Li3!43!101ReportMaricunga2012 Final

TECHNICAL REPORT ON THE
MARICUNGA LITHIUM PROJECT

REGION III, CHILE

NI 43-101 REPORT PREPARED FOR:

By:
Don Hains, P.Geo
Frits Reidel, CPG

April 17, 2012

Li3 Energy - Salar de Maricunga Project

Page i
TABLE OF CONTENTS
PAGE
1 EXECUTIVE SUMMARY ........................................................................................... 1-1
2 INTRODUCTION ....................................................................................................... 2-1
3 RELIANCE ON OTHER EXPERTS ........................................................................... 3-1
4 PROPERTY DESCRIPTION AND LOCATION .......................................................... 4-1
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY .................................................................................................. 5-1
6 HISTORY .................................................................................................................. 6-1
7 GEOLOGICAL SETTING AND MINERALIZATION ................................................... 7-1
8 DEPOSIT TYPES ...................................................................................................... 8-1
9 EXPLORATION ......................................................................................................... 9-1
10 DRILLING .............................................................................................................. 10-1
11 SAMPLE PREPARATION, ANALYSES AND SECURITY ..................................... 11-1
12 DATA VERIFICATION ........................................................................................... 12-1
13 MINERAL PROCESSING AND METALLURGICAL TESTING ............................... 13-1
14 MINERAL RESOURCE ESTIMATE ....................................................................... 14-1
15 MINERAL RESERVE ESTIMATE .......................................................................... 15-1
16 MINING METHODS .............................................................................................. 16-1
17 RECOVERY METHODS ....................................................................................... 17-1
18 PROJECT INFRASTRUCTURE ............................................................................ 18-1
19 MARKET STUDIES AND CONTRACTS................................................................ 19-1
20 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY
IMPACT ............................................................................................................... 20-1
21 CAPITAL AND OPERATING COSTS .................................................................... 21-1
22 ECONOMIC ANALYSIS ........................................................................................ 22-1
23 ADJACENT PROPERTIES ................................................................................... 23-1
24 OTHER RELEVANT DATA AND INFORMATION ................................................. 24-1
25 INTERPRETATION AND CONCLUSIONS ............................................................ 25-1
26 RECOMMENDATIONS ......................................................................................... 26-1
27 REFERENCES ...................................................................................................... 27-1
28 DATE AND SIGNATURE PAGE ............................................................................ 28-1
29 CERTIFICATE OF QUALIFIED PERSONS ........................................................... 29-1
30 APPENDICES ....................................................................................................... 30-1


Page ii
LIST OF TABLES
PAGE
Table 1.1: Average values (g/L) of key components and ratios of the Maricunga brine 1-3
Table 1.2: Summary of mineral resources April 9, 2012 ............................................ 1-4
Table 1.3: Lithium and potassium resources expressed as compounds ....................... 1-4
Table 1.4: Recommended budget ................................................................................ 1-5
Table 1.5: Property status ............................................................................................ 1-6
Table 1.6: Comparative chemical composition of natural brines .................................. 1-7
Table 1.7: Summary of mineral resources - April 9, 2012 1-9
Table 4.1: Property status ............................................................................................ 4-2
Table 4.2: Other Properties..4-4
Table 5.1: Average monthly temperature at the Marte Lobo project ............................. 5-1
Table 5.2: DGA station with historical precipitation records .......................................... 5-3
Table 5.3: Selected PUC-DGA weatherstations with partial precipitation records ......... 5-3
Table 5.4: Monthly solar radiation data for the Marte Lobo Stations ............................. 5-8
Table 5.5: Evaporation rates used for the basin water balance .................................. 5-11
Table 6.1: Corfo historic resource estimate Salar de Maricunga ................................... 6-2
Table 6.2: SLM lithium assay results summary ............................................................. 6-3
Table 6.3: Historic SLM lithium resource estimate ........................................................ 6-3
Table 6.4: Historic SLM lithium resource estimate ........................................................ 6-4
Table 7.1: Water balance for the Salar de Maricunga basin ......................................... 7-9
Table 7.2: Average, max, min, assays (g/l) and density (g/cm
3
) results ...................... 7-11
Table 7.3: Average values (g/l) of key components and ratios of the Maricunga
brine ......................................................................................................... 7-11
Table 7.4: Comparative chemical composition of natural brines (weight %) ............... 7-13
Table 9.1: Results of trench pumping tests.9-11
Table 10.1: Sonic borehole locations ......................................................................... 10-3
Table 10.2: Summary of RC drilling program ............................................................. 10-5
Table 11.1: List of analyses requested from the University of Antofagasta and Alex
Steward Argentina S.A. Laboratories ...................................................... .11-6
Table 11.2: Standards analysis results from U. Antofagasta .................................... 11-15
Table 11.3: Check assays (U. Antofagasta vs Alex Steward): RMS regression
statistics ................................................................................................. 11-16
Table 11.4: Check assays between the U.Antofagasta and Alex Steward. .............. 11-17


