Maricunga Lithium



Maricunga Lithium Project

Bearing Lithium has entered into a definitive agreement with Li3 Energy Inc. (“Li3”) for the acquisition of its 17.67% interest in the Maricunga Lithium Project described below (the “Transaction”). Completion of the Transaction remains subject to numerous conditions, including but not limited to: (i) approval of the shareholders of Li3; (ii) completion of satisfactory due diligence on the Project; (iii) the receipt of all required third party approvals, and specifically the approval of the TSX Venture Exchange, among others. Although Bearing believes that its expectation that the Transaction will close as contemplated is reasonable, there can be no assurance that such expectation will prove to be correct. Closing of the Transaction will also be subject to additional risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in any statements regarding the Transaction or the Maricunga Lithium Project. The information provided below is expressly qualified by this cautionary statement.

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Technical Report on the Maricunga Lithium Project Technical Report on the Maricunga Lithium Project (9108 KB)


 

Bearing Lithium & Li3 Energy Highlights:

  • Bearing Lithium (TSXV:BRZ) entered into a definitive agreement with Li3 Energy (OTCQB:LIEG) to acquire it for consideration of 16 million shares.
  • Li3 Energy's primary asset is a 17.7% interest in the Maricunga lithium project in Chile, which is free-carried to the delivery of a definitive feasibility study (DFS) by the projects’ partner.
  • The Maricunga lithium project is one of the highest grade, undeveloped lithium salars (brine) in the Americas. It is second in grade only to the Salar de Atacama, which accounts for 100% of Chile’s lithium production and about 40% of global production.
  • Over US$30 million has been invested in the project to date which has generated a JORC Measured Resource of 1.7 Mt LCE and Inferred Resource if 0.4 Mt at an average grade of 1,160 mg/L. 
  • The project is comprised of a number of tenements totaling 4,463 hectares, of which some are grandfathered under a previous mining code which allows for the immediate exploitation of lithium.
  • A significant exploration and development program is underway to de-risk the project, with US$22 million to be expended by property partner to culminate in the delivery of a Definitive Feasibility Study (DFS) in 2018. Near-term catalysts include results from process test work and a Pre-Feasibility Study (PFS) in Q4/17.

 

About the Project

The Maricunga project is located 170 kilometres northeast of Copiapo in the III Region of Atacama in northern Chile at an elevation of 3,800 metres above sea level (masl). The project is comprised of a number of tenements totalling 4,463 hectares.

The Maricunga project has seen significant past exploration, with over US$30 million expended to date.

Location of the Salar de Maricunga


Tenement Map

 

Tenement List


JORC Resource Estimate

The Maricunga project has JORC Measured and Indicated Resource of 325,000 tonnes of lithium at an average concentration of 1,143 mg/L lithium plus an Inferred Resource of 80,000 tonnes of lithium at an average concentration of 1,289 mg/L lithium. The resource was prepared by Frits Reidel, CPG, President of Flo Solutions and calculated using ordinary kriging for the chemical and drainable porosity data, estimated independently.

This JORC resource incorporates the drilling and assay work undertaken by LI3 in 2011/12, geophysical and pumping test work undertaken by MSB in 2015 on the Litio 1-6 and Cocina concession held by Li3, and drilling between September 2016 and January 2017 comprised of 9 rotary drill holes totalling 1,815 metres and 4 sonic holes totalling 613 metres plus pump tests on the Litio 1-6, Cocina, San Francisco, Salamina and Despreciada concessions. The 2016/17 program was designed to drill to a depth of 200 metres, versus the 2011/12 program which went down to 150 metres, in addition to one hole drilled to a depth of 360 metres. The Measured and Indicated Resource was defined to a depth of 150 m within the Litio 1-6 concession and to a depth of 200 metres within the Cocina, San Francisco, Salamina and Despreciada concessions. The Inferred Resource is defined between 150 metres and 200 metres depth, underlying the Litio 1-6 properties. Details of the resource are presented in the table below.

