Patagonia Lithium reported promising lithium assay results from ongoing drilling in Argentina and has secured a strategic funding partnership to support its next development phase.
- Drilling at Formentera/Cilon yields lithium assays up to 219ppm
- Well six drilling underway with geophysical surveys planned
- No exploration activity conducted in Brazil during the quarter
- Strategic partnership signed with Ameerex Corporation for funding
- Cash balance at $1.55 million with exploration expenditure of $492k
Quarterly Drilling Progress in Argentina
Patagonia Lithium Limited (ASX, PL3) has provided an update on its December 2025 quarter activities, highlighting continued progress at its flagship Formentera/Cilon lithium brine projects in Argentina. The company commenced drilling well five in late November 2025, reaching 400 metres before encountering a clay interval that halted progress. Assay results from this well revealed lithium concentrations up to 219ppm, a promising indication for resource expansion.
Following this, well six commenced drilling in mid-January 2026 and has reached 210 metres depth with four packer assays collected for analysis. The geological team plans to complete this well to a target depth of 600 metres, followed by a BMR gamma survey and a passive seismic survey aimed at better defining the basement geology beneath the aquifers. These geophysical surveys are critical to refining the mineral resource estimate and guiding further exploration.
Brazil Exploration and Rare Earth Elements Status
In contrast to Argentina, Patagonia did not undertake any exploration activities in Brazil during the quarter. The company holds several granted concessions targeting rare earth elements (REEs) such as holmium, lutetium, and yttrium oxides, which have applications in magnets, lasers, ceramics, and medical industries. While no fieldwork was conducted, the company notes the current industrial-grade holmium oxide price in China remains robust at approximately USD 59 per kilogram, underscoring the potential value of these assets.
Financial Position and Strategic Partnership
Patagonia Lithium ended the quarter with a cash balance of AUD 1.55 million. The company spent AUD 492,000 on exploration activities, primarily related to drilling preparations and supplies. Corporate costs included director fees and payments to entities related to directors, reflecting ongoing governance and operational expenses.
Significantly, Patagonia has entered into a strategic partnership with Ameerex Corporation, aiming to develop funding strategies for production wells and a first-phase lithium carbonate plant with a capacity of 1,000 tonnes. This partnership involves collaboration with executives based in Qatar and the USA, potentially enhancing Patagonia’s capital raising capabilities and supporting its transition from exploration to production.
Resource Estimates and Outlook
The company reaffirmed its Mineral Resource Estimate (MRE) of 551,400 tonnes of lithium carbonate equivalent (LCE), comprising 14,800 tonnes indicated and 536,600 tonnes inferred, with no material changes since the July 2025 upgrade. The ongoing drilling and geophysical surveys are expected to provide further data to refine and potentially increase this resource base.
Looking ahead, Patagonia plans to complete the current drilling program soon, after which exploration expenditure is anticipated to decrease. The company remains confident in its operational continuity, supported by the strategic partnership and planned fundraising activities. However, it acknowledges that if funding falls short, corporate and exploration activities will be scaled back accordingly.
Bottom Line?
Patagonia Lithium’s latest drilling success and strategic funding alliance position it well for advancing towards production, though upcoming assay results and capital raises will be critical.
Questions in the middle?
- What will the assay results from well six reveal about lithium concentrations?
- How will the passive seismic survey impact the understanding of the resource potential?
- What are the terms and expected timeline for capital raising through the Ameerex partnership?