Page iii
Table 11.5: Duplicate analysis from the U. Antofagasta .......................................... 11-20
Table 11.6: Results of laboratory specific yield (S
y
) analyses ................................... 11-26
Table 11.7: Preliminary BGS porosity and specific yield data ................................... 11-27
Table 13.1: Chemical composition (% weight) of brines used in the test work ............ 13-2
Table 13.2: Brine compositions during evaporation of the untreated brine .................. 13-3
Table 13.3: Salt compositions during evaporation of the untreated brine ................... 13-4
Table 13.4: Crystalized salts in the harvest ................................................................ 13-5
Table 13.5: Brine compositions during evaporation of the treated brine.13.8
Table 13.6: Salt compositions during evaporation of the treated brine13.8
Table 14.1: Average lithium and potassium grades .................................................... 14.2
Table 14.2: Summary of mineral resources April 9, 2012 .....14.17
Table 14.3: Lithium and potassium resources expressed as compounds14.17
Table 25.1: Average values (g/L) of key components and ratios of the Maricunga
brine..25-2
Table 25.2: Summary of mineral resources April 9, 2012..25-3
Table 26.1: Recommended budget..26-1

LIST OF FIGURES
PAGE
Figure 1.1: Comparision of brines from various salars in Janecke Projection .............. 1-8
Figure 4.1: Project location map ................................................................................... 4-1
Figure 4.2: Property location map ................................................................................. 4-3
Figure 5.1: Isoterm map for Salar de Maricunga .......................................................... 5-2
Figure 5.2a: Precipitation data for the Maricunga weather station (PUC-DGA) for
2007/2008 .................................................................................................. 5-4
Figure 5.2b: Precipitation data for the Pedernales Sur weather station (PUC-DGA) for
2007/2008 .................................................................................................. 5-4
Figure 5.3: Precipitation data for the Marte and Lobo stations for 2009/2010 ............... 5-5
Figure 5.4: Isohyet map for Salar de Maricunga ........................................................... 5-6
Figure 5.5: Solar radiation distribution in Chile ............................................................ 5-8
Figure 5.6: Average hourly solar radiation intensity at the Marte and Lobo stations for
2009/2010 ................................................................................................. 5-9
Figure 5.7: Elevation versus average annual pan evaporation ................................... 5.10


Page iv
Figure 5.8: Monthly distribution of average annual pan evaporation ......................... 5-11
Figure 5.9: Map of the Maricunga hydrographic basin ............................................... 5-14
Figure 6.1: Location map of wells drilled by Compania Mantos de Oro and Chevron
during 1988 and 1990 ................................................................................ 6-6
Figure 6.2: Lithological logs of Compania Mantos de Oro wells SP-2, SR-3 and
SR-6........................................................................................................... 6-7
Figure 6.3: Lithological logs of Compania Mantos de Oro wells SR-1, Sr-2, SR-4, SP-4
and Chevron well CAN-6 ........................................................................... 6-8
Figure 7.1: Regional geological map of the Maricunga basin ....................................... 7-4
Figure 7.2: Geomorphology of the Maricunga basin ..................................................... 7-6
Figure 7.3: General surface and groundwater flow patterns in the Salar de Maricunga
basin ....................................................................................................... 7-10
Figure 7.4: Comparison of brines in Janecke Projection ............................................ 7-13
Figure 9.1: Seismic refraction survey plan ................................................................... 9-2
Figure 9.2: Seismic tomography Line S1 .................................................................... 9-5
Figure 9.7: Seismic tomography Line S6..9-9
Figure 9.8: Test trench T6 in the upper halite zone ................................................... 9-11
Figure 9.8a-e: Pumping test analyses for trench pumping tests T1, T2, T3, T5, and
T6.9-12/13
Figure 10.1: Location map of the sonic bores (C1-C6) and RC holes (P1-P3) ........... 10-2
Figure 10.2: Sonic drilling operation ......................................................................... 10-3
Figure 10.3: Collecting RC airlfit flow measurement ................................................. 10-6
Figure 10.4: Installation of temporary casing during RC flooded well drilling ............. 10-6
Figure 10.5a-b: Analyses of P1 and P2 airlift recovery tests10-7
Figure 11.1: Collection of field parameters of the brine samples at the wellhead ...... 11-2
Figure 11.2: Porosity samples and brine samples .................................................... 11-3
Figure 11.3: RC drill chip samples ............................................................................ 11-4
Figure 11.4: Lithium results for Standard A (round robin left side) and Standard A
samples (14) inserted in the sample stream (right side) ........................... 11-9
Figure 11.5: Potassium results for Standard A (round robin left side) and Standard A
samples (14) inserted in the sample stream (right side) ......................... 11-10


