An Australian explorer with an established history in South America is looking to supply the burgeoning American electric vehicle (EV) battery market from its evolving lithium project in Brazil.
Latin Resources Ltd is on the verge of releasing an initial JORC-compliant resource estimate for its wholly-owned Salinas play, which is located in the key Brazilian mining state of Minas Gerais some 10 kilometres from the area’s namesake town and 600 km north-east of Belo Horizonte.
So far diamond drilling at the Colina prospect has both confirmed the high tenor lithium grades of the spodumene pegmatites in this region (with a peak of 3.22% lithium oxide) and shown the mineralisation is open along both directions of strike and at depth.
In the second half of October the ASX-listed company released the final assay results from Colina’s resource definition drilling, with the latest lithium oxide intercepts including 10.91 metres at 1.52 per cent starting at a depth of 92.31m, with 5m at 2.01% from 93m; 8.19m at 1.61 per cent from 129.76m, including 4m at 2.21 per cent from 133m; 25m at 1.47 per cent from 245m, including 10m at 1.78 per cent from 255m; 7.41m at 1.61 per cent from 148.21m, with 2.62m at 2.37 per cent from 153m; 8.7m at 2.16 per cent from 302m, with 5.7m at 2.66 per cent from 302.3m; 10.23m at 1.59 per cent from 68.43m, and; 5.80m at 1.82 per cent from 69.2m.
Earlier, at the start of the month, Latin Resources announced it had found a new zone of mineralisation at the one km long Colina West situated 500m to the west, where the lithium oxide numbers were just as compelling.
They included 1.78m at 1.33% per cent from 120.53m; 1.67m at 1.36 per cent from 275m; 18.71m at 1.32 per cent from 321m, with 4m at 1.94 per cent from 322m, and; 4m at 1.58% from 334m.
During Vertical Events’ recent RIU Resurgence Conference in Western Australia, Latin Resources executive director Chris Gale – who was adamant the lithium boom is real, the critical mineral’s high price will continue “for a very long time” and EVs are not merely a concept – said the company would eventually be targeting the growing gigafactories (to produce EV batteries) in the US, of which another 13 should become operational within the next five years.
This expansion would be driven by the new US climate bill, a part of the Inflation Reduction Act of 2022 approved by Congress and signed by President Joe Biden in August, that is set to incentivise expanding renewable energy measures and include EV tax credits.
Under this regime, the production of EVs would have to meet stringent sourcing constraints, including garnering mineral resources from either the US or countries with which it has a free trade agreement – with one of these being Brazil.
Gale said 40 new lithium mines would need to be built over the next 10 years to meet growing demand.
Ä gigafactory, he noted, would require lithium hydroxide to produce an anode, and spodumeme was “generally the best viable competitive product to use to produce lithium hydroxide chemistry”.
“There needs to be three or four lithium hydroxide plants built in the US as well,” Gale told RIU delegates.
“At the moment 95% of the processing, as we all know, for chemistry batteries is out of China.
“North America is about to change this, so it is incredibly important that we keep an eye on what is happening in North America, and Latin Resources wants to be one of the ones that supplies that raw material to America.
“The great advantage we have is our location in Brazil.
“Brazil is one of the greatest mining jurisdictions in the world. It produces massive amounts of iron ore, nickel, copper, and now wants to move into lithium.
“We have a third of the distance to travel to North America than to China or Australia. This is a great advantage for us.”
Gale said the junior currently had 16 potential offtake customers “at least”, but its board decided not to sign any memoranda of understandings until it had finished its preliminary economic assessment, which is slated for completion in March next year.
After that, if all goes to plan, the definitive feasibility documentation should be finalised by December 2023, followed by construction (2024) and production (2025).
Interestingly, in terms of the above-mentioned sourcing restraints put in place by the Biden Administration, it seems Latin Resources ticks a few boxes when it comes to Environmental, Social and Governance (ESG) guidelines.
During October, broker Bell Potter ‒ in its analysis of the junior ‒ said the Salinas project had parameters which should be supportive of ESG metrics.
For a start, preliminary metallurgical test work had indicated returned spodumeme high grades of 6.57 per cent from simple heavy liquid separation.
Second, the utilisation of dry stack tailings, as employed by nearby projects, would result in materially lower operational risks and water consumption.
Third, there would be renewable energy penetration as hydropower generation accounted – during 2020 at least ‒ for around 66% of Brazil’s electricity supply.
Finally, producing a potential high grade concentrate, and being relatively close to the North American market, was expected to have further carbon emissions benefits.
Latin Resources originally listed on the Australian bourse in 2010 to support the progression of gold and iron rich mineral sands assets in Peru.
Then, in 2013, it acquired the Borborema iron ore project in north-west Brazil, marking its first investment in the South American country.
During 2016 the company shifted its focus to lithium and announced a claim application for over 70,000 hectares covering seven exploration tenements in the Catamarca province of Argentina (prospective for lithium pegmatites) and 24,769 Ha in San Luis, Argentina.
By mid-2018, the junior had access to about 294,000 Ha of pegmatite-bearing ground prospective for lithium within the Catamarca, San Luis and Salta regions of Argentina.
A year later, in 2019, it assembled a portfolio of prospective lithium tenements in Brazil and began detailed field reconnaissance across the Montes Clarinhos, Salinas, Seletas, Rubelita and Coronel Muerta areas.
It then executed five tenement applications for the Salinas project, which is now the flagship in the company’s portfolio.
