Lithium Americas Corp.

Lithium Americas Corp.

December 11, 2009 07:30 ET

Lithium Americas Corp. Announces Encouraging Drill Results and $10.5 Million Equity Financing

TORONTO, ONTARIO--(Marketwire - Dec. 11, 2009) - Lithium Americas Corp. (the "Company") is pleased to report results from its on-going drilling program in the Cauchari and Olaroz salt lakes in Jujuy Province, Argentina. The Company owns a total of 47,300 ha in the area, covering the vast majority of the Cauchari Salt Lake and approximately one third of the Olaroz Salt Lake. The Company has increased its property holdings in the area since its last update press release through the acquisition of several borax producers.

The Company is also pleased to announce that it has engaged GMP Securities L.P., PowerOne Capital Markets Limited (collectively, the "Co-Lead Agents") and Dundee Securities Corporation (together with the Co-Lead Agents, the "Agents") as its agents to complete an equity financing to raise up to $10.5 million as described below.

Summary of Drill Results:

Brine results for the first seven reverse circulation holes demonstrate:

- existence of lithium ("Li") bearing brine at depth

- brine chemistry that compares favourably to reported values of currently producing brine companies (i.e. in RC-06 in Cauchari a weighted average of 110 continuous brine samples covering 110 m aquifer yielded 871ppm Li and is still open at depth)

- a lithium bearing aquifer extending vertically over 100m and open at depth

"Results to date are encouraging and substantiate our commitment to further exploration work in the salars," said Dr. Waldo Perez, Chief Executive Officer and President of Lithium Americas Corp. "Not only have we proven the existence of brine at depth, but the width of the aquifers is wider than in any other known salar. Most salars have aquifers with widths ranging from a few meters to tens of meters. Having aquifers in the order of magnitude of a hundred meters is unheard of and all drill holes are open at depth".

Detailed Drilling Results:

Seven reverse circulation holes have been drilled for a total of 920m. The reverse circulation holes allow brine sampling to take place meter by meter as the drilling progresses.

Drill Results in Cauchari Salar

Three reverse circulation holes ("RC") have been completed in Cauchari Salt Lake.

RC-04 is located in northwest Cauchari and had a depth of 182m. The upper 40m of the hole contained four aquifers between 1m and 4m wide and brine samples range between 520ppm Li and 704ppm Li. Between 32m and 59m in depth there is an aquiclude (or seal) that is dry and overlies what the Company has identified as a continuous aquifer 110m wide with a weighted average of 110 samples (1 sample per meter) of 632ppm Li and 0.63% K. The Mg/Li ratio is 2.8.

RC-06 is located in northeast Cauchari, 5 km east northeast of RC-04. This hole had a depth of 164m. The upper 54m was mostly dry (aquiclude) with only one aquifer 3m wide with average grade of 3 brine samples of 834ppm Li. However, between 54m and 164m in depth a large porous salt unit (sodium chloride mixed with sandstone) was found that contained an aquifer that is 110m wide and brine samples have a weighted average of 110 samples that run 871ppm Li and 0.70% K. The Mg/Li ratio is 2.3.

RC-07 is located 5 Km north of RC-06, between Olaroz salt lake and Cauchari salt lake. This hole was drilled down 249m and results yielded 3 distinct aquifers. The upper aquifer is 11 m wide (78m-89m deep) and the brine samples have a weighted average of 265ppm Li and 0.35% K. The second aquifer extends from 97m to 135m and the brine samples have a weighted average of 436ppm Li and 0.37% K. The deeper aquifer is higher grade and runs from 145 to 249m deep and the weighted average of the samples have 504ppm Li and 0.41% K with a Mg/Li ratio of 2.4. The hole is open and contains brine all the way down to 249m.

Drill Results in Olaroz Salar

Four reverse circulation holes have been completed in Olaroz Salt Lake.

Reverse circulation holes 1, 2 and 5 (RC-01, RC-02 and RC-05) are located in the same site in south Olaroz salar.

Holes 1 and 2 were aborted due to technical difficulties in the drilling. RC 01 was aborted at 28m and RC 02 at 48m. RC-01 intercepted an aquifer 2m wide and the samples yielded 457ppm Li between 16m and 18m in depth. RC-02 intercepted five distinct aquifers between 10m and 40m in depth, all of them 1m to 2m wide. Lithium grade improves at depth and the best samples in the aquifer yielded 2m with 625ppm Li between 35m and 37m in depth. Since these two holes were too shallow, the Company drilled a third hole (RC-05) on the same spot and managed to drill successfully down to 210m. The surface aquifers were still present but the Company discovered a deeper aquifer located between 30m and 210m in depth, a total width of 180m, with a weighted average of the 180 brine samples of 345ppm Li and 0.38% K. Grades improved at depth and between 174m and 210m the brine samples run a weighted average of 474ppm Li and 0.38% K with a Mg/Li ratio of 1.9.