Page v
Figure 11.6: Magnesium results for Standard A (round robin left side) and Standard A
Figure 11.7: Lithium results for Standard B (round robin left side) and Standard B
Figure 11.8: Potassium results for Standard B (round robin left side) and Standard B
Figure 11.9: Magnesium results for Standard B (round robin left side) and Standard B
Figure 11.10: Lithium results for Standard C (round robin left side) and Standard C
Figure 11.11: Potassium results for Standard C (round robin left side) and Standard C
Figure 11.12: Magnesium results for Standard C (round robin left side) and Standard C
Figure 11.13: RMA plot-check samples for the fitted multiple regression model for
lithium (mg/l) .......................................................................................... 11-18
potassium (mg/l) .................................................................................... 11-18
magnesium (mg/l) .................................................................................. 11-19
Figure 11.16: RMA plot-duplicate samples for the fitted multiple regression model for
lithium (mg/l) .......................................................................................... 11-21
Figure 11.17: RMA plot-duplicate check samples for the fitted multiple regression model
for potassium (mg/l) ............................................................................... 11-21
magnesium (mg/l) .................................................................................. 11-22
Figure 13.1: General view of the evaporation chambers ............................................ 13-2
Figure 13.2: Evaporation curves plotted versus % lithium in brine ............................ 13-6
Figure 13.3: Simulated representation of the evaporation path in the aqueous
quartenary systemof Ca-Mg-Li ................................................................. 13-7
Figure 13.4: Evaporation path of the untreated Maricunga brine in the Janecke diagram
of the aqueous quinary system (Na
+
, K
+
, Mg
++,
SO
4
=
, Cl
-
) at 25
0
C ........... 13-7
Figure 13.5: Evaporation path of the treated Maricunga brine in the Janecke diagram of
the aqueous quinary system (Na+, K+, Mg++, SO4=, Cl-) at 25
0
C .......... 13-9
Figure 14.1: Correlation lithium-porosity .................................................................... 14-2


Page vi
Figure 14.2: Parameters used to infer the experimental variograms .......................... 14-4
Figure 14.3: Lithium vertical direction ....................................................................... 14-4
Figure 14.4: Lithium in N-S direction ......................................................................... 14-5
Figure 14.5: Lithium in E-W direction ........................................................................ 14-5
Figure 14.6: Porosity in N-S direction ....................................................................... 14-6
Figure 14.7: Porosity in E-W direction ....................................................................... 14-6
Figure 14.8: Porosity in vertical direction ................................................................... 14-7
Figure 14.9: Grid characteristics, domain definition, and view of the lithium
concentrations in the boreholes ............................................................... 14-8
Figure 14.10: The results of kriging lithium concentration .......................................... 14-9
Figure 14.11: The results of kriging porosity .............................................................. 14-9
Figure 14.12: Three scenarios (realizations) for lithium concentration ..................... 14-10
Figure 14.13: Three scenarios for porosity .............................................................. 14-10
Figure 14.14: Systematic view of the total estimates ............................................... 14-12
Figure 14.15: Lithium grade distribution ................................................................... 14-12
Figure 14.16: Potassium grade distribution ............................................................. 14-13
Figure 14.17: Lithium concentration distribution at selected depths ......................... 14-14
Figure 14.18: Potassium concentration distribution at selected depths...14-15
Figure 14.19: Porosity distribution at selected depths .............................................. 14-16
Figure 19.1: Lithium demand by end use ................................................................... 19-1
Figure 19.2: Lithium consumption 2000 2011 ......................................................... 19-2
Figure 19.3: Demand forecast for lithium ................................................................... 19-2


Page 1-1
1 EXECUTIVE SUMMARY
Introduction
This report (the Report) was commissioned by Mr. Luis Saenz, Chief Executive Officer
and Mr. Tom Currin, Chief Operating Officer of Li3 Energy (the Company or Li3). The
report details the results of an exploration program on the mineral claims held by the
Company in Salar de Maricunga in the Province of Copiapo, III Region of northern Chile.
The resource estimates are for lithium and potassium contained in brine.

This report has been prepared in conformance with the requirements of National
Instrument 43-101 Standards of Disclosure for Mineral Projects and the associated
Companion Policy 43-101CP and Form 43-101F1 of the Canadian Securities
Administrators (modified June 24, 2011) and the associated Best Practice Guidelines for
Industrial Minerals and Mineral Processing as issued by the Canadian Institute of Mining
and Metallurgy. The Report also includes technical judgment of appropriate additional
technical parameters to accommodate certain specific characteristics of minerals hosted
in liquid brine as outlined in Ontario Securities Commission Staff Notice 43-704; the draft
Best Practice Guidelines for Reporting Brine Resources and Reserves as prepared by
one of the authors (Hains) and as discussed by Houston (Houston et al, 2011).

