SOURCE: Neo Lithium Corp.

Neo Lithium Corp.

February 28, 2017 10:44 ET

Neo Lithium Announces New Positive Drill Results and Significant Initial Pump Tests for 3Q Project

TORONTO, ON--(Marketwired - February 28, 2017) -

NOT FOR DISSEMINATION IN THE US OR THROUGH US NEWSWIRE SERVICES

  • Drill hole PP1-D-5 located in the center of the Northern Target yielded an average of 1,024 mg/L lithium over 63 metres including 1,400 mg/L of lithium over 20 metres.
  • Drill hole PP1-D-3 completed 2km south of the Northern Target, where surface lithium grades were 190 mg/L, yielded an average lithium grade of 528 mg/L across 192 metres, indicating the potential for a much larger lithium deposit than previously anticipated, extending the Northern Target at depth to the south.
  • Pump tests at Platform 3 show that the aquifer can produce at a remarkable rate of 200 m3/h.

Neo Lithium Corp. ("Neo Lithium" or the "Company") (TSX VENTURE: NLC) is pleased to report results from its ongoing drilling program at the Tres Quebradas lithium brine project ("3Q Project") in Catamarca Province, Argentina.

The main target of the 3Q Project is known as the Northern Target, an area originally identified by surface sampling with an average lithium concentration of 895 mg/L and potassium concentration of 7,694 mg/L that extended for approximately an area covering 4 km by 14 km (please refer to Neo Lithium's press release on July 20th, 2016 and the Company's current technical report).

The drilling plan for the season was to complete five drill platforms (with two holes in each platform) in the Northern Target to test the target at depth and three drill platforms (with two holes in each platform) outside the Northern Target to test at depth the areas with surface low lithium grade. This press release present chemical results of 4 drill holes in 3 platforms from the Northern Target and 2 drill holes from 2 platforms outside the Northern Target. No further drill hole results have been received as of this press release and the Company will continue to inform the market as additional information is available.

The Company currently has three rigs drilling simultaneously, including two diamond drill rigs and one rotary drill rig. The two diamond drills collect core samples to understand the geology of the salar and send core samples to Daniel B. Stephens & Associates, Inc. laboratory in the US to measure drainable porosity, a parameter needed to estimate resources at a salar. The diamond drill rigs are also used to collect brine samples at different intervals using the "packer" technique. Packers are rubber donuts that isolate aquifers at depth, allowing the sampling of brine at specific depths and therefore monitoring changes in chemistry. Finally, the diamond drill holes are piped and screened and used as monitoring wells (piezometers). At the same platform where a diamond drill hole is completed, a rotary drill is used to drill a twin hole located 10 metres to 20 metres away from the diamond drill hole to make a production well. The well, which is 12 inches wide, is installed with 8 inch screen pipe following the geology found in the diamond drill hole to ensure that the screen matches the aquifer. Downhole geophysics is done in each well to pin point the brine aquifers.

Drill Results in the Northern Target:

Platform 5: located in the center of the Northern Target, immediately south of the 3Q Project brine lake.

PP1-D-5: This diamond drill hole (DDHH) identified porous sodium chloride interlayered with sand and conglomerates from surface down to 63 metres. Chemical results (based on 3 samples collected from surface down to 63 metres) yielded an average of 1024 mg/L lithium (including 20 metres with 1,400 mg/L Lithium); 8,080 mg/L potassium with a ratio of Mg/Li=1.66 and Sulfate/Li=0.5.

Platform 4: located 2 km south east of Platform 5.

PP1-D-4: This DDHH identified porous sodium chloride interlayered with sand and conglomerates from surface down to 69 metres. Chemical results (based on one sample from surface down to 69 metres) yielded 864 mg/l lithium and 7,482 mg/L potassium with a ratio of Mg/Li=1.85 and Sulfate/Li=0.77.

