How Did Patagonia Lithium Triple Its Formentera Resource in 6 Months?

Resource Upgrade Highlights Formentera’s Potential

Patagonia Lithium Ltd has delivered a substantial upgrade to its Formentera Lithium Brine Project in Argentina’s lithium-rich Jujuy Province, announcing a 319% increase in its Mineral Resource Estimate (MRE) to 551,400 tonnes of lithium carbonate equivalent (LCE). This leap from the previous 173,000 tonnes is driven by a marked rise in lithium metal content, specific yield, and lithium concentration within the salar’s brine aquifers.

The project’s specific yield; a critical measure of extractable brine volume; jumped by 248% to 11.85%, placing Formentera among the highest porosity lithium brine assets in the region. Lithium concentrations also improved by 13%, averaging 294 parts per million (ppm), with peak assays reaching 1,122 ppm in subsurface samples. These metrics underscore the project’s robust geological continuity and resource quality, despite the resource classification remaining predominantly Inferred due to limited drilling and unconfirmed basement contacts.

Drilling and Technical Advances

To date, Patagonia has completed four diamond drill holes totaling nearly 1,500 meters, with a fifth planned to extend to 600 meters depth in the adjacent Cilon concession. The drilling program has revealed thick, highly porous sand and gravel aquifers with exceptional lithium grades and hydraulic conductivity, supported by detailed downhole geophysical logging including Borehole Magnetic Resonance (BMR) surveys. Pumping tests have demonstrated strong brine yields, validating the aquifer’s capacity to sustain extraction.

Complementing the geological advances, Patagonia has partnered with Ekosolve to apply its Direct Lithium Extraction (DLE) technology, which has demonstrated lithium recovery rates exceeding 92% in pilot testing. This solvent extraction process promises rapid plant construction timelines and mitigates environmental risks associated with traditional evaporation ponds, such as water table disruption and magnesium contamination.

Path to Production and Economic Outlook

Building on these technical foundations, Patagonia plans to construct a 1,000 tonnes per annum lithium carbonate demonstration plant during 2025/26, with aspirations to scale up to 10,000 tonnes per annum pending regulatory approvals. The company estimates capital expenditure for the demo plant at approximately US$13-15 million, with operating costs averaging around US$4,300 per tonne of lithium carbonate produced, plus royalties and licensing fees.

At current lithium prices; around US$8,668 per tonne; this positions Formentera as a potentially economically viable project with attractive margins. Discussions with potential off-take partners, including strategic shareholders and US buyers, indicate strong market interest in the high-purity lithium carbonate product Patagonia aims to produce.

Looking Ahead – Exploration and Development

While the resource upgrade is a significant milestone, Patagonia acknowledges that the MRE remains largely Inferred, with limited Indicated resources near key drill sites. The company intends to continue drilling to improve geological confidence, delineate basement contacts, and expand the resource footprint, particularly targeting high porosity zones to the south and at depth in the Cilon concession.

Further geophysical surveys, including 2D seismic studies, and hydrological modeling will refine the understanding of the salar’s hydrostratigraphy and support optimized well placement. Environmental assessments and waste brine management strategies are also underway to ensure sustainable development.

Patagonia’s approach combines rigorous technical validation with innovative extraction technology, positioning the Formentera project as a compelling lithium asset within the competitive lithium triangle. The coming months will be critical as drilling results, demonstration plant progress, and market dynamics converge to shape the project’s trajectory.