Maricunga Lithium



Maricunga Lithium Project

Bearing Resources has entered into an 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 both Bearing and Li3; (ii) satisfactory settlements with certain creditors of Li3; (iii) completion of satisfactory due diligence on the Project; (iv) 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.

Bearing Maricunga - One page summary Bearing Maricunga - One page summary (2056 KB)

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


 

Bearing Resources & Li3 Energy Highlights:

  • Bearing Resources (TSXV:BRZ) entered into a definitive agreement with Li3 Energy (OTCQB:LIEG) to acquire it for consideration of 16 million shares.
  • Li3 Energy 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 and has led to a resource prepared by Li3 Energy which is being treated by Bearing as a historical estimate as defined by National Instrument 43-101*. This historical resource inlcudes a measured resource of 0.60 Mt LCE and inferred resource of 0.06 Mt LCE, both of which are at an average grade of 1,250 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.
    * Bearing has not completed the work required to independently analyze and verify the results of the previous operators nor has a qualified person completed sufficient work to classify the estimates as current mineral resources or mineral reserves. The company believes these historic estimates provide an indication of the potential of the property and are relevant from a continuing exploration perspective. The historical resource occurs on the Litio concession and is not grandfathered ( Read the disclosure)
  • A significant exploration and development program is underway to de-risk the project, with US$22 million to be expended by property partners to culminate in the delivery of a Definitive Feasibility Study (DFS) in 2018. Near-term catalysts include exploration results from 16 wells, pump tests from two production wells, an updated resource estimate in H1/17, the construction and operation of evaporation ponds and a pilot plant.

 

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


Historical Resource

The Maricunga project has a historical resource that includes a measured resource of 574,064 tonnes of lithium carbonate and 1,482,638 tonnes of potash plus an inferred resource of 56,368 tonnes of lithium carbonate and 145,771 tonnes of potash*.

* Bearing has not completed the work required to independently analyze and verify the results of the previous operators nor has a qualified person completed sufficient work to classify the estimates as current mineral resources or mineral reserves. The company believes these historic estimates provide an indication of the potential of the property and are relevant from a continuing exploration perspective. The historical resource occurs on the Litio concession and is not grandfathered
Disclosure for Historical Resource

The historical resource mentioned above indicates an average grade of the Maricunga brine of 1,250 mg/L lithium and 8,970 mg/L potassium with magnesium-to-lithium ratios of 6.6:1 and a potassium-to-lithium ratio of 7.2:1. For comparative purposes, these grades and ratios are presented in comparison with other producing and development brine projects in Chile and Argentina in the following table.

 

Historical Resource Summary: Contained Compounds (upper) and Average Concentrations (lower)


 

Comparison of Various Brine Projects



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).
  • 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 Li3 Energy from the outset, 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 Fransisco, Salamina, and Despreciada mining concessions fall under this category (referred herein as “old code” tenements / claims) and will be the focus of initial exploration and development efforts. The Historical Resource falls within adjacent, non-grandfathered, Litio concessions.
  • 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. The 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.
  • 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.
  • Government recently 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 million 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