Transcript
Amalie: Latin Resources recently announced a key milestone with their maiden resource estimate at the Salinas Lithium project in Brazil. Here today to tell us about this is Chris Gayle, Managing Director of Latin Resources. The format today will be a series of questions from myself to Chris, followed by additional questions that we received from the audience prior to the webinar. Chris, could you please, please tell us about the Maiden MRE for the Salinas Lithium Project?
Chris: Sure, Amalie. Thanks very much for having me today. A great result for the company, hard work over ten months, over 10,000 meters of drilling, 47 holes. And Tony and the guys in Brazil have done a fantastic job to produce a JORC resource of 13.3 million tons at 1.2% 2 million indicated, 11 million inferred. So on top of that, of course, we have SGS, our independent geologist consultants have also given us an exploration target range for up to 22 million tons, which is fantastic just in Colina. So that’s only Colina. That’s not going into Colina West at the moment, which we’ll talk about shortly.
Amalie: That’s great. Sounds very positive for Latin. Could you expand a little on the exploration target range?
Chris: The exploration target range is based around, we’ve actually finished around about 14,000 meters of drilling, 57 holes. But the JORC resource itself only considered 47 holes, which is just over 10,000 meters. So there’s another 10 holes to include in that. We will do some further drilling, some infill drilling. So basically what SGS said is that we’ll have a 13.5 to 22 million tonne range, up to 22 million tons, between 1.2 and 1.5%.
Amalie: Okay, that’s great. That’s very clear. You mentioned Colina West in your opening remarks. Could you please tell us a bit more about the opportunity that you see at the prospect, noting that this prospect is not included in the current exploration target?
Chris: Good point. So we put four holes. The first hole we put west of Colina was hole 33, and that came in with about 18 meters at about 1.3% from memory, we’ve got another four holes that have actually punched in across that western pegmatite. We haven’t got the assay results back as yet, we’re expecting those in late January, but we have seen mineralization through those four holes spodumene and the geology looks no different to what Colina is. So at the end of the day, we’re expecting big things from Colina West, but we’ve got to obviously drill that and just see how that comes up. But it’s all looking really positive at the moment.
Amalie: There certainly seems to be an abundance of opportunity at Salina’s. Chris, turning to the metallurgy, you recently reported on a test work at Salinas with exceptional recoveries. Could you please tell us more about that?
Chris: Sure. I think our initial test work, our first test work results came back with about 75% recovery, 6.5% concentrate. This is a much broader representative sample of the ore body itself. Colina only. So we have had exceptional results come back 80.5% recovery rates. 6.6 to 7.9% concentrate. What all this means is for us that potentially this project once again is only lab scale. We have to take it to the mine environment, more importantly to actually do, a bigger concentrate type of DMS work. This has been run by heavy liquid separation, so it’s a lab scale. But what it’s telling us that the Brook cycle will only require DMS dense media separation. What does that mean? Low capex. We won’t have to run a flotation initially, just purely DMS, which means our capex could be quite considerably less than what we do if we had a flotation circuit in there.
Amaile: That’s great. Definitely sounds exciting. So what happens next for the Salina’s project?
Chris: All right, so the next, and as we announced last week, we have a massive drill program planned. We have another four rigs arriving on site in January, so that’ll be a total of eight rigs. We got 65,000 meters planned to further infill Colina and build that into an indicated resource. We have Colina West, where four rigs will immediately go to Colina West and start drilling that project. Colina south, where the pegmatites actually all open in the Colina South. So we’ll put a rig down there and Salinas South, which is about 7km’s south of Salinas itself. Very exciting prospect 4km of strike. We’ve finished off all the soil geo chem. We’re waiting for the results to come back to the soil geo chem. We’ve got some surface sampling, but we’ve nearly just about finished the drill targets for that. We’ll put a rig down there and start drilling Salinas South. So a lot of drilling coming up. An enormous amount of progress will be made over the next six months. We hope to have a resource upgrade towards the second quarter of next year. So it’s terribly exciting for the company and a lot of hard work, but terribly exciting.
Amalie: It’s great. 2023 looks to be a busy year in Brazil. Chris, you’ve recently updated the market on your other projects. Would you like to share what’s in store for those?
Chris: Okay, so we look at MT-03 in Peru. We finally got to drill bit down in that project. At the moment, it’s being drill currently the first hole. So I’d like to think around about February, March, we’ll have assays and drill results back from that project, the Cloud Nine project. Our Kaolin project here in Merredin just keeps really giving to, I think the company respective we have a massive indicated resource announced about two weeks ago. That’s now 280,000,000 tonne resource and we thought we’d assay for rare earth and there’s some sniffs of rare earths in there as well. So we’re going to do more analysis on the rare earths at Cloud Nine and just see exactly what we have there.
Amalie: Thanks so much for the comprehensive update, Chris. As I mentioned at the start, of the webinar today. We’ve had a series of questions that have come in from shareholder prior to the sessions. I’m going to move through to those now. We had a number of questions around the timing of the PEA, which was initially indicated for March 2023 and more recently has been mentioned June 2023. Could you please clarify this timeline?
Chris: Yeah, look, with Colina West coming into the scope of everything we started the PEA, SGS has been appointed and once again SGS has been fantastic. And they did all the feasibility studies with Sigma Lithium. So we’ve been very fortunate to get SGS on board. Initially we thought that we run that PEA based on the calendar results, which are excellent results, but now we’ve got Colina West, a bigger resource potentially. So we may pull in the Colina West results into that PEA, which may run it out a couple of months. We haven’t made that decision yet. Obviously, it depends on the drilling at Colina West, but we’ll watch this space, we’ll decide on that once we have more information from that drilling.
