Lithium Americas Corp.

Lithium Americas Corp.

September 07, 2011 07:00 ET

Lithium Americas Announces Successful Production Well Pump Test Results From Its Cauchari-Olaroz Lithium Brine Project

- Positive Pump Test Results Yielding Up to 25 Litres Per Second in the Brine Aquifer Indicate That Fewer Production Wells Could Be Required Than Estimated in the PEA

- Positive Pump Test Results Yielding 40 Litres Per Second in the Freshwater Aquifer Confirm the Presence of a Viable Freshwater Resource

- Pump Test Results and Confirmation of Freshwater Are Expected to Decrease CAPEX and OPEX Requirements Versus Those Estimated in the PEA

TORONTO, ONTARIO--(Marketwire - Sept. 7, 2011) - Lithium Americas Corp. (TSX:LAC)(OTCQX:LHMAF) ("Lithium Americas" or the "Company"), is pleased to announce the pump test results from its production well drilling program. These results are an important step in moving the project towards commercial production as they indicate that brine can be extracted from the salt lake at significant rates without affecting the chemistry (or quality) of the brine. The pump test results will also enable the Company to upgrade its NI 43-101 measured and indicated resource into a proven and probable extractable reserve.

"Pump testing in production size wells is a fundamental milestone in the development of any lithium brine project," said Dr. Waldo A. Perez, President and CEO of Lithium Americas. "Beyond its size, the economics for developing and producing from the Cauchari-Olaroz resource continue to improve. The confirmation of freshwater and the higher flow rates from the production well tests are expected to further reduce both our capital costs and operating costs, which are already projected in our recently filed Preliminary Economic Assessment as being one of the lowest in the industry. We continue to work on completing our Definitive Feasibility Study and look forward to starting mine construction of our world class lithium project in 2012."

A total of five production wells were tested. Four of the wells were used to evaluate the yield potential of the brine aquifer, and one was used to evaluate the yield of the freshwater aquifer. Access to freshwater is key in keeping operating costs low, as freshwater is required for the planned on-site lithium carbonate processing plant.

Brine Aquifer Wells

The four production wells used to evaluate the yield of the brine aquifer yielded the following results:

Depth (m) /
Test Flow
Total Brine
204/10 81.1 Sand 25 32 615±45 19,000,000
305/10 85.5 Sand 20 48 713±113 5,500,000
198/8 83 Sand 21 28 762±112 20,100,000
208/12 90 Halite 4 10 556±32 6,048,000

The flow rates identified in three of the four wells are more than double the estimates used in the Preliminary Economic Assessment (PEA), independently produced by ARA Worley Parsons and filed on May 4th, 2011. According to the PEA, a total brine production rate of approximately 400 litres per second is required to produce 20,000 tonnes per year of lithium carbonate. The PEA assumed that 40 production wells were required to achieve this production. The pump test results indicate that the actual number of required production wells could be approximately half of the original estimate, thereby decreasing both the capital cost and operating cost requirements. The pump test results will be used to calibrate a numerical groundwater model (in progress) that will support the definitive estimate before the end of the year.

Chemical sampling of the brine was conducted daily for the duration of the pump tests and results are also provided in the table above.

The average lithium grade of the measured resource, as previously reported in the PEA, is 656 milligrams per litre. Chemical sampling results confirm that after extracting significant amounts of brine, the composition remains stable and is comparable to the resource average. This result indicates continuity of grade across the extensive hydraulic capture zones of the pumping wells, and provides a high degree of confidence in the resource estimate.

Freshwater Aquifer Well

The test well used to evaluate the freshwater aquifer was drilled to a depth of 51 metres. Preliminary pumping results are as follows:

Depth (m) Diameter
51 12 24 Sand 40*
*Test Still in Progress

According to the PEA, the lithium carbonate processing plant needs approximately 60 to 80 litres per second of freshwater. The PEA estimated that 6 wells would be required to satisfy this amount of freshwater. The updated pump test results from the freshwater well suggest that adequate supply may be obtained from fewer than 6 wells, to supply all the freshwater required to operate the on-site lithium carbonate processing plant.

This freshwater, while not of potable quality, is suitable for the industrial water requirements of the lithium refining process. This access to freshwater represents a significant cost advantage for the project as it confirms that the lithium processing plant can be built on-site. Lack of local freshwater is a common problem for some current lithium carbonate producers. Consequently, there is often a need to transport concentrated brine to an off-site facility in order to complete final processing of the lithium carbonate, adding significantly to the overall operating costs.

The pumping tests described herein provide key technical support for a numerical brine model, currently in development. In turn, the model will support the conceptual design of a production well field, and a final reserve estimate.

About the Company

Lithium Americas is developing one of the world's largest and lowest cost lithium operations. The Company has defined the 3rd largest lithium brine resource in the world. A completed Preliminary Economic Assessment identifies that Lithium Americas' operating cost per tonne of lithium carbonate is $1,434 – based on available industry information; this would make Lithium Americas the lowest cost lithium producer in the world. The Company is currently working on completing a Definitive Feasibility Study. Mitsubishi Corporation and Magna International are shareholders in the Company, in addition to both companies having off-take arrangements with Lithium Americas.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Sampling and Analytical Protocols: All of the geochemical samples were collected by geologists or a trained technician taking into account the nature of the material being sampled. The brine samples were collected in a plastic bottle from the head of the well at 7 PM every day of the pumping process 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 transported by Alex Stewart Assayers Argentina S.A. ("ASAA") laboratories from the site to their facilities in Mendoza (Argentina) where they were analyzed. ASAA is an ISO 9001-2000-certified laboratory with headquarters in England. The brine samples were analyzed 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.

Mark King, PhD. P.Geo., independent QP of the Company has reviewed and approved this press release.

This press 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. The Company does not intend, and does not assume any obligations, 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. Readers should review the Company's Annual Information Form dated May 30, 2011 for a list of risks associated with the Company, and its business.

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