 

Maricunga Resource Estimate

 

 

Expressed in more common compounds, the Measured and Indicated resource total 1.7million tonnes of lithium carbonate equivalent (“LCE”) plus an Inferred resource of 0.4 million tonnes of LCE. In addition, there is a significant potash resource of 4.5 million tonnes of potassium chloride (KCl) within the Measured and Indicated Resource plus an Inferred resource of 1.2 million tonnes of KCl. A breakdown of the resource as expressed in common compounds is presented below. The resource has magnesium-to-lithium ratios of 6.5:1 and a potassium-to-lithium ratio of 7.3:1.

 

Maricunga Resource Estimate Expressed in Common Compounds

 

 

All existing lithium currently being mined is sourced either from brines, for which Chile and Argentina dominate global production, or hard rock conventional mines, for which Australia dominates global production. In comparison of the two, brines typically are easier and less capital intensive to explore and delineate resources, can have shorter timeframes to develop, and have lower operating costs once in production. For the aforementioned reasons, brine projects are typically towards the lower end of the cost curve as seen below.

 

 

The Maricunga Joint-Venture Agreement

  • The newly formed joint-venture agreement (c.f. September 13th, 2016) outlines a 50% interest for Lithium Power International Ltd (ASX:LPI), a 32.3% interest for Minera Salar Blanco (MSB; private co) and a 17.7% interest for Li3 Energy (OTCQB:LIEG). Bearing Lithium is acquiring Li3 Energy and it's underlying interest in the project.
  • Under the agreement, Lithium Power International will fund a US$22 million 2-phase exploration and development program, culminating in the delivery of a Definitive Feasibility Study (DFS) in 2018. The work program will include the drilling of 16 exploration wells, 2 pump test wells, an updated JORC-compliant resources, the construction of a lithium and potash pilot plant, evaporation ponds, and other associated infrastructure, plus an Environmental Impact Assessment (EIA).
  • The Board and Technical Committee for the joint-venture holding company will be split between LPI, MSB and Bearing Lithium based on each company’s respective shareholding in the Maricunga JV.

 

Maricunga Joint Venture Ownership Structure

 



Maricunga JV Development Timeline


 

Chilean Mining Law & Pathway Forward

  • In Chile, lithium is considered “strategic” and therefore under the current mining law, it is a non-concessible substance
  • Only mining exploitation concessions initiated before 1979 are authorized for the exploitation of lithium. The Cocina, San Francisco, Salamina, and Despreciada mining concessions fall under this category (also referred to as “old code” tenements / claims)
  • The Chilean government acknowledges that it is time to redefine the strategic categorization of lithium and new government has lithium as a priority
  • In June 2014, the government established the National Lithium Commission to recommend a new State Policy for the exploitation of lithium and promotion and development of new projects
  • The recent announcements by the Chilean government provide positive steps for the lithium industry in Chile.Government is committed to provide mechanisms for non-grandfathered lithium claims to advance their projects and Chilean President directly instructed Codelco to move forward with its Maricunga and Pedernales lithium claims to promote new lithium production.
  • In early 2017, Codelco announced it had formed a lithium subsidiary to facilitate a process is its currently running to identify a partner for it’s lithium projects, for which it anticipates to announce by year-end 2017. In addition, Codelco was recently awarded a permit by the Chilean Nuclear Energy Commission (CChEN) to extract up to 1.73 Mt of lithium carbonate (325,045 t Li) from it’s concessions in the Maricunga salar.
  • Government strategy fits well Bearing/MSB plan to advance “old code” claims as a starter project
  • Government initiatives bring Chile to the forefront to advance lithium production in one of the best jurisdictions worldwide, attracting world class strategic partners
  • In early 2017, the Government granted Albemarle (NYSE:ALB) an amendment of it’s lithium production rights with the Chilean Economic Development Agency (CORFO) to expand its quota to 80,000 tonnes annually of technical and battery grade lithium sales over the next 27 years.



Current Projects and Opportunities

Maricunga Lithium    Fish Lake Valley    Commander Transaction    HY / Jay