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RESEARCH Centaur Resources – Lithium Triangle play

FYI | Oct 17 2018

By Pitt Street Research

 A Lithium Triangle play 

Centaur Resources ((CR3)) is developing the Lobo Blanco Lithium Project in Argentina. This 100%-owned project, which covers around 11,000 ha of ground, is in an established lithium mining district in Salta Province of northwestern Argentina.

In the near term, Centaur is seeking a JORC resource of lithium metal at Lobo Blanco sufficient for mine development. Centaur is currently raising A$15m at 20 cents per share. The stock is expected to commence trading on ASX around 6 November 2018.

An interesting commodity and neighbourhood

The current boom in electric vehicles has significantly boosted demand for all the components of lithium-ion batteries, coming as it does alongside ongoing robust demand for such batteries in smartphones, power tools and wearables.

There are two basic sources of lithium – hard rock and brine. The latter represents the low-cost option, since all that is required here, for a mine with sufficiently high grades to be economic, is to drill wells into the brine zones, pump the brine, and let evaporation take its course.

The so-called ‘Lithium Triangle’ encompassing northwestern Argentina (Jujuy, Salta and Catamarca provinces), northeastern Chile and southwestern Bolivia holds a lot of the world’s lithium brines due to its favourable climate for evaporation. This part of the world has been a ‘company maker’ for Australia’s Orocobre (ASX: ORE), and various juniors hope to follow in its footsteps.

The lithium in the Triangle sits under dried lakebeds called ‘salars’. Centaur’s neighbours for Lobo Blanco on the Salar Pastos Grandes are two Canadian companies – Millennial Lithium (TSX-V: ML) and LSC Lithium (TSX-V: LSC). Recent drilling by Millennial has encountered thick lithium-bearing brine zones at depth. All the relevant pieces of infrastructure to develop a world-class lithium mine are available in the district.

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