Resource Uncertainty and Market Timing Pose Challenges for Patagonia Lithium’s Ambitions

• Inferred mineral resource estimate of 3.816 million tonnes LCE at Formentera
• High lithium concentrations up to 1,122 ppm near surface and 580 ppm at depth
• Ekosolve DLE technology achieves over 92% lithium extraction efficiency
• Potential for 15 years production at 10,000 tonnes per annum generating AUD$169 million yearly revenue
• Experienced board and management team with strong regional expertise

A World-Class Lithium Resource Emerges

Patagonia Lithium Limited (ASX: PL3) has revealed an inferred mineral resource estimate (MRE) of 3.816 million tonnes of lithium carbonate equivalent (LCE) at its flagship Formentera project in Argentina. This substantial resource positions the company among notable lithium explorers in the lithium triangle, a region globally recognised for its rich lithium brine deposits.

The Formentera and adjacent Cilon concessions boast high lithium concentrations, with assays showing up to 1,122 ppm lithium just 2 metres below surface and sustained levels of 580 ppm at depths approaching 400 metres. These grades, combined with a high porosity aquifer zone averaging 13%, underpin the project's robust resource potential.

Innovative Extraction and Production Prospects

Patagonia Lithium is leveraging Ekosolve's Direct Lithium Extraction (DLE) technology, which has demonstrated lithium recovery rates exceeding 92% in pilot testing. This green extraction method requires less than 80,000 litres of fresh water annually, aligning with environmentally responsible mining practices.

The company’s MRE supports a production scenario of 10,000 tonnes of battery-grade lithium carbonate per year over 15 years, translating to an estimated annual revenue of AUD$169 million based on current lithium prices near USD$10,500 per tonne. The relatively short construction timeline for DLE plants, under two years, suggests Patagonia Lithium could rapidly transition from exploration to revenue generation.

Strategic Location and Infrastructure

Formentera benefits from excellent infrastructure, situated just one kilometre from a main sealed highway and 10 kilometres from the township of Jama. The proximity to established lithium projects and regional hubs enhances logistical efficiency and potential partnerships with battery manufacturers and critical mineral offtakers, particularly those targeting supply for the 2027-2030 timeframe.

Experienced Leadership and Market Positioning

The company’s board and management team bring deep expertise in lithium exploration and production, with backgrounds in major regional projects and corporate development. Notably, recent appointments include Pablo Tarantini, an executive with extensive Argentinian mining and investment experience, and Dr. José Luis Manzano, a prominent business leader with diverse interests in mining and media sectors.

Patagonia Lithium’s strategic positioning and resource scale could attract increased attention in the mergers and acquisitions market as global demand for lithium intensifies amid the energy transition and electric vehicle boom.

Looking Ahead

While the current resource is classified as inferred, further drilling and geophysical surveys are planned to upgrade resource confidence and potentially expand the resource base. The company’s focus on fast-tracking production and securing offtake agreements will be critical milestones to watch in the coming months.

Bottom Line?

Patagonia Lithium’s sizeable resource and advanced extraction technology set the stage for a swift move into production, but resource upgrades and market partnerships remain key to unlocking full value.

Questions in the middle?

• How will Patagonia Lithium advance resource classification from inferred to indicated or measured?
• What timelines and capital requirements will the company face to bring the Ekosolve DLE plant into commercial operation?
• Which battery manufacturers or critical mineral offtakers are engaging with Patagonia Lithium for supply agreements?