- EIS Approved by Provincial Jujuy Government for Development and Production at the Company's "Flagship" Salar de Olaroz Lithium-Potash Brine Project
- Resource Evaluation Drilling Completed at Salar de Olaroz
- Definitive Feasibility Study ("DFS") Engineering 80% Complete at the End of the Quarter
- Optimisation of the Process Route for Production of Lithium Carbonate Advances at Olaroz Pilot Plant
- Study Highlights Exploration Potential at the Company's Salar De Cauchari Properties Directly South of Salar de Olaroz
BRISBANE, AUSTRALIA--(Marketwire - Jan. 31, 2011) - Orocobre Limited (TSX:ORL)(ASX:ORE)
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
SALAR DE OLAROZ LITHIUM-POTASH PROJECT
During the quarter Orocobre Limited ("Orocobre" or the "Company") continued to make considerable progress on the Definitive Feasibility Study on the Company's flagship Olaroz Lithium-Potash Project located in Jujuy province in northern Argentina.
The Orocobre team focused on the execution of the many technical and governmental aspects of the project, while the Company's partner, Toyota Tsusho Corporation ("Toyota Tsusho"), focused on the sales and marketing assessment and the project financing plans for the Olaroz development.
Environmental Impact Statement for the Development and Exploitation of the Salar de Olaroz Lithium-Potash Project Approved
Just prior to the end of the quarter, the Company received approval from the Jujuy provincial government of the Environmental Impact Statement for the development and exploitation of its Salar de Olaroz Lithium-Potash Project in Jujuy Province, northern Argentina.
The approval by the Provincial Director on Mines and Energy Resources was received by the company on 31 December 2010 following the recommendation by the Unit of Mining Environmental Management ("UGAMP") on 12 November, 2010. UGAMP is a body comprised of twelve members representing various government departments, stakeholder groups and local communities. The development recommendation was fully supported by the local community of Olaroz Chico and other regional community leaders. As part of the approval, the Company must comply with various monitoring obligations, provide additional information on its planned construction works as the project design is finalised, and keep the local communities informed about its activities.
Subsequent to the recommendation of UGAMP, the Company also signed an access and compensation agreement with the local community of Olaroz Chico.
Olaroz Resource Evaluation Program
Drilling was completed for the resource evaluation drilling program. This involved 20 cored holes to 54m using sonic technology ("C series") and six cored holes to 200m ("CD Series") using modified triple tube coring techniques.
Very high core recoveries have been achieved with the sonic drilling program and the Company has placed considerable emphasis on ensuring that the data collected is of a high quality. Various methods have been developed to confirm that the brine sample recovered during drilling is representative of the brine at that point. Approximately 1,500 samples have been analysed for total porosity, 1000 for effective porosity and 500 for specific yield (free draining porosity). All holes have been logged with down hole geophysical methods also.
To view Figure 1 – Plan showing drill hole locations, please visit the following link: http://media3.marketwire.com/docs/Orocobre_figure1.pdf.
In addition, three by 50m deep and two by 200m deep pumping test bore facilities (i.e. one pumping bore plus 3 to 6 monitoring bores) have been drilled and long term pumping tests are current. Four bores were also drilled around the property to assess boundary conditions.
A revised resource estimate to 200m is expected by the end of this current quarter.
The geometry of the brine body has been interpreted by the combination of the previously undertaken Audio Megneto Telluric (AMT) geophysical surveys and the drilling. The geometry, shown as the periphery of the body at surface, 100m, 200m and 300m is presented in figure 2.
To view Figure 2 - Plan showing interpreted brine body at different depths based on AMT surveys and drilling, please visit the following link: http://media3.marketwire.com/docs/Orocobre_figure2.pdf.
The brine body is an oval shape with an approximate ratio of 2:1 (length to breadth) with the breadth having a distance of approximately 10kms. This is a good geometry from which to design a pumping strategy and bore field as compared to narrow geometries. The grades in the brine body are indicated by the results so far to be highest in the centre and decrease at the margins as the brine concentrations decrease. To the south towards Cauchari, the brine body narrows and grades decrease, influenced by the impacts of the Archibarca delta to the west.
Pilot plant scale lithium carbonate production commences
In the September quarter, the first lithium carbonate product was produced at the Company's process development test work facilities at the Salar de Olaroz. The process used is a modification of the "Silver Peak" method used at Clayton Valley, Nevada since the late 1960's.
During the quarter, the focus on the work was to optimise the process route to improve the purity of the product so that it can meet the high specifications required for the battery industry. Considerable advances have been made to this point both with work at the pilot plant and also at external laboratories. The Company's objective is the production of battery grade lithium carbonate from the facilities during this quarter. This can then be supplied to potential end users.
To view the photo associated with this press release, please visit the following link: http://media3.marketwire.com/docs/Orocobre_photo.jpg.
Definitive Feasibility Study - Sinclair Knight Merz
During the quarter, considerable progress was made by Sinclair Knight Merz ("SKM"), the engineers appointed to undertake engineering design and costing for the Definitive Feasibility Study. By the end of the quarter, approximately 80% of the engineering had been completed.
The Definitive Feasibility Study for the Salar de Olaroz Project is expected to be completed by the end of the current quarter.
SALAR DE SALINAS GRANDES POTASSIUM-LITHIUM PROJECT (85%)
In November, drilling commenced on the Company's properties in the western part of Salinas Grandes. Unfortunately, due to the non-availability of rods and casing for a different drilling contractor at Salar de Olaroz, the drilling rig at Salinas Grandes had to be moved to Olaroz to substitute the other contractor's drilling rig on the deeper drilling. Drilling at Salinas Grandes is planned to recommence in late March with the objective of being able to estimate a resource during the second quarter.
