PNN moves to finalise JV on Argentine lithium project

Our Investment Power Minerals (ASX: PNN) just put out an update on progress at its JV’d Argentinian lithium project.

While we are mainly invested in PNN for its rare earth element (REE) assets, PNN also holds a lithium brine project in Argentina’s renowned lithium triangle.

Lithium prices are up recently and we have seen lithium small caps start to move over the past few weeks.

We think PNN could benefit from some of the capital flowing back into lithium stocks over the coming weeks.

Today, PNN finalised the documentation for its Rincon JV with partner Navigate Energy.

Next PNN will go through the formal regulatory approvals process to have the asset transferred into the JV entity so that the US$4M from the JV agreement can progressively be released (from Navigate to the JV accounts).

PNN’s Rincon project has a JORC resource of 292,564t LCE and a robust preliminary economic assessment (PEA) to scoping study standard.

(Source)

Importantly for PNN, the Rincon project will have access to all important fresh water from its Pocitos project which is also being transferred into the company created for the JV.

The Rincon project has access to rail to either side of the continent, power and fresh water.

Fresh water is key to lithium brine processing and PNN made it clear in the announcement the value in this alone, it referenced an announcement back in February where the Pocitos project was included in the JV.

What else is PNN up to?

US Heavy Rare Earths Project in California

PNN also has an option to acquire a heavy rare earths project in California, around 195km from $17BN capped MP Materials.

MP Materials is currently constructing the “10X advanced magnet production facility” that MP plans to build with the funds from the Department of War.

Once that facility is online, MP will need to look to secure heavy rare earth feedstock to feed the plant.

We have been pointing out for months that MP Materials’ rare earths mine has plenty of light rare earths, but is lacking in HEAVY rare earths which are ALSO needed to produce advanced magnets.

We covered this in a weekender article which you can read more on here: The USA’s great hope for rare earths mining and advanced battery production, MP Materials, confirms they need new supply of heavy rare earths in Q3 earnings call Q&A

PNN’s Gamma Heavy REE Project may be in an advantageous position to help supply, it has managed to map 15 of the 18 historic drilling sites, where drilling was last completed in 1976.

So we await the results of these, with sampling having finished earlier this month which we covered here.

Historic high grade REE results from the project include:

(Source)

Brazil - Santa Anna Niobium-REE-Gallium Project

PNN also has a REE project in Brazil that currently has drilling underway.

Earlier in the week, PNN also put out an update on the gallium potential of this project, where it is looking into how this can be processed, we covered that announcement here.

PNN recently put out assays from shallow drilling here, with a deeper 10,000m RC drilling program set to get underway this month which we covered here.

Here are some of the drilling results from the auger drilling program released earlier in the month:

(Source)

This drilling program will also be aiming to prove that PNN’s REE project here is hosted in carbonatites, the same host structure of the REE’s as MP Materials’ project, $16BN Lynas and also one of our Investments, SGQ.

What’s next for PNN?

🔄 Complete the acquisition of its US rare earths project

While the focus of today’s announcement was the rare earths project in Brazil, PNN is also completing the acquisition of a Rare Earth Project in California, USA

Read more on both the assets in our initiation note here: Our New Investment: Power Minerals Ltd (ASX: PNN)

Next we want to see PNN acquire its US rare earths project and start target generation works.

PNN will need to go to a shareholder vote to approve the deal so the next thing we should see is a notice of meeting to call the meeting where the vote will take place.

Here are the milestones we want to see PNN start as soon as the acquisition is completed:

Objective 1: Target Generation on US rare earths project

We want to see PNN sample, map and run geophysics on its US asset to identify priority drill targets.

Milestones:

🔲 Mapping and sampling (soil and rock chips)

🔲 Geophysics

🔲 Drill targets confirmed

🔄Drilling at Brazilian rare earths project

We want to see PNN start deeper RC drilling this month.

We also want to see PNN drill out and define a maiden JORC resource estimate in Brazil to enable comparison to peers.

Here are the milestones we are tracking on PNN’s Brazilian rare earths project:

Milestones:

🔲 Geophysics/Geochemistry work

🔄 Drilling starts

🔄 Drilling results

🔲 Maiden JORC resource estimate