Argosy’s Rincon project clears major engineering hurdles

Rincon resource and DFS move forward

Argosy Minerals Limited (ASX:AGY) has used the September quarter to push its 12,000-tonne-per-year Rincon Lithium Project closer to a definitive feasibility study, completing major process testwork while upgrading the project’s JORC Mineral Resource Estimate to 790,000 tonnes of Li2CO3. The result includes 600,000 tonnes in the Indicated category and 190,000 tonnes classified as Inferred.

“Appendix 1: Rincon Lithium Project Location Map.”

The resource upgrade, covered in the Rincon resource upgrade, also produced an Exploration Target ranging from 390,000 to 1.03 million tonnes of Li2CO3 beneath the upgraded resource. Argosy stressed that the Exploration Target is conceptual rather than a Mineral Resource, while the deeper brine aquifer remains open and would require further drilling before any additional resource could be established.

Process engineering removes key design uncertainties

Argosy said its key process testwork programs had been completed without identifying unresolved issues. Solvent extraction pilot work produced lithium chloride concentrate with reported purity of 99% and a maximum lithium yield of 94.4%, while evaporation and concentration testing indicated the technology could achieve the required concentration factors and support continuous operation.

The most advanced engineering milestone was the FEL-3 preliminary engineering package for the evaporation and crystallisation circuit. The Rincon crystallisation engineering defined process configuration, equipment sizing, heat and mass balances and a preliminary plant layout, giving Argosy a more mature basis for DFS-level capital and operating cost estimates. Crystallisation testing also verified the unit process could be designed to produce lithium chloride at a yield above 99%.

Hydrogeology work is continuing alongside the DFS, including production wellfield design, industrial water infrastructure and preparation of a JORC Ore Reserve. Argosy also said EDESA had completed engineering and feasibility work for an electricity connection capable of delivering up to 40MW through an approximately 8.6-kilometre, 33kV line linked to Argentina’s national grid.

Capital remains the next development test

The technical progress sits alongside a more immediate financial question. Argosy raised $3 million through a placement at $0.036 a share and, after quarter-end, completed an SPP that raised a further $498,200 at the same price. The $3 million Rincon placement included attaching unlisted options, adding potential future dilution if exercised.

Argosy ended September with A$3.401 million in cash and reported approximately seven quarters of funding under the Appendix 5B calculation, based on relevant operating and exploration outgoings. That measure does not resolve the much larger capital requirement for construction: the company is still pursuing strategic investors, offtake arrangements, export credit agency support and separate funding for power and industrial water works.

The timing is not entirely comfortable. Benchmark Mineral Intelligence reported a 20.8% fall in battery-grade lithium carbonate prices during the June quarter, with the price cited at US$19,025 a tonne at quarter-end and US$15,425 a tonne by 21 October. Argosy’s demonstration facility remains closed, meaning the project’s next major evidence will come from the DFS, financing progress and the conversion of the deeper exploration potential into tested resources rather than from operating production.