Why Did Patagonia Lithium Stop Drilling at 401m Despite 219 ppm Lithium?

Drilling Progress and Geological Insights

Patagonia Lithium Ltd (ASX, PL3) has provided an update on its Formentera concession drilling program in Argentina’s Salar de Jama region. The recently completed well JAM 25-05 reached a depth of 401 metres but was halted short of the planned 600 metres due to the presence of compacted, low-porosity clay sediments that prevented extraction of measurable lithium-bearing brines below approximately 170 metres.

The drilling campaign yielded encouraging lithium assay results from brine samples taken at shallower depths, with the highest concentration reaching 219 parts per million (ppm) at 165-170 metres. These values, while modest compared to some high-grade brines globally, confirm the presence of lithium in the basin and provide valuable data points for resource modelling.

Understanding the Low Resistivity Anomaly

One of the key technical takeaways from the drilling is the clarification of the geophysical signature observed in the area. The low resistivity anomaly detected by magnetotelluric (MT) surveys, initially interpreted as a potential indicator of lithium-rich brines at depth, has been attributed instead to conductive clays with high surface conduction properties. These clays, despite their low porosity and permeability, can drive resistivity values below 1 ohm-metre without hosting mobile brines.

Executive Chairman Phillip Thomas explained that such low resistivity zones are common in South American salars and do not necessarily correlate with lithium-bearing fluids. The consolidated clays encountered below 170 metres appear to retain only bound water, limiting their capacity to host economically extractable lithium brines.

Next Steps and Resource Implications

To better understand the subsurface conditions, six core samples have been sent to a laboratory in Buenos Aires for porosity analysis. These results will help confirm the geological interpretations and inform future drilling strategies.

Meanwhile, preparations are underway for drilling well JAM 26-06, located approximately 500 metres south of a previously successful hole (JAM 24-02). This next well aims to target zones with higher indicated mineral resource estimates, potentially improving the overall resource confidence.

Patagonia Lithium reaffirmed its existing Mineral Resource Estimate (MRE) of 551,400 tonnes of lithium carbonate equivalent (LCE), comprising both indicated and inferred categories. The company emphasized that no material changes to the assumptions underpinning this estimate have occurred as a result of the latest drilling.

Broader Context in Lithium Exploration

The Formentera project is part of Patagonia Lithium’s broader portfolio in the lithium triangle, including the Tomas III project in Salta Province and exploration concessions in Brazil targeting rare earth elements and other critical minerals. The company’s methodical approach; combining surface sampling, geophysics, and drilling; is designed to progressively de-risk the resource and advance towards commercial viability.

While the drilling results at JAM 25-05 highlight the geological complexity of lithium brine extraction in clay-rich formations, they also provide critical insights that refine exploration models and guide future investment decisions.