1%.
The shallow brine body has attractive grades and, as previously reported,
excellent chemistry, with a low magnesium to lithium ratio of 2.5, a high
potassium to lithium ratio of 12.5 and a low sulphate to lithium ratio of 5.8 in
the central area of drilling, rising to 10.6 for the area covered by all the
company properties over the salar. Test work since late 2010 suggests high
recoveries of both potassium and lithium could be expected using a simple, low
operating cost, process route. Laboratory scale testing has produced potassium
(82-89% KCl), prior to washing to obtain +95% KCl.
The low sulphate levels of the Salinas Grandes brine indicate that potash
recovery would be high and as a co-product of lithium carbonate production with
potentially eight tonnes of potash produced for each tonne of lithium carbonate
produced.
Introduction
The Salinas Grandes Project is located 70 km directly south east of the
Company's flagship Salar de Olaroz lithium-potassium project (Figure 1) and is
predominantly within the Province of Salta, Argentina.
http://www.orocobre.com/Maps/Salinas_Olaroz_Fig1_05March12.jpg
Over the past 15-18 months, field investigations including 47 auger holes, 12
diamond drill holes, pumping tests and processing investigations have been
undertaken. This work provides the basis of the resource estimate, by
independent consulting hydrogeologist, Murray Brooker, and other preliminary
conclusions presented in this announcement.
Geology, Data and Interpretation
Orocobre drilled a total of 12 diamond drill holes in the Salinas Grandes salar
to an average depth of 71.4 meters, with certain holes as deep as 180 meters.
Diamond core samples were sent to the British Geological Survey ("BGS"), with a
total of 117 samples analysed for total porosity (Pt) and specific yield (Sy).
The Sy analyses provided mean values for sands (0.16), silt mixes (0.04) and
clays (0.02) subsequently applied in the resource modelling.
Interpretation of diamond drilling data established six lithological units to
the base of drilling. Halite (salt) reaches a maximum thickness of 0.5 m in the
southern central part of the salar. Beneath the surficial halite, Unit B
consists of sand, silt and clay, with an increasing proportion of sand on the
northern margin of the salar. Unit C is a black to green organic rich clay and
silt. Unit F at the base of drilling includes medium to coarse sand and
conglomerate units. Units D through F may be part of clastic sedimentation from
the alluvial fan to the north of the salar. Units B and the upper levels of Unit
C host the shallow brine resource.
Diamond drilling established that lithium, potassium and boron concentrations in
brine are elevated (generally exceeding 600 mg/l Li) in the upper 6-20 meters of
the Salinas Grandes salar. However, diamond drilling showed that concentrations
decrease with depth, with only isolated Li-bearing intervals (concentrations
generally less than 500 mg/l Li) to depths of approximately 70 m. On this basis
a resource has only been estimated for the shallow part of the salar.
The Salinas Grandes resource estimate is based on geological controls from the
12 diamond drill holes and 47 solid stem auger holes, with geochemistry from the
brine samples bailed from the auger holes. 44 of the 47 auger holes lie within
the resource area. These holes were drilled to a depth of 12 meters,, except for
two 16 meter and one 20 meter holes. Brine composite samples were taken every 4
meters during the auger drilling. Results for each auger hole were previously
presented in the company press release dated November 15, 2011.
The auger holes were drilled on a north-south oriented grid, with an average
drill hole spacing of 1.7 km, in the central part of the salar. Auger drilling
was restricted to the Province of Salta, where all drilling approvals were
previously obtained. Geological samples were logged and results compiled on
geological sections, which show a significant increase in sand on the northern
margins of the salar where sand has been sourced from the northern alluvial fan.
Locations of the auger holes are shown in Figure 2 below.
It should be noted the composite values from auger drilling are influenced by
the lithium concentrations in each lithological unit and the permeability of
individual lithological units, with higher permeability units influencing brine
sample compositions more than lower permeability units.
The shallow brine body is hosted in a sequence of silt,clay and sand units, with
an increase in sand content in the north of the salar. Halite is limited to a
maximum thickness of 0.5 meters from surface in the center-south of the salar.
The elevated brine distribution encountered during auger sampling correlates
well with the distribution of elevated lithium values from original pit
sampling.