RC-03 was drilled on the eastern margin of the Olaroz salar, contiguous to an alluvial cone. The hole went down 90m and intercepted eight aquifers between 1m and 25m wide that range in grade between 1ppm and 87ppm Li and 52ppm and 254ppm K. The hole is artesian and the flow is over 10 litres per second. This result reflects the input of sweet water from the alluvial cone into the salar.

Seismic Results in Cauchari and Olaroz Salt Lakes

The Company completed five three dimensional tomography seismic lines, two in Olaroz and three in Cauchari cutting across the salar in the east-west direction. The lines are spaced approximately 20 km from each other and cover a total of 60km of salar in the north-south direction. The diamond and reverse circulation drill holes have been done on top of the seismic lines. The geophysical data shows that the salar is between 200m and 600m deep and that the porous units containing the brine are clearly identified by the seismic data. It is expected that this will allow the Company to improve constructing the model and the exploration program at the salar.

The Company will continue the current 3,500m drilling program and expects to expand the drilling program for next year to 10,000m. The Company plans to be in a position to make inferred resource estimations in the first quarter of 2010. The Company has already started evaporation tests for face chemistry analysis and a basin hydrological data collection.

Equity Financing

The Company has engaged the Agents to complete a best efforts private placement of up to 7,000,000 units at a price of $1.50 per unit for gross cash proceeds of up to $10.5 million to fund exploration and development efforts at its lithium projects (the "Private Placement"). Each Unit will consist of one common share of the Company (the "Common Shares") and one half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one additional common share of the Company at an exercise price of $2.00 per share at any time prior to the date that is two years from the date of completion of a going public transaction which shall result in the securities of the Company being listed on either the Toronto Stock Exchange or TSX Venture Exchange or three years from the closing date of the Private Placement, whichever is earlier.

The Private Placement is conditional upon satisfactory due diligence by the Co-Lead Agents, regulatory review and approval, and other closing conditions.

The funds of the equity financing will be used by the Company to complete its 2010 exploration program.

About the Company

Lithium Americas is a junior exploration and development company focused on the exploration and development of lithium, potash, borax and other industrial minerals in South America. Lithium Americas Corp. is managed by accomplished professionals with a proven track record of discovery, a deep knowledge of South American geology and an extensive network of high-level and strategic relationships throughout the continent. The largest shareholder of Lithium Americas is Latin American Minerals Inc. (TSX VENTURE:LAT).

Sampling and Analytical Protocols: Sampling and analytical protocols were implemented and supervised by or under the direction of John Kieley, the Corporation's internal Qualified Person as defined by National Instrument 43-101. All of the geochemical samples were collected by geologists taking into account the nature of the material being sampled. The brines samples were collected from the cyclone in a plastic can and then transferred into in a brand new plastic bottle filled atop containing 1 litre of brine and tightly closed. All samples were tagged with a pre-numbered ticket and stored in a secured location at the base camp for no more than 10 days in cold dark storage. The samples were shipped by courier to Alex Stewart Assayers Argentina S.A. ("ASAA") laboratories in Mendoza (Argentina). ASAA is an ISO 9001-2000-certified laboratory with headquarters in England. The brine samples were filtered and read directly by ICP analysis. All samples were assayed for 13 elements by ICP and AA. Accuracy and precision of results is tested through the systematic inclusion of blanks, standards and duplicates.

This news release contains forward-looking statements, which can be identified by the use of statements that include words such as "could", "potential", "believe", "expect", "anticipate", "intend", "plan", "likely", "will" or other similar words or phrases. These forward-looking statements, including statements regarding the Corporation's beliefs in potential mineralization, are based on current expectations, assumptions and projections about future events and entail various risks and uncertainties that are beyond the Corporation's ability to control or predict. Actual results may materially differ from expectations as more information regarding a property is gathered or if the Corporation's estimates or assumptions prove inaccurate. Factors that may materially affect actual results include, but are not limited to, political, business and economic conditions in jurisdictions where the Corporation conducts business, and risks associated with mineral exploration and production. The Corporation does not intend, and does not assume any obligation, to update forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by applicable securities laws. Readers should not place undue reliance on forward-looking statements. The results described herein are exploratory in nature and there can be no assurance that they are indicative of Mineral Resources as defined in accordance with National Instrument 43-101. There can be no assurance that the Private Placement will close.

Contact Information

  • Lithium Americas Corp.
    Waldo Perez
    + 54-261-439-9268
    Lithium Americas Corp.
    Ray Mitchell