SALAR DE CAUCHARI (85%)
The Company holds interests in over 30,000 hectares in Cauchari, the salar immediately due south of Salar de Olaroz. During the previous quarter, the Company commissioned independent geological and hydro-geological consultant, Murray Brooker, to review all the Company's information from Salar de Cauchari and the public domain information of Lithium Americas Corp. The report highlighted the exploration potential of the Company's properties in the north-east part of the salar where the Company has a large land holding immediately abutting the largest and highest grade part of the resource estimated by Lithium Americas Corp. The prime target area is approximately 48 square kilometres, similar to the main area of the Lithium Americas Corp. resource. Lithium Americas Corp.'s highest grade drill holes are along the boundary. Although the Cauchari brine body and basin is considerably narrower than Olaroz, the Company considers that it is an attractive target, particularly as the target area is distant from the Archibarca delta. The concept is that the Cauchari brine could be an incremental brine source for the Company's Salar de Olaroz plant that is expected to be located approximately 10kms to the north. The Company has lodged an EIS for exploration at Cauchari and plans to commence drilling later in 2011.
Paul Crawford, Company Secretary
About Orocobre Limited
Orocobre Limited is listed on the Australian Securities Exchange and Toronto Stock Exchange (ASX:ORE)(TSX:ORL) and is the leading lithium-potash developer in the lithium and potassium rich Puna region of Argentina.
For further information, please visit www.orocobre.com.
Scientific or technical information in this report that relates to the Company's Olaroz, Salinas Grandes and Cauchari properties is based on information prepared by or under the supervision of Mr Richard Seville, who is a member of the Australian Institute of Mining and Metallurgy. Mr Seville is the Managing Director of Orocobre Limited and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves', and as a "qualified person" under National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr Seville consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Additional information relating to the Company's projects is available in the technical reports entitled "Technical Report – Salar de Olaroz Project, Argentina" dated April 30, 2010 (the "Olaroz Report"), "Technical Report – Salinas Grandes Project" dated April 30, 2010 and "Technical Report – Salar de Cauchari Project, Argentina" dated April 30, 2010, respectively, which have each been prepared by John Houston, Consulting Hydrogeologist, together with, in the case of the Olaroz Report, Peter Ehren, Consulting Processing Engineer, in accordance with NI 43-101.
Caution Regarding Forward-Looking Information
This report contains "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information may include, but is not limited to, information with respect to the future financial and operating performance of the Company, its affiliates and subsidiaries, the estimation and realization of mineral resources, costs and timing of development of the Company's projects, costs and timing of future exploration, timing and receipt of approvals, consents and permits under applicable legislation, results of future exploration and drilling and adequacy of financial resources. Forward-looking information is often characterized by words such as "plan", "expect", "budget", "target", "project", "intend", "believe", "anticipate", "estimate" and other similar words or statements that certain events or conditions "may" or "will" occur.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking information, including risks associated with investments in publicly listed companies, such as the Company; risks associated with general economic conditions; the risk that further funding may be required, but unavailable, for the ongoing development of the Company's projects; changes in government regulations, policies or legislation; unforeseen expenses; fluctuations in commodity prices; fluctuation in the exchange rate of the Argentine peso, the Australian dollar, the Canadian dollar or the United States dollar; litigation risk; restrictions on the repatriation of earnings by the Company's subsidiaries; conflicts of interest of certain directors of the Company; inability to effect service of process or to enforce judgments within Canada upon and against the directors and officers of the Company; the inherent risks and dangers of mining exploration and operations in general; risk of continued negative operating cash flow; the possibility that required permits may not be obtained; environmental risks; uncertainty in the estimation of mineral resources and mineral reserves; risks that the current inferred resource at the Company's Olaroz project will not be converted to a sufficient amount of indicated or measured resources to warrant development; general risks associated with the feasibility and development of each of the Company's projects; the risk that a definitive joint venture agreement with Toyota Tsusho Corporation may not be completed; risks that the new process being developed by the Company will take longer to develop than anticipated or that it will not be successfully developed; risks of being unable to sell production in the event of the development of a project; foreign investment risks in Argentina; changes in Argentinean laws or regulations; future actions by the Argentinean government; breach of any of the contracts through which the Company holds property rights; defects in or challenges to the Company's property interests; uninsured hazards; disruptions to the Company's supplies or service providers; reliance on key personnel; retention of key employees; absence of dividends; competition; absence of unitization or reservoir management rules; the Company's dependence on an open border between Argentina and Chile; as well as those factors disclosed in the Company's publicly filed documents.
The Company believes that the assumptions and expectations reflected in such forward-looking information are reasonable. Assumptions have been made regarding, among other things: the Company's ability to carry on its exploration and development activities, the timely receipt of required approvals, the prices of lithium and potash, the ability of the Company to operate in a safe, efficient and effective manner and the ability of the Company to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.
Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities in the United States. The Company's securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
ABN 31 112 589 910
Contact Information: Australia and Asia
+61 7 3871 3985 or M: +61 419 916 338
FD Third Person
+61 8 9386 1233 or M: +61 412 349 345
James D. Calaway
+1 (713) 366-0301 or M: +1 (713)-818-1457
+1 (312) 861 4707 or M: +1 (646) 258 7439