Olaroz Project Update
  e-News Subscribe
 
 
OLAROZ LITHIUM PROJECT  

Lithium, potash, boron

The Olaroz Lithium Project consists of 118 square kilometres of tenements over a salar (salt lake) known to contain high values of lithium in brine. The project is located in the Jujuy Province in the elevated and arid Puna region in the north - western part of the country and is well served by infrastructure with access by sealed road and nearby high voltage electricity, gas pipelines and rail. The Company has rights to 100% interest in these properties by way of a purchase contract, details of which can be found in the Company prospectus.

Click on images above to enlarge

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 as it is not dominated by halite. 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, the depth of the deepest drill hole.

Potential Production Rate

Subject to the current resource being upgraded to measured and indicated resources of a similar size and grade, the current resource will support a development of an long life operation producing, in the first stage, 15,000 tonnes per annum of lithium carbonate and 36,000 tonnes of potash (potassium chloride). A boric acid by product has also been considered. The resource is also of sufficient size to allow for potential significant expansion and the exploration potential provides further upside over the long term.

Brine Chemistry

The brine chemistry is very attractive.

  • The average lithium grade at 800g/kl 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.

The grade distribution throughout the deposit indicates the potential for the first 5 to 10 years of an operation to benefit from grades significantly higher than the average grade.

Climate

The project is at 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. The project is very close to the Hombre Muerto Operation which uses solar evaporation up to very high concentration levels and has been in production since 1996.

Processing Route

Batch test work was undertaken to investigate on a number of processing routes. Assisted by detailed phase chemistry, it is concluded that the brines can be processed by a number of conventional processing routes. All of the potential routes involve using solar evaporation and precipitation of waste products with or without other reagents followed by potash recovery via differential flotation and production of lithium carbonate with soda ash.

The indicated processing routes do not require the use of high risk novel technology such as nano-filtration or new processes and as such has a lower level of technical processing risk.

Infrastructure

The project is located on the main road from northern Argentina to the major port of Antofagasta, approximately 550 kms 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 are estimated in the range of US$80m-US$100m including contingency.

Operating Costs and Operating Margin

The study indicates an operation would have low operating costs and strong operating margins and be competitive with established brine producers.

Bankable 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. With such positive conclusions, the Company has committed to undertaking a Bankable Feasibility Study into the development of an operation at Olaroz. The study is expected to cost approximately US$2m and be completed in mid 2010.

The Lithium Market

Lithium is sold as brines, compounds or mineral concentrates. For many years, the majority of lithium compounds and minerals were used in the production of ceramics, glass and primary aluminium production. More recently growth in lithium battery use has resulted in batteries gaining market share and perhaps soon becoming the leading end use of lithium. The main markets for lithium products produced by Sociedad Quimica Minera de Chile (SQM), the worlds largest producer, are ceramics and glass (21%), batteries (20%), lubricating greases (17%), pharmaceuticals and polymers (9%), air conditioning (7%), primary aluminium production (5%), and other (20%).

The lithium market has been growing at 4-5% per annum and this is forecast to continue. Current demand of approximately 80,000 tonnes per annum of lithium carbonate equivalent is forecast to rise to nearly 100,000 tonnes per annum in 2010. Growth in the United States demand for lithium has been greater, with a 79% increase since 2003. This growth has been caused by increased consumption in all end uses except aluminium production and in particular in the area of battery production.

With increased demand, prices have also been rising. Based on US customs declarations, lithium carbonate prices have increased by 59% from 2005 to 2006. Prices for lithium have reportedly increased from US$2,750 to US$5,500/t in 2006 due to increased demand for batteries. The journal Industrial Minerals reported lithium carbonate prices of US$6,000/t in 2006.

At current growth rates in the demand for lithium, a new project the size of Rincon or Olaroz will be needed every four years.

Back to Top

 

9 March 2010  Orocobre announces private placement
> READ MORE

8 March 2010  Orocobre announces high-grade lithium and potassium brine discoveries
> READ MORE

1 March 2010  Appointment of Non-Executive Director
> READ MORE

20 January 2010  Orocobre and Toyota Tsusho announce JV to Develop Salar de Oloraz Lithium-Potash Project
> READ MORE

23 December 2009  Significant expansion of land holding at Olaroz
> READ MORE

17 December 2009  Elementos IPO closes oversubscribed
> READ MORE

11 December 2009  Capital Raising
> READ MORE

26 November 2009  Salar deOlaroz Lithium-Potash Project Update
> READ MORE

19 November 2009  Significant expansion of land holding around Olaroz Lithium-Potash Project
> READ MORE

6 November 2009  Elementos Prospectus lodged with ASIC
> READ MORE

30 October 2009  Quarterly Report - Period ending 30 September 2009
> READ MORE

19 October 2009  Investor Presentation for the upcoming Elementos Limited Initial
Public Offering
> READ MORE

1 October 2009  Elementos Limited - option to acquire 100% of gold project
> READ MORE

30 September 2009  Annual Report 2009
> READ MORE

22 September 2009  Excellence in Mining & Exploration Concerence Presentation
> READ MORE

19 August 2009  Update of Proposed De-merger of Cu-Au Assets
> READ MORE

18 August 2009   Company Research Paper
> READ MORE

31 July 2009   Quarterly Report - Period ending 30 June 2009
> READ MORE

31 July 2009   Non-Executive Director Resignation
> READ MORE

30 June 2009   Non Renounceable Rights Issue - Allotment
> READ MORE

2 June 2009   June 2009 Roadshow Presentation
> READ MORE

25 May 2009   Non Renounceable Rights Issue - Notice to Shareholders
> READ MORE

22 May 2009   Prospectus - Non Renounceable Rights Issue Holders
> READ MORE

22 May 2009   Notice to Option Holders
> READ MORE

22 May 2009   Non Renounceable Rights Issue - Prospectus Lodged
> READ MORE

20 May 2009  Appointment of Director
> READ MORE

11 May 2009  Placement to Strategic Cornerstone Investor
> READ MORE

5 May 2009  Olaroz Lithium - Potash Project Scoping Study
> READ MORE

29 April 2009  Quarterly Report -Period ending 31 March 2009
> READ MORE

29 April 2009  Maiden Resource Estimate - Olaroz Project
> READ MORE

17 February 2009  Orocobre Presentation - RIU Conference
> READ MORE

16 February 2009  Marayes Agreement
> READ MORE

12 February 2009  Salar Exploration Initiative
> READ MORE

11 February 2009  Olaroz Project - Brine chemistry results & update
> READ MORE

26 October 2008 Annual Report - for period ending June 2008 ...
> READ MORE

9 September 2008 Olaroz Project - Drilling commences...  
> READ MORE

2 September 2008 Olaroz Project - Encouraging first testwork...  
> READ MORE

3 June 2008 Olaroz Project - Positive results from first sampling program...   > READ MORE

 


   
PROJECTS OVERVIEW

Orocobre has assembled a portfolio of prospective exploration tenements in Argentina.

The Argentinean projects include Olaroz (a lithium-potash-boron salar), a joint venture on other salars prospective for lithium, potash, boron and other salts.



 
Copyright 2007 © Orocobre Limited.  All rights reserved.