Amalie: That’s great. So, from James Gurry, analyst at Pac Partners, who covers and writes on Latin Resources, he mentioned congratulations on the Solid Maiden JORC resource. When will any pilot plant be up and running so you can test your product in the market with potential clients?
Chris: Yeah, SGS Lakefield, our consultants mentioned earlier, have a DMS pilot plant in Canada, in Toronto. So we will organize probably some samples first quarter next year to go off to that pilot plant in Canada, produce a concentrate. As I’ve said publicly before, we have around 15-16 potential offtakers on our offtake list. The board has made a decision not to sign any offtakes until we’ve had our PEA completed to give us more value in the business, to give us more leverage for negotiating offtakes. So it’ll work in nicely with getting that concentrate out of SGS in Canada probably around second quarter of next year.
Amalie: Can you outline what to expect from the Argentina exploration campaign in 2023, or do you think that will be of a 2024 focus?
Chris: Definitely 2023. The first half of 2023, we have an exploration program completed. We have people on the ground at the moment, the first priority for Latin Resources is to meet with the communities, get their permission to do some exploration work, noninvasive exploration work, and that means soil geo chem, rock chip sampling, some mag will run over some of those areas. We know that area very well. We’ve put two lots of drilling through there, came up with some very good grades, up to 3% thin intercepts. We found a new area in the northwest delta which have larger, bigger pegmatites types, so we’re going to focus on those areas. We would like to think that we start drilling second quarter of next year. Catamarca once we identified some drill targets.
Amalie: We identified a list of questions compiled by a group of LRS holders, with a grade of 1.2% and Sigma’s initial JORC of being 1.5. Is this a concern or is this the result or are conservative estimates being used and are grade upgrades expected with further drilling?
Chris: Yeah, good question. Sigma’s first initial result was 1.47%, with a great result. SGS once again have given a target range of between 1.2 to 1.5% at Colina. Some of the holes we drilled were quite shallow. In those 47 holes we initially drilled, some of them were quite shallow. We drilled some deeper holes later on in the program, and that showed a lot of grade there. We’re expecting with further drilling that we’ll get that grade up. Once again, SGS agrees a target range of 1.2 to 1.5%. So it needs further drilling to be able to determine that.
Amalie: Okay. Has Offtake interest increased since the announcement of the JORC MRE.
Chris: Look, we’ve told most potential offtakers, which includes OEM, battery manufacturers, trading houses, that we are pausing until we get our PEA. They have seen, obviously, our maiden resource, and we’ve got some good emails back congratulating us on that. We’re still in constant communication with them to a certain degree, but for us, it’s about getting leverage, getting the value in the ground with getting a reasonable size JORC in June and then working our PEA to that maximum amount we can get that JORC to and then start talking to offtakers.
Amalie: Is the company’s positive rather than competitive relationship with Sigma a sign of an abundance market space in lithium?
Chris: Sigma have been great. I had a chat with Anna last night. She’s done an incredible job putting Brazil, really Brazil on the planet for lithium hard rock. Sigma been a fantastic company. $4 billion. They put their upgraded MPV out on Monday. $15 billion. From 5 to 15 billion. People should look at that. It’s significant and it’s been terribly helpful for us. She’s put us in touch with SGS, with the mining environmental consultants. We’re using their environmental consultants, which have started on the project. In particular, they started the wet season is coming in December and January. So the environmental consultants got a lot of work to do during that wet season to just check and make sure that they move through that permitting stage of the wet season. So Simga has been great. We want to follow in Sigma’s footsteps. They’ve paved the way for Latin Resources. They’ve got a great relationship with Ministerized Province. We are communicating consistently with about how we can work together. The Ministerized Province want to have a battery sector’s, sector or industry within their province, and Sigma and Latin are the ones to help them with that. So they’ve been great. Really good for us.
Amalie: That’s really good to hear. If the PEA study comes with a similar numbers to Sigmas, this will be one of the most economically attractive projects on the ASX. Do you think investors have made this comparison yet?
Chris: I think we’re discounted for being in Brazil by the Australian investors. I can’t mention other Australian listed lithium companies. And here in Western Australia, they’re great companies, they’ve got great resources, but we have larger resources than some of those companies at a higher grade. And our market caps $300 million. Some of them another 100 or $200 million more. I think we get a discount from Brazil, but it’s our job to educate the market on Brazil. So once we start educating, I think the great comparison for us is Sigma. And we hope to catch Sigma soon. Sigma of just about completed construction. They will complete construction first quarter next year and they’ll start production second quarter. As I said earlier, their MPV has gone from 5 billion to 15 billion. And if we could follow in that footstep, we would be very happy.
Amalie: Great. So that’s the end of the kind of questions we’ve seen from shareholders and investors. Any final remarks for your shareholders and investors today, Chris?
Chris: Look the support of the shareholders, in particular the retail shareholders, have been phenomenal. We had 2000 shareholders in March 2020. We now have 14,000. Their support through the good and bad times of Latin has been exceptional. I’d like to thank them personally for all of that support. We have a big Twitter following and thanks to White Noise, we have a lot of followers. We are going to push and market into North America next because we actually think that our raw material will be sold into North America. So we’re working with another investor relations firm, Red Cloud in North America, to help us push that message across into Canada, USA. A lot of people have made a lot of money out of Sigma. We want to actually send the message over. The next segment is coming through. So, yeah, we’ll be doing 2023 is going to be a massive year for us from marketing aspect as well.
