Cauchari Project
 

In addition to the flagship Olaroz Project, Orocobre has been actively identifying and developing a significant portfolio of other high quality lithium-potassium-boron projects that have great potential for development as low cost suppliers to key lithium, potash and borate markets. The Company has, through its 85%-owned subsidiary, South American Salar Minerals Pty Ltd, an active Puna Region exploration program focused on further development of these projects. Orocobre holds an 85% interest in the Salar de Cauchari lithium-potassium-boron brine project.

Orocobre’s Salar de Cauchari lithium-potash resource, over 30,000 ha in Jujuy province immediately south of the Olaroz Project, has similar geo-chemical characteristics to Olaroz and provides a nearby additional brine source for future expansions of the planned Olaroz production facility at relatively low incremental capital cost. Encouraging results from a recent Cauchari drilling program confirmed the Company's expectations of a good quality resource that can be processed effectively at Olaroz.





The salar at the Cauchari Project was previously exploited for borates for many decades by miners including Borax Argentina, a subsidiary of Orocobre. In November 2010, the Company commissioned an independent geological and hydro-geological consultant to review all the Company’s information from Salar de Cauchari and the public domain information from another company (i.e. Lithium Americas Corp.) which has undertaken drilling and other studies in the immediate area. The consultant’s report highlighted the exploration potential of Orocobre’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 held by Lithium Americas.

Because the Cauchari Project is located adjacent to the Olaroz Project, and is part of the same basin with similar brines chemistry, the Company considers the two salars to form a single property and does not currently anticipate developing a separate operation at the Cauchari Project. Instead, the Company will assess the value of producing brines from Cauchari and utilizing those brines through common infrastructure planned for the Olaroz Project. If sufficient resource is delineated at the Cauchari Project, the Cauchari brines could be developed and processed at the planned Olaroz Project facilities for an incremental capital cost. This development strategy would require a capacity expansion of the Olaroz processing facilities beyond the currently planned rate of 16,400 tonnes per year of battery-grade lithium carbonate. Similarities in brine type are expected to allow Cauchari brine to be integrated into the planned operation with minor modifications to the processing route.

In January 2012 Orocobre announced encouraging results from exploratory well drilling completed at the Cauchari Project (see Company news release “Orocobre Announces Results From Its Cauchari Lithium–Potash Project Drilling”, January 25, 2012 for details). The objective of the drilling program was to delineate a brine body at the Cauchari Project and to allow a resource estimate to be undertaken. Orocobre’s drilling program tested the area on the company's leases directly to the southeast of the highest-grade part of the brine body drill tested by Lithium Americas Corp. on its Cauchari lithium project.

The drilling program analytical results confirmed that the elevated values identified in the lithium resource defined by Lithium Americas Corp. extend into Orocobre’s properties along the east portion of the Cauchari salar. Assay results received to date show elevated lithium values in areas previously predicted from publicly released Lithium Americas Corp. data. Pending results from drill holes in the southern portion of Orocobre’s properties will help define the extent of elevated lithium values and the SO4/Li ratios in this area. Existing results suggest the lithium brine body extends over an area of approximately 26 square kilometres within Orocobre's Cauchari properties.

An estimate of the Cauchari Project resource is planned to be undertaken in the second quarter of calendar year 2013 once the remaining chemical analyses and specific yield porosity determinations are received from the British Geological Survey laboratories.

For additional information on the Cauchari Project, see “Details of the Cauchari Project”.

[Note: Information herein relating to Lithium Americas Corp. has not been verified by Orocobre or by its independent consultant Murray Brooker, and such information is not necessarily indicative of results that will be obtained by Orocobre at the Cauchari Project.]

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