Toyota
Tusho Joint Venture
In January of 2010, Orocobre agreed to establish a joint venture
with Toyota Tusho, a Toyota Group company, to develop the Olaroz
project. Toyota Tusho will provide US$4.5 million to fund the
completion of the Definitive Feasibility Study (DFS), which
is expected to be completed in the third quarter of 2010. Toyota
Tsusho will then acquire a 25 percent equity interest in the
joint venture at a cost based on the NPV estimated from the
DFS, and will also be responsible for securing a Japanese government-guaranteed
low-cost debt facility for at least 60 percent of the Project’s
development costs.
Initial commercial production at Olaroz is expected to begin
in early-2012.
Geology
and Resources The geological sequence is
a recent sedimentary sequence composed of poorly consolidated
fluvial and lacustrine clastic sediments. These inter-bedded
sands, silts, clays, and minor halite units occur beneath
the current halite crust.
Within the top 55m from surface, an inferred resource of
1.5 million tonnes of Lithium Carbonate equivalent
and 4.1 million tonnes of Potash has been estimated
by independent consultants Geos Mining.
Exploration Potential
Typical Halite-dominated salar sequences have highly predictable
hydrogeological properties. Specific yield (the amount of
free draining brine) within the near-surface (0-15m) environment
in recently deposited Halite is in the range of 8-12%. However,
specific yields decline rapidly beneath this level, due to
overburden pressure and salt crystallisation, to values of
around 3%-5% at 40-50m depth. This results in halite-rich
salar deposits having an overall specific yield of around
6-8% in the top 40-50m.
Olaroz is different in that it is not dominated by halite.
As a result, the specific yield of sand and sandstones do
not decline nearly as rapidly with depth, and thus the zone
beneath the clay layer (used as a lower boundary in the current
resource estimate) is an exciting exploration target. This
zone has already been intersected by three drill holes that
have identified a number of potential sandy aquifer horizons.
Drilling has also shown the salt lake to be at least 200m
deep , with subsequent gravity work indicating the basin reaches
a depth of 600m (see geological model of basin above).
Potential Production Rate
Subject to the current resource being upgraded to measured
and indicated resources of a similar size and grade, Olaroz
will support the development of an long life operation producing
15,000 tonnes per annum of Lithium Carbonate and 36,000 tonnes
of Potash in the project’s first stage. The resource
and deeper exploration potential is also of sufficient size
to allow for potential significant expansion in the future.
Brine Chemistry
The brine chemistry at Olaroz is very attractive:
- At 800g/kl, the average Lithium grade is similar to the
Hombre Muerto Operation and approximately double the grade
of the Silver Peak Operation and the Rincon Salar.
- The Mg:Li ratio is also low (which is desirable for processing)
at around 2.8, compared to Atacama, Rincon and Uyuni at
6.4, 8.6 and 19 respectively. Only Silver Peak and Hombre
Muerto are lower at 1.4.
- The sulphate levels are such that soda ash may not be
required for Magnesium or Calcium removal, which is of considerable
cost benefit.
Climate The
project is at an altitude of approximately 3,900m. The average
temperature is approximately 8 degrees centigrade. Precipitation
is less than 100mm/annum. Average wind velocity is approximately
25km/hr. These conditions and low cloud cover make it suitable
for solar evaporation processes.
Processing Route
Field test work confirms that Oloraz brines can be economical
processed utilizing an adaptation of the proven Silver Peak
processing sequence.. This processing route utilizes solar
evaporation and precipitation of waste products with the addition
of locally available lime, followed by potash recovery via
differential flotation and production of Lithium Carbonate
with soda ash.
The result is a low risk, low cost end product that will meet
industry needs, and allow Orocobre to be competitive with
existing low cost brine producers.
Infrastructure
The project is located on the main road from northern Argentina
to the major port of Antofagasta, approximately 550kms by
road to the west. This will provide the export route for production.
40kms to the north of the salar is a major gas pipeline. The
operation is supported by the provincial capital of San Salvador
de Jujuy and Salta, 270kms and 400kms by road to the east.
Capital Costs.
Capital costs for an operation producing 15,000 tpa Lithium
Carbonate and 36,000 tpa of Potash are estimated to be in
the range of US$80m-US$100m, including contingency. With the
company’s joint venture agreement with Toyota Tsusho
there is a clear path forward for the development of the project
and additional funding will not be necessary based on current
financial modelling.
Operating Costs and Operating Margin.
The company’s scoping study and subsequent work indicates
the Olorz operation would have low operating costs and strong
operating margins and be competitive with established brine
producers.
Definitive Feasibility Study
The scoping study indicates that the Olaroz Project has the
potential to be a highly attractive project with strong investment
returns and low technical risks. Orocobre has joined forces
with Toyota Tsusho to fund the Definitive Feasibility Study
and other pre-development activities. The study is expected
to be completed by the end of 2010.
Back to Top
|