Resource Estimation
The areal extent of the resource was controlled by the location of pit samples,
with lithium values of 1,000 mg/l or greater within the salar salt pan where
auger drilling was undertaken. Brine sample results and lithological information
collected during the auger drilling was used to calculate a resource for the
shallow brine zone. The mean Sy values from the BGS analyses were used to
calculate a weighted Sy value for each auger hole, based on the lithologies and
thicknesses recorded. The weighted Sy data was used to calculate an equivalent
brine thickness and an equivalent brine volume at the location of each auger
hole, based on the interpreted thickness of the shallow brine zone.
The mass of lithium (Li), potassium (K) and boron (B) for the square metre
centred on each auger hole was calculated by multiplying the equivalent brine
thickness (converted to a volume in litres) by the concentration in g/l of each
element of interest in the auger hole. This mass data from the auger holes was
then kriged across Orocobre's Salinas Grandes tenements to produce concentration
maps of kg/m2 for Li, K and B. The sum of the individual grid cells provides the
total resource mass as presented in the table on page 2 of this press release.
Data Collection and QA/QC
Obtaining high quality samples in the field and ensuring that subsequent
analysis of the samples was carried out to a high standard was considered of
great importance considering the technical challenges of sampling fluids
(brines) and semi-consolidated sediments.
Further information and mapping of the location of the auger drilling at Salinas
Grandes is available on http://media3.marketwire.com/docs/ORL_drillingmap.jpg
The initial diamond drilling program at Salinas Grandes salar was conducted with
lexan tubes in the place of the triple tube splits, to maximize core recovery
and geological understanding. Notwithstanding the best efforts of geologists and
contractors, core recoveries averaged 67%. Down-hole geophysical logging was
undertaken on some diamond drill holes to provide additional geological
information. Fluorescein dye was used in the drilling fluid, to indicate whether
brine samples taken with a bailer during the drilling were contaminated with
drilling fluid. Core samples from diamond drill holes were used for measurements
of total porosity (total contained fluid) and specific yield (recoverable
fluid), with measurements made at the British Geological Survey laboratories
using recognized techniques. As a further check on brine samples obtained by
bailing during diamond drilling brine was also extracted from core samples and
analysed.
Chemical analyses were undertaken by Alex Stewart Assayers (Argentina) S.A.
("ASA") in Mendoza, Argentina. This laboratory has extensive experience
analysing brines from salar projects. They are ISO 9001:2000 accredited and
operate their own internal standards consistent with ISO 17025. Standards and
duplicate samples were used extensively, with laboratory- prepared and field
standard samples submitted to the laboratory comprising 17% of the samples
submitted and duplicates a further 7% of the total samples.
With minor exceptions, analytical values of the standards fell within +/-10% of
the standard values for samples in the diamond drilling, auger and pump testing
programs. Duplicate samples showed a high level of sample repeatability
(precision), with all but 5 sample pairs falling well within +/-10% limits. Ion
balances confirm the general quality of the ASA analyses. Additionally, six
duplicate samples were analysed at the University of Antofagasta to compare with
the ASA sample values. These sample pairs show average reproducible percentage
differences of 6% for lithium and potassium, with respective maximum values of
13 and 9 % from individual samples. Overall the analyses are considered to be of
acceptable quality for the inferred resource estimate, based on the results of
the QA/QC samples.
Pump Testing
Pump testing of auger drill holes determined hydraulic conductivities (K values)
in the shallow resource zone averaged 3 m/day, with the exception of one hole
which had a substantially higher K value (approx. 50 m/day) and may reflect a
more permeable channel within the salar. The pump tests were carried out with
low flow rates (generally less than 1.5 l/s), due to the small hole and casing
size and related equipment limitations.
To better understand the behaviour of pumping from the shallow brine unit 4 pump
tests on purpose constructed large diameter test production bores at different
locations across the salar are planned for the next phase. These will evaluate
brine extraction and the stability of brine grade over a long period of time, up
to a year, to better understand the potential for commercial production.
Provided that adequate pumping rates can be sustained over time with stable and
economic lithium and potassium grades, the company anticipates undertaking
further drilling and a preliminary economic assessment for the project.
Supporting technical report
The resource estimate summarized in this announcement has been prepared by
independent hydrogeologist Murray Brooker, addressing the standards set out in
the Canadian Securities Administrators' National Instrument 43-101. A technical
report complying with National Instrument 43-101 and providing a detailed
explanation of data collection, QA/QC and the resource estimate will be filed on
Sedar within 45 days of the release of this announcement.