Conclusions
The Maricunga property is located approximately 160 km northeast of Copiapo in the III
Region of northern Chile at an elevation of approximately 3,800 masl. The property
comprises 1,438 ha as six mineral claims known as Litio 1 through Litio 6 located in the
northeast section of the Salar de Maricunga.

The Maricunga basin comprises a large drainage basin with an area of approximating
2,200 km
2
. It is structurally controlled to the west by mountains which have been raised
by inverse faults that expose a basement sequence ranging in age from Upper
Paleozoic to Lower Tertiary. To the southeast, the basin limit coincides with the Chilean-
Argentine frontier, which is defined by a line of volcanic complexes with elevations up to
6,749 m (Nevada Tres Cruces) and a range of ages between 26 Ma and 6 Ma. Some of
the volcanic complexes are associated with the characteristically auriferous
mineralization of the Maricunga Belt. The eastern limit of the basin is marked by the
Cordillera Claudio Gay, a North-South trending mountain chain resting on a basement of
Middle to Upper Paleozoic rocks and exposing deformed volcanoclastic sequences of


Page 1-2
Upper Oligocene to Lower Miocene rocks which represent remnants of the volcanic arc
preserved on the margins of the Maricunga basin.

The Salar de Maricunga is located in the northern part of the Maricunga basin and
covers some 140 km. The Salar is surrounded by alluvial deposits on the north, east
and south, and by volcanic deposits on the west.

The Salar itself is in-filled with alternating sequences of evaporates and clastic
sediments. Results of drilling carried out on the Li3 property indicate the presence of an
upper mixed halite sequence that consists of massive halite beds and halite mixed with
clay and silt-sized sediments with a combined thickness from 3 m to 66 m. This upper
zone is underlain by a sequence of silt and clays that are inter-bedded with coarser
grained sands, gravels, conglomerates, and volcanic ashes. The deepest hole drilled
on the property to 192 m did not insect bedrock.

Results of drainable porosity (specific yield) testing carried out by Daniel B Stephens
Laboratory in the USA indicate that the upper halite mix zone has an average drainable
porosity of 3.4 percent, the sand mix units have an average porosity of 6.1 and the silt
clay mixed layers 1.2 percent. Results of six pumping tests carried out on the upper
halite mix zone indicate average specific yield values of 20 percent and an average
hydraulic conductivity of 89 m/d, indicative of very permeable conditions in the upper
brine aquifer.

Salar de Maricunga is classified as a mixed type salar of the Na-Cl-Ca/SO4 system. The
brines from Maricunga are solutions saturated in sodium chloride with total dissolved
solids (TDS) of 26% (316 g/L) as an average, although in most areas exceeding 27%.
The average density is 1.200 g/cm
3
. The other components present in these brines,
which constitute an aqueous complex system and exist also in other natural brines in
Argentina, Bolivia and Chile are the following: K, Li, Mg, Ca, SO
4,
HCO
3
and B, which
below pH 7 exists predominantly as un-dissociated H
3
BO
3
. Interesting values of
strontium (mean of 290 mg/L) also have been detected by ICP analysis in the Maricunga
brine. Table 1.1 provides an overview of the key components and ratios for the
Maricunga brine.


Page 1-3
Table 1.1: Average values (g/L) of key components and ratios of the Maricunga brine
K Li Mg Ca SO4 B Mg/Li K/Li (SO4+2B)/(Ca+Mg)
8.97 1.25 8.28 12.42 0.72 0.61 6.63 7.18 0.184

The objectives of the 2011 drilling campaign were to carry out drilling on a specified grid
to allow the estimation of measured in-situ brine resources over the Li3 mineral claims
in Salar de Maricunga. The drilling method selected was based on the need to allow for
the collection of continuous core from which undisturbed samples at specified depth
intervals could be prepared for laboratory porosity analyses and for the collection of
depth-representative brine samples at specified depth intervals without possibility of
contamination by drilling fluids.

Six sonic boreholes were completed to a depth of 150 m. Undisturbed samples were
collected from the sonic core at three meter intervals for porosity analyses (318
samples). Brine samples were collected during the sonic drilling at three meter intervals
for chemistry analyses (431 primary main samples and 192 QA/QC samples). All sonic
boreholes were completed as observation wells on completion of drilling.

A total of 915 m of exploration RC drilling was carried out for the collection of chip
samples for geologic logging, brine samples for chemistry analyses and airlift data to
assess relative aquifer permeability. The RC boreholes were completed as observation
wells for use during future pumping tests. Two test production wells were installed to a
total depth of 150 m each for future pumping trials.

