PUR successfully produces lithium carbonate in Argentina

Today our Argentina lithium Investment, Pursuit Minerals (ASX: PUR) completed a major milestone for its project - first production of lithium carbonate.

We’d been waiting for this announcement ever since PUR successfully commissioned its pilot plant, which has now produced lithium carbonate:

(Source)

The pilot plant produced 98.9% lithium carbonate equivalent (LCE) using synthetic brine matching Rio Grande Sur composition.

Processing parameters will then be optimised to achieve battery-grade 99.95% LCE.

Importantly, product qualification is now underway with initial samples to be sent to potential off-take partners - we think any offtake here could be a key catalyst for PUR, even in a depressed lithium market.

PUR says there are “several parties already requesting product samples” - which we take as a good sign.

Argentina is also shaping up to be a key battery metals jurisdiction (lithium in particular) given recent M&A activity in the country:

• Rio Tinto's $6.7BN acquisition of Arcadium Lithium
• BHP's $3.25BN buyout of Filo Corp for copper development
• Galan Lithium's rejection of a $150M offer for its Argentine lithium assets

We think PUR’s plan for staged production is the right idea in light of the current sentiment around the lithium market…

At a very high level, PUR’s plan is to develop its project in three stages.

First a 250tpa operation using PUR’s pilot plant on site, and then scale up in two stages, first to 5,000tpa then 10,000tpa.

The CAPEX estimate to get to stage 1 was estimated at US$9.751M, that would include:

• The costs to relocate the pilot plant
• Building out the evaporation ponds
• Building out all other associated project infrastructure.

Beyond stage 1 - PUR’s plan is to first build a 5,000tpa lithium carbonate plant, and then expand the project even further by building a second 10,000tpa facility.

What’s next for PUR?

🔄Relocate pilot plant to site

PUR has stated it plans to relocate the pilot plant that produced today’s lithium carbonate to its site as it prepares to commence stage 1 of its lithium production scale up.

🔲 Offtake/partnership deal?

After today’s news our eyes are now on a potential offtake or partnership deal, now that product samples will soon be in the hands of potential customers.

PUR recently mentioned that the company had “multiple requests for product samples from potential off-take partners”.

In the short term a deal either from a partnership OR from an offtake perspective could be a catalyst for PUR’s share price.

🔄 Environmental Permitting

A key hurdle to scaling up production for PUR is environmental permitting.

PUR requires environmental permits to construct its evaporation ponds on site.

We got a conceptual look at what those evaporation ponds would look like as well today:

PUR’s first target is to get to 250tpa of production using its pilot plant.

To get to those production levels PUR will need to have evaporation ponds built.