Platform 2: located 3 km south west of Platform 5

PP1-D-2: This DDHH identified fine sands and thin layers of salt from surface down to 66 metres. Chemical results (based on 6 samples from surface down to 66 metres) yielded an average grade of 766 mg/L of lithium (as reported on the January 10th 2017 press release) and 6,805 mg/L potassium with a ratio of Mg/Li=1.79 and Sulfate/Li=0.32.

PB1-R-2: This rotary well is located 20 metres from PP1-D-2. The well went down 80 metres. Chemical results (based on 6 samples collected from surface down to 80 metres) yielded an average grade of 733 mg/L of lithium; 6,738 mg/L potassium and with a ratio of Mg/Li=2.14 and Sulfate/Li=0.5. The small differences in chemistry with PP1-D-2 are within analytical and sampling error. The well is hosted in fine sands over the entire 80 meters, and is considered a single unconfined aquifer.

Drill Results Outside the Northern Target:

Platform 3: located 2 km south of the southern end of the Northern Target.

Results on this platform are very relevant because surface samples from this area showed only 190 mg/L lithium. Finding high grade lithium brine at depth could significantly extend the lithium bearing target to the south of the Northern Target.

PP1-D-3: This DDHH identified porous sodium chloride interlayered with sand and fine sands down 60 metres, followed by a massive and porous sodium chloride layer from 60 to 192 metres. Chemical results (based on 7 samples collected from surface down to 192 metres) yielded an average of 528 mg/L lithium and 4,797 mg/L potassium with a ratio of Mg/Li=2.6 and Sulfate/Li=0.63.

Platform 1: located outside the Northern Target in the alluvial fan 500 metres east of the 3Q Project brine lake.

PB1-R-1: This rotary well identified fresh water from 28 metres down to 38 metres depth and a brine aquifer between 38 and 50.5 metres depth. Five samples were collected in the brine aquifer with an average of 264 mg/L lithium. This low grade brine is interpreted to be a mixture of fresh water and brine and shows the lithium grade of the brine approximately 500 metres away of the 3Q Project brine lake.

With the results of PP1-D-3 outside the Northern Target the Company has decided to extend the drill program south of the Northern Target with 4 more platforms and 8 holes that will be drilled down approximately 300 meters.

"The results continue to show that the 3Q Project is a unique lithium discovery in terms of high grade, low impurities, size and productivity of the aquifers," said Constantine Karayannopoulos, Chairman of Neo Lithium Corp. "The high lithium grades found at surface are being confirmed at depth across the Northern Target and now we found high grade lithium two kilometers south of the Northern Target, extending the exploration potential of the 3Q Project significantly."

Pump Tests

Pump tests were completed using a rotary drill hole as a pump well and a diamond drill hole as a monitoring well. The pump used was a 15 horsepower, 6 inch submersible electric pump. Two pump test were completed, a 24 hour long step test and after a minimum 24 hours recovery, a second 72 hour long pump test. These tests are fundamental to evaluate the capacity of the salar to yield brine and measure lithium resources. So far, two pump tests have been completed, one on Platform 2 in the Northern Target and another on Platform 3 south of the Northern Target. These tests are preliminary and further test will be completed to verify these results.

Platform 2 Pump Test Results: the pump tests demonstrate that the aquifer (which extends from surface down 80 metres) can produce 60 m3/h of brine, has a specific flow of 7.5 m3/h/m at a flow of 47.4 m3/h and has a storage coefficient (equivalent to drainable porosity) of 0.34.

Platform 3 Pump Test Results: the pump test demonstrates that the aquifer (which extends down 60 metres from surface) can produce 200 m3/h of brine, has a specific flow of 116 m3/h/m at a flow of 72 m3/h and has a storage coefficient (equivalent to drainable porosity) of 0.16.

"These initial pump test results are extraordinary in terms of production capacity and drainable porosity, and we will do longer pump tests to verify these extremely positive results," said Dr. Perez, President and CEO of Neo Lithium. "In order to illustrate why the results are so impressive, one must take into account that one single hole that is able to produce 200 m3/h of brine at 800 mg/L lithium is the equivalent to 3,500 tonnes of lithium carbonate per year."

