Dempsey Minerals (ASX:DMI) has been running the ruler over Blue Sky Lithium’s projects in the heart of the Lithium Triangle of South America and it likes what it sees.
After announcing it was seeking to acquire a landholding earlier in the year in arguably the most productive lithium brine basin in Argentina, Dempsey has now reported that due diligence over Blue Sky and its licences is almost complete and tracking well.
The mining tenements lie within the South American Lithium Triangle in the Hombre Muerto Basin, one of the most important and prolific salt flats in Argentina and indeed the world.
The basin is known to have the lowest impurity levels of any producing Salar in Argentina and has been in production for over 20 years.
Dempsey notes that the project is in a good neighbourhood, situated adjacent to Galaxy Resources’ Sal de Vida project (proposed production of 25ktpa lithium carbonate equivalent) and FMC’s Fenix lithium operations (which has been in operation since 1997).
To date exploration results have matched the high expectations of the project’s impressive locale, with lithium results collected as part of the due diligence process proving highly encouraging.
The northern section of Candelas has returned samples ranging up to 59 mg/l Li, which compares favourably to similar near-surface lithium brines extracted by Galaxy, which recorded results of ~62.8 mg/l Li.
Due diligence has been very encouraging and backs up our view that this transaction is a potential gamechanger for Dempsey,” non-executive director Nathan McMahon said.
“It has proven to us that Blue Sky’s licences lie in an ideal geological setting for lithium brine development with low impurities and shallow targets. Surface sampling has also been very positive, returning similar results to Galaxy Resources’ adjacent Sal de Vida project where production of 25ktpa lithium carbonate equivalent (LCE) is proposed,” he said.
Shares in Dempsey Minerals last closed at 10.5 cents per share.