A seismic tomography survey was carried out (23 line km) to help define basin lithology
and basin geometry. Six test trenches were completed to a depth of 3 m to carry out
shallow pumping trials. 24 hour pumping tests were carried out in each trench.

Evaporation test work was initiated on the Maricunga brine at the University of
Antofagasta to evaluate the suitability of conventional brine processing techniques. Test
work was also initiated by Li3s strategic partners to evaluate the application of
proprietary technology on the recovery of lithium. This test work will continue throughout
2012 and 2013.


Page 1-4
Table 1.2 summarizes the resource estimate prepared for the Li3 mineral claims in Salar
de Maricunga. It is in the opinion of the authors that the brine chemistry and porosity
data sets developed for the project are adequate and appropriate to carry out such
resource estimates. Based on drilling and exploration results of the 2011 campaign the
brine deposit remains open in all directions beyond the boundaries of the Li3 claims and
at depth.

Table 1.2: Summary of mineral resources April 9, 2012
Lithium Potassium
Measured Inferred Measured Inferred
Area (km
2
) 14.38 7.06 14.38 7.06
Depth interval (m) 0-150 150-180 0-150 150-180
Aquifer volume (km
3
) 2.157 0.212 2.157 0.212
Avg grade (g/m
3
) 50 50 360 360
Lithium metal (t) 107,850 10,590
Potassium (t) 776,250 76,320
Notes:
1. CIM definitions were followed for Mineral Resources.
2. The Qualified Persons for this Mineral Resource estimate are Donald H. Hains, P. Geo and
Frits Reidel, CPG.
3. No cut-off values have been applied to the resource estimate
4. Numbers may not add due to rounding.

The resources estimated above translate to the following lithium and potassium
resources expressed as lithium carbonate and potash (Table 1.3).

Table 1.3: Lithium and potassium resources expressed as compounds
Lithium carbonate (t) Potash (t)
574,064 56,368
1,482,638 145,771

Results of airlift testing during the RC exploration drilling program and pumping tests on
test trenches indicate that future brine production can be achieved through a
combination of production wells and open trenches. The analyses of brine chemistry
indicate that the brine is amenable to lithium and potash recovery through conventional
technology. It is believed that through the application of proprietary technology
developed by Li3s strategic partners, lithium recovery from the Maricunga brine can be
significantly enhanced and may range from 45 percent to more than 70 percent. Pilot
scale test work will be initiated this year on the project site to further test lithium
recoveries using these technologies.


Page 1-5

Recommendations
It is the recommendation of the authors that a full feasibility study be completed for the
project. This work need to include:

Initiate pilot scale testing for the recovery of lithium and potash in the Salar.

Carry out long-term pumping tests on production wells P1 and P2 and develop a
three dimensional numerical groundwater flow model to assess the long-term
behavior of the brine aquifer and the effects of brine abstraction on the
Maricunga watershed.

Complete all environmental permitting for the project.

Finalize the selection of the site for the project processing facilities

Complete a feasibility-level design for the project infrastructure.

A two-phase program of work is proposed to accomplish the recommendations noted
above. The recommended budget to accomplish the work is detailed in Table 1.4. The
Phase 1 investigation will involve pilot scale testing of proprietary and conventional
process technologies. Based upon the results of and successful completion of Phase 1
work, the optimum process technology will be selected and further developed and tested
during Phase 2. The Phase 2 work program is contingent upon the successful
completion of Phase 1.


Page 1-6

Table 1.4: Recommended budget
hase 1: re||m|nary Des|gn & 1est|ng
Item Cost (USD)
Environmental baseline studies 400,000
Salar site facility development 820,000
Laboratory and pilot plant testing 980,000
Subtota| hase 1 2,200,000
hase 2: Demonstrat|on & Lng|neer|ng
Final environmental studies and permitting 905,000
Process demonstration test facilities 1,900,000
Detailed process engineering 1,245,000
Subtota| hase 2 4,0S0,000

1ota| hase 1 and 2 6,2S0,000


Page 1-7
TECHNICAL SUMMARY

Property description and location
Region of northern Chile at an elevation of approximately 3,800 masl. Figure 4.1 shows
the location of the Project. The property is more particularly described as being centered
at approximately UTM Zone 19 493000 E, 7025000 N (PSAD 56 datum). The property
northeast section of the Salar de Maricunga (Figure 4.2)

Land tenure
The property is held as six mineral concessions registered under the names Sociedades
Legales Mineras (SLM Litio) LITIO 1 to 6 as detailed in Table 1.5:

Table 1.5: Property status
PROPERTY MINING ROLE
NUMBER
SURFACE
(hectares)
REGISTERED OWNER
Litio 1, 1 al 29 03201-6516-4 130 SLM Litio 1 de la S. Hoyada de Maricunga
Total 1.438

Existing infrastructure
Local infrastructure at the salar includes National Highway 31 and an electrical power
line running parallel to the highway. There is a customs post at the north end of the Salar
which is staffed on a 24-hour basis. Copiapo is located approximately 160 km west from
the property. A full range of mining related services is available in Copiapo.