Management Commentary
Orocobre's Managing Director, Richard Seville, stated: "We are encouraged by the
completion of the initial resource estimate of 239,200 tonnes LCE (lithium
carbonate equivalent) and preliminary pumping tests for the project. This allows
us to move forward with a good basic understanding of the project's attributes
and how Salinas Grandes can best contribute to the overall value of the
company."
"The next stage is to undertake long term pumping tests in 4 locations within
the shallow resource. Provided that adequate pumping rates can be sustained over
time, with stable and economic lithium and potassium grades, the company
anticipates undertaking further drilling and a preliminary economic assessment
for the project."
"The shallow brine body has attractive grades and excellent chemistry, with a
low magnesium to lithium ratio, a high potassium to lithium ratio and low
sulphate levels. Orocobre has been conducting evaporative concentration of this
brine for over a year, and these chemical characteristics allow use of simple
processing techniques with high recoveries and low operating costs."
"The low sulphate levels of the Salinas brine mean that potash recovery would be
very high as a co-product of lithium carbonate production, with potentially
eight tonnes of potash for every tonne of lithium carbonate production."
"The proximity of Salinas Grandes to our flagship Olaroz Project has the
potential for operating synergies, including the option to process concentrated
Salinas Grandes lithium brine at an expanded lithium carbonate plant at Olaroz
after completing potash recovery", Mr Seville said.
About Orocobre Limited
Orocobre Limited is listed on the Australian Securities Exchange and Toronto
Stock Exchange (ASX:ORE)(TSX:ORL) and is the leading lithium-potash developer in
the lithium and potassium rich Puna region of Argentina. For further
information, please visit www.orocobre.com.
Competent Person's and Qualified Person's Statement
The technical information in this announcement has been prepared by Murray
Brooker. Murray Brooker is a geologist and hydrogeologist and is a Member of the
Australian Institute of Geoscientists. Murray has sufficient relevant experience
to qualify as a competent person as defined in the 2004 edition of the
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves. He is also a "Qualified Person" as defined by Canadian Securities
Administrators' National Instrument 43-101. Murray Brooker consents to the
inclusion in this announcement of this information in the form and context in
which it appears.
Additional information relating to the Company's Salinas Grandes project is
available in the existing technical report entitled "Technical Report - Salinas
Grandes Project, Argentina" dated April 30, 2010, which was prepared by John
Houston.
Caution Regarding Forward-Looking Information
This report contains "forward-looking information" within the meaning of
applicable securities legislation. Forward-looking information contained in this
report may include, but is not limited to, the estimation and realization of
resources at the Salinas Grandes project, the viability, recoverability and
processing of such resources, potential operating synergies between the Salinas
Grandes project and the Olaroz project, and other matters related to the
development of the Salinas Grandes project.
Such forward-looking information is subject to known and unknown risks,
uncertainties and other factors that may cause actual results to be materially
different from those expressed or implied by such forward-looking information,
including but not limited to the risk that further funding may be required, but
unavailable, for the ongoing development of the Company's projects; changes in
government regulations, policies or legislation; fluctuations or decreases in
commodity prices; the possibility that required permits may not be obtained;
uncertainty in the estimation or economic viability of mineral resources;
general risks associated with the feasibility and development of the Salinas
Grandes project; unexpected capital or operating cost increases; the risk that a
definitive joint venture agreement with Toyota Tsusho Corporation in respect of
the Company's Olaroz project may not be completed; uncertainty of meeting
anticipated program milestones; as well as those factors disclosed in the
Company's Annual Information Form for the year ended June 30, 2011 filed at www
sedar.com.
The Company believes that the assumptions and expectations reflected in such
forward-looking information are reasonable. Assumptions have been made
regarding, among other things: the Company's ability to carry on its exploration
and development activities, the timely receipt of required approvals, the prices
of lithium and potash, the ability of the Company to operate in a safe,
efficient and effective manner and the ability of the Company to obtain
financing as and when required and on reasonable terms. Readers are cautioned
that the foregoing list is not exhaustive of all factors and assumptions which
may have been used.
There can be no assurance that forward-looking information will prove to be
accurate, as actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not place undue
reliance on forward-looking information. The Company does not undertake to
update any forward-looking information, except in accordance with applicable
securities laws.
ABN 31 112 589 910
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