5 weeks: Patagonia Lithium delays resource update for porosity testing

Jujuy Plant Application Moves Into Detailed Review

Patagonia Lithium Ltd (ASX:PL3) has cleared the first administrative hurdle for its proposed 1,000-tonne lithium carbonate demonstration plant in Jujuy, Argentina, after the application was published in Provincial Official Gazette No. 121 on 9 October. That gazettal is not the permit itself: the project now moves into detailed analysis by the Jujuy Mining Department, followed by environmental consultation and review.

The next formal step is a UGAMP meeting, currently scheduled for mid-November to early December. Patagonia’s technical team is expected to present to government departments and the Olaroz indigenous community, after which participants have up to 60 days to submit comments. The company said it is working on hydrological studies and the location of four production wells on the assumption that the demonstration plant permit will be granted, but the approval remains conditional.

The plant application gives the project a clearer regulatory pathway at a time when Patagonia is trying to convert exploration results into a development case. Its latest update follows the strong Well 8 pump test, which the company said produced 2,043 litres per hour and rapid aquifer recovery, although the broader resource work is not yet complete.

Solvent Testing Improves Demonstration Plant Assumptions

Laboratory work has produced one potentially useful design change. Sulzer Corporation’s shaker tests on brines from Well 2 achieved positive results using a solvent-to-brine ratio of 6:1, down from the 10:1 ratio used in 2024. Patagonia said the Ekosolve system captures and regenerates 100% of the solvents, meaning the result affects the initial solvent load assumed for the plant.

About 2,000 litres of brine grading 510ppm lithium has been sent to laboratories and a pilot plant in Beijing for testing and development work aimed at scaling the process to 1,000 tonnes. The company said some of that work will feed into its Scoping Report. Two expert responses for the study have been received, with three still outstanding.

Porosity Questions Push Resource Update Back

The more immediate timetable issue is geological. Patagonia has sent 27 cores for analysis after identifying a discrepancy between high porosity in core samples and two low values from BMR surveys. The work includes porosity testing, X-ray diffraction on clay samples from Well 9 and additional laboratory checks involving Geosystems Analysis, Inlab, the University of the South and ALS Laboratories. The company now expects its Mineral Resource Estimate update to be delayed by five weeks.

Well 9 itself delivered a single packer-test assay of 28ppm lithium. Patagonia said the result was expected given the sample’s specific gravity of 1.01 grams per cubic centimetre, compared with about 1.18 grams per cubic centimetre for brine containing 510ppm lithium in other wells. The company characterised the assay as indicating that the tested interval was outside the project’s higher-lithium aquifer zone, but it remains one result from one well rather than a conclusion about the entire basin. The resource update will need to reconcile the new porosity data before its effect on the project’s estimated brine volumes can be assessed.

Patagonia is also preparing an application under Argentina’s RIGI investment regime, which can provide 30-year fiscal stability for projects spending at least USD$200 million over three years. The company estimates a 10,000-tonne plant would cost USD$130 million before ancillary solar, acid and caustic plants, the demonstration facility and additional production wells. Eligibility therefore depends on the eventual scale and timing of investment, rather than the application alone.