History
SLM Litio acquired the Litio 1 6 concessions in 2004. Numerous other claim holders,
including Codelco and SQM, have extensive holdings on the Salar adjacent to and to the
south of the Litio 1-6 claims.

Previous resource estimate for the property have been based on surface sampling and
shallow drilling. These estimates are detailed in Tables 6.3, 6.4 and 6.5. The historical
results, while not NI 43-101 compliant, do show high lithium values in excess of 1,000


Page 1-8
g/L and good potassium values. A due diligence NI 43-101 report on the Maricunga
prospect prepared by one of the authors (Hains) classified Maricunga as a Property of
Merit worthy of additional exploration.

Geology and mineralization
The Salar de Maricunga is an intermediate type salar of the Na-Cl-Ca/SO4 system. The
Salar compares favourably to other salars within the Chilean-Argentinian altiplano region
as illustrated by Table 1.6 and Figure 1.1.

Table 1.6: Comparative chemical composition of natural brines (weight %).

Salar de
Maricunga
(Chile)
Silver
Peak
(USA)
Salar de
Atacama
(Chile)
Hombre
Muerto
(Argentina)
Salar de
Cauchari
(Argentina)
Salar del
Rincon
(Argentina)
Salar de
Uyuni
(Bolivia)
Na 7.14 6.20 7.60 9.79 9.55 9.46 8.75
K 0.748 0.53 1.85 0.617 0.47 0.656 0.72
Li 0.104 0.023 0.150 0.062 0.052 0.033 0.035
Mg 0.69 0.03 0.96 0.085 0.131 0.303 0.65
Ca 1.035 0.02 0.031 0.053 0.034 0.059 0.046
SO4 0.06 0.71 1.65 0.853 1.62 1.015 0.85
Cl 16.06 10.06 16.04 15.80 14.86 16.06 15.69
HCO3 0.053 n.a. Traces 0.045 0.058 0.030 0.040
B 0.051 0.008 0.064 0.035 0.076 0.040 0.020
Density 1.200 n.a. 1.223 1.205 1.216 1.220 1.211
Mg/Li 6.63 1.43 6.40 1.37 2.52 9.29 18.6
K/Li 7.19 23.04 12.33 9.95 9.04 20.12 20.57
SO4/Li 0.577 30.87 11.0 13.76 31.06 31.13 24.28
SO4/Mg 0.087 23.67 1.72 10.04 12.33 3.35 1.308
Ca/Li 9.95 0.87 0.21 0.86 0.65 1.79 1.314
References: Published data and information from the authors


Page 1-9
Figure 1.1: Comparison of brines from various salars in Janecke Projection

Exploration status
The Maricunga project is classified as an Exploration Project.


Page 1-10

Mineral resources
Mineral resources have been estimated for the property as detailed in Table 1.7:

Lithium Potassium
Area (km
2
) 14.38 7.06 14.38 7.06
Depth interval (m) 0-150 150-180 0-150 150-180
Aquifer volume (km
3
) 2.157 0.212 2.157 0.212
Avg grade (g/m
3
) 50 50 360 360
Potassium (t) 776,250 76,320
Notes:
2. The Qualified Persons for this Mineral Resource estimate are Donald H. Hains, P. Geo and Frits
Reidel, CPG.

Mineral reserves
No mineral reserves have been estimated for the property.

Mining method
test trenches indicate that future brine production can likely be achieved through a
combination of production wells and open trenches.

Mineral processing
No mineral processing flow sheet has been developed for the project. Investigations are
currently in progress to select a suitable process route.

Project infrastructure
Project infrastructure for development of the project has not yet been defined.

Market studies
Market studies are currently in progress. Third party market forecasts project a robust
demand for lithium and lithium derivatives and for potash.


Page 1-11

Environmental, permitting and social considerations
Li3 is currently undertaking various studies related to environmental, permitting and
community relations. The impact of the results of these studies on the project is
unknown.

Capital and operating cost estimates
No capital and operating cost estimates for development of the project have been
prepared.


Page 2-1
2 INTRODUCTION
2.1 Objectives
This report (the Report) was commissioned by Mr. Luis Saenz, Chief Executive Officer
and Mr. Tom Currin, Chief Operating Officer of Li3 Energy (the Company or Li3). The
report details the results of an exploration program on the mineral claims held by the
Company in Salar de Maricunga in the Province of Copiapo, III Region of northern Chile.
The resource estimates are for lithium and potassium contained in brine.

