PUR drilling for lithium brines in South America’s lithium trian

Our lithium brine Investment Pursuit Minerals (ASX: PUR) is now a week away from drilling its project in Argentina.

PUR’s project sits inside South America’s ‘lithium triangle’ - home to ~60% of the world’s lithium reserves.

In October PUR announced a maiden 251.3kt lithium carbonate equivalent (LCE) JORC resource based ONLY on shallow 200m deep historical drill holes and recent geophysical surveys.

Next week, PUR will be kicking off its first ever drill program made up an initial 4 diamond drillholes and one pumping well.

The main objective for the drill program is to try and extend PUR’s JORC resource down to ~500-600m depths AND hopefully find higher grade resources at depth.

Site works are underway and drilling is expected to start next week.

PUR’s exploration plan:

PUR plans to drill four exploration holes down to ~500m-600m depths.

After the four holes are drilled, PUR is planning to drill ONE pumping well to determine flow rates for the project.

PUR expects each hole to take ~1 month to complete so we should see drilling newsflow through to at least the end of Q2.

Below are the drillhole locations for the first phase of drilling:

After its first phase of drilling, PUR will move onto its larger Mito tenement to the north.

Mito is PUR’s biggest landholding and sits right on the margins of the Salar.

In today’s announcement PUR confirmed that permitting was ongoing for the stage 2 drill program and that drilling is expected at this part of its project later this year.

Why we think drilling is a major catalyst for PUR -

We think that PUR drilling below 200m depths, hitting high grade lithium and multiplying its existing JORC resource will be a catalyst for a re-rate in the company’s share price.

If PUR can prove both higher grades and extensions, then its JORC resource could start catching up with companies that are capped >10x where PUR is trading today.

Right now PUR is capped at just $14.7M, whereas its South American peers are capped in the hundreds of millions of dollars.

We think the Rio Grande Salar (where PUR’s projects sit) has the potential to be one of the biggest and most high grade salars in Argentina. Ultimately this is the kind of outcome we are Invested for.

Once PUR can demonstrate this with additional drilling, we hope the company’s market cap re-rates in line with its peers.

Here is a comparison of Rio Grande with the other Argentinian salars:

(Source)

What’s next for PUR?

Phase 1 drill program 🔄

PUR expects drilling to start next week.

Pilot plant commissioning 🔄

In a recent update, PUR confirmed that its processing plant had been relocated to a new facility where commissioning works had started.

PUR expects the plant to be commissioned and ready to start producing in Q1-2024.

Once fully assembled PUR expects to be producing both battery and technical grade Lithium Carbonate - which it can send off to potential buyers/offtake partners.

PUR has mentioned that the company had received “several expressions of interest for the development of the project inclusive of off-take agreements”, so it will be interesting to see what comes after the pilot plant is up and running.