Sample Collection (QA/QC)

The brine samples collected in the field were delivered by the Company to Andesmar Transport Company ("Andesmar") in Catamarca city, in the province of Catamarca. Andesmar has delivered the samples by truck to Alex Steward Laboratories ("ASL"), an ISO 9001-2008-certified laboratory in Mendoza, Argentina. ASL used the following analytical methodologies: ICP-OES (inductively-coupled plasma-optical (atomic) emission spectrometry) to quantify boron, barium, calcium, lithium, magnesium, manganese, and potassium; an argentometric method to assay for chloride; a gravimetric method to analyze for sulfate; a volumetric analysis (acid/base titration) for the evaluation of alkalinity (as CaCO3); a gravimetric method to determine density and total dissolved solids; and, a laboratory pH meter to determine pH. All analytical work is subject to systematic and rigorous Quality Assurance-Quality Control. A reference ("standard") sample was inserted into the sample stream at a frequency of approximately 1 in 15 samples; a field blank was inserted at a frequency of approximately 1 in 15 samples; and a field duplicate sample was inserted at a frequency of approximately 1 in 15 samples.

About Neo Lithium Corp.

Neo Lithium Corp. is quickly becoming a prominent new name in lithium brine exploration by virtue of its quality 3Q Project and experienced team. Already well capitalized, Neo Lithium is rapidly advancing its newly discovered 3Q Project -- a unique high-grade lithium brine lake and salar complex in the Latin America's Lithium Triangle.

The 3Q Project is located in the Province of Catamarca, the largest lithium producer in Argentina. The project covers approximately 35,000 ha and the salar complex within this area is approximately 160 km2. Surface exploration results indicate a high-grade lithium target in the northern portion of the salar complex extending for approximately 20 by 5 km with low magnesium and sulphate impurities. Low impurities are a key factor in traditional low cost evaporation techniques for final lithium carbonate production. Hot springs on the property with elevated lithium content are part of the recharge system of the salar complex.

The technical team that discovered this unique salar complex is one of the most experienced in lithium salars, having discovered and led the technical work, including resource definition and full feasibility study that established the Cauchari lithium salar as the third largest lithium brine resource in the world.

Additional information regarding Neo Lithium Corp. is available on SEDAR at www.sedar.com under the Company's profile and at its website at www.neolithium.ca, including various pictures of ongoing work at the project.

Waldo Perez, Ph.D, P.Geo., the CEO and President of Neo Lithium Corp. is the Qualified Person who approved the scientific and technical disclosure in the news release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange Inc. has in no way approved nor disapproved the contents of this press release.

Forward Looking Statements -- Certain information set forth in this news release may contain forward-looking statements. Such statements include but are not limited to, statements as to lithium brine grades at depth being consistent with surface results, the potential of the northern salar sediments for hosting brine, continued positive drilling results and the timing for planned resource estimation work, and that test results are indicative of future results . Generally, forward-looking statements can be identified by the use of words such as "plans", "expects" or "is expected", "scheduled", "estimates" "intends", "anticipates", "believes", or variations of such words and phrases, or statements that certain actions, events or results "can", "may", "could", "would", "should", "might" or "will", occur or be achieved, or the negative connotations thereof. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Company, which could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such statements. These risks include, without limitation, risks related to failure to obtain adequate financing on a timely basis and on acceptable terms, political and regulatory risks associated with mining and exploration activities, including environmental regulation, risks and uncertainties relating to the interpretation of drill and sample results, risks related to the uncertainty of cost and time estimation and the potential for unexpected delays, costs and expenses, risks related to metal price fluctuations, the market for lithium products, and other risks and uncertainties related to the Company's prospects, properties and business detailed elsewhere in the Company's disclosure record. Although the Company believes its expectations are based upon reasonable assumptions and has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended and undue reliance should not be placed on forward-looking statements.

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