This report has been prepared in conformance with the requirements of National
Instrument 43-101 Standards of Disclosure for Mineral Projects and the associated
Companion Policy 43-101CP and Form 43-101F1 of the Canadian Securities
Administrators (modified June 24, 2011) and the associated Best Practice Guidelines for
Industrial Minerals and Mineral Processing as issued by the Canadian Institute of Mining
and Metallurgy. The Report also includes technical judgment of appropriate additional
technical parameters to accommodate certain specific characteristics of minerals hosted
in liquid brine as outlined in Ontario Securities Commission Staff Notice 43-704; the draft
Best Practice Guidelines for Reporting Brine Resources and Reserves as prepared by
one of the authors (Hains) and as discussed by Houston (Houston et al, 2011).

2.2 Sources of information
Site visits were carried out by Don Hains, Frits Reidel, Peter Ehren and Pedro Pavlovic
on numerous occasions during 2011 and 2012. Mr. Reidel was present throughout the
drilling and sampling program.

Discussions were held with personnel from Li3 Energy:
Mr. Tom Currin, P. Eng., Chief Operating Officer, Li3 Energy
Mr. Luis Saenz, Chief Executive Officer, Li3 Energy
Mr. Roberto Gaona, Chief Administrative Officer, Li3 Energy

The report was prepared by Don Hains, P.Geo and Frederik (Frits) Reidel, CPG, both
qualified persons (QPs) and who are independent of Li3 as such terms are defined by
NI 43-101. The authors have visited the project on numerous occasions during 2011
and 2012 and have relevant experience in the evaluation of brine deposits in the South
America. Mr. Hains has assumed overall responsibility for the report. Sections 7.4, 11,


Page 2-2
12, 13 and 17 of the report have been prepared by Peter Ehren, M.Sc., M.AusIMM and
Pedro Pavlovic, M.Sc. (Chem. Eng.). Mr. Ehren is a consulting processing engineer and
prepared the report sections detailing brine characterization, brine processing and plant
development. Mr. Pavlovic is a chemical engineer and was responsible for the report
sections detailing quality control and quality assurance, metallurgical testing and
mineralization. Mr. Ehren and Mr. Pavlovic have both visited the Project during 2011 on
several occasions and have abundant relevant experience in the evaluation of brine
deposit chemistry and development and construction of brine processing plants. Both
Mr. Ehren and Mr. Pavlovic are independent of LI3 as defined under NI 43-101. The
authors have assumed responsibility for those sections of the report prepared by Mr.
Ehren and Mr. Pavlovic.

The authors would like to thank Luis Saenz, CEO, Tom Currin, COO, Marius Calmet,
Fernando Martin, Geologist and all field staff in the Salar for their support during the
course of the exploration program.

Information from historical brine exploration work carried out on the Li3 Maricunga claims
by its previous owners is described in Section 6.2. A significant amount of regional
hydrogeological and hydrochemistry information is available for the Salar de Maricunga
basin from studies carried out by the Direccion General de Aguas (DGA) in conjunction
with the University Catolica (PUC) on the Sistema Piloto III Region: Salar de Pedernales
y Salar de Maricunga between 2008 and 2009. The DGA-PUC investigation was
focused on the evaluation of water resources for the potential development of new water
supplies. Section 6.3 provides a list of the relevant hydrogeological studies that are
used as a source of information for the preparation of this Report.

The documentation reviewed, and other sources of information, are listed at the end of
this report in Section 27 References.


Page 2-3
LIST OF ABBREVIATIONS
All currency in this report is US dollars (US$) unless otherwise noted.
micron km
2
square kilometer
C degree Celsius kPa kilopascal
F degree Fahrenheit kVA kilovolt-amperes
g microgram kW kilowatt
A ampere kWh kilowatt-hour
a annum L litre
bbl barrels L/s litres per second
Btu British thermal units M metre
C$ Canadian dollars M mega (million)
cal calorie m
2
square metre
cfm cubic feet per minute m
3
cubic metre
cm centimetre Min minute
cm
2
square centimetre MASL metres above sea level
d day Mm millimetre
dia. diameter Mph miles per hour
dmt dry metric tonne MVA megavolt-amperes
dwt dead-weight ton MW megawatt
ft foot MWh megawatt-hour
ft/s foot per second m
3
/h cubic metres per hour
ft
2
square foot opt, oz/st ounce per short ton
ft
3
cubic foot Oz Troy ounce (31.1035g)
g gram Ppm part per million
G giga (billion) Psia pound per square inch absolute
Gal Imperial gallon Psig pound per square inch gauge
g/L gram per litre RL relative elevation
g/t gram per tonne S second
gpm Imperial gallons per minute St short ton
gr/ft
3
grain per cubic foot Stpa short ton per year
gr/m
3
grain per cubic metre Stpd short ton per day
hr hour T metric tonne
ha hectare Tpa metric tonne per year
hp horsepower Tpd metric tonne per day
in inch US$ United States dollar
in
2
square inch USg United States gallon
J joule USgpm US gallon per minute
k kilo (thousand) V volt
kcal kilocalorie W watt
kg kilogram Wmt wet metric tonne
km kilometre yd
3
cubic yard
km/h kilometre per hour Yr year


Page 3-1
3 RELIANCE ON OTHER EXPERTS
The authors have relied on the following experts:

Sasha Bolling, Managing Director, Geophysical Exploration and Consulting S.A.,
regarding matters relating to seismic data processing and interpretation.

Gregoire Mariethoz, PhD, Hydrologist, School of Civil and Environmental
Engineering, University of New South Wales, Australia, regarding matters relating
to the digital resource modeling.

Baker & McKenzie Abogados in Santiago de Chile for legal opinions on property
tenure status

The information, conclusions, opinions, and estimates contained in this Report are
based on:
Information available to the authors at the time of preparation of this report,

Assumptions, conditions, and qualifications as set forth in this report, and

Data, reports, and other information supplied by Li3 and other third party
sources.

For the purpose of this report, the authors have relied on ownership information provided
by Li3. Li3 has relied on a legal opinion by Baker and McKenzie dated March 13, 2012
respecting legal title to the property. The authors have not researched property titles or
mineral rights for the Maricunga Project and express no opinion as to the ownership
status of the property.

Except for the purposes legislated under provincial securities laws, any use of this report
by any third party is at that partys sole risk.


Page 4-1
4 PROPERTY DESCRIPTION AND LOCATION
4.1 Location and property dimensions

Region of northern Chile at an elevation of approximately 3,800 masl. Figure 4.1 shows
the location of the Project. The property is more particularly described as being centered
at approximately UTM Zone 19 493000 E, 7025000 N (PSAD 56 datum). The property
northeast section of the Salar de Maricunga (Figure 4.2)

Figure 4.1: Project location map

4.2 Tenure
The property is held as six mineral concessions registered under the names Sociedades
Legales Mineras (SLM Litio) LITIO 1 de la Sierra Hoyada de Maricunga, LITIO 2 de la
Sierra Hoyada de Maricunga, LITIO 3 de la Sierra Hoyada de Maricunga, LITIO 4 de la
Sierra Hoyada de Maricunga, LITIO 5 de la Sierra Hoyada de Maricunga y LITIO 6 de la
Sierra Hoyada Maricunga. Each of the claims is subdivided into minas of varying size
(Table 4.1 and Figure 4.2). The properties are held as Exploitation Mining Concessions.


Page 4-2

Table 4.1: Property status
PROPERTY MINING ROLE
NUMBER
SURFACE
(hectares)
REGISTERED OWNER
Total 1.438
Source: Li3 Energy Inc.

The property boundaries are recorded as UTM coordinates (PSAD 56 datum) based on
digital GPS measurement. National geodetic survey markers have been used as base
reference points for the GPS measurements.

The claims are legally incorporated and registered, with the claims being published in the
national register effective September 1, 2004. Baker and McKenzie Attorneys at Law in
Santiago, Chile have prepared a legal opinion dated March 13, 2012 regarding the Li3
claims listed in Table 4.1 which states that:

The Mining Projects Agreements have been duly executed and delivered by the
parties thereto and constitute legal, valid and binding obligations of all parties,
enforceable against them in accordance with their terms.

All titles of the Mining Tenements (set out Table 4.1) are in good standing, with all the
corresponding licenses being duly paid, and there are no encumbrances on such
Mining Tenements.

The property consists of an area in the northeast of the nucleus of the salar and thus all
of the property can be considered to be mineralized. The property is bordered on the
north and east by a national highway which provides access to Argentina. An electrical
power line runs parallel to the highway. There are no known environmental liabilities
associated with the property.

Li3 acquired a 60% interest in the property effective May 20, 2011 by paying Sociedades
del Litio (the Sellers) $6,375,000 in cash and an aggregate of 127,500,000 shares paid
to the Sellers and their agents. This includes restrictive trading/hedging covenants which
include a 9 month lock on 50% of the shares, with the remaining 50% locked up for 18
months. In addition, the Sellers received the right to the appointment of 3 nominees to
the Board of Directors of Li3.


Page 4-3
Figure 4.2: Property location map


Page 4-4
Annual canon payments (concession fees) on the individual minas are due by the end of
February. Li3 reports that all required payments have been made for the current year
(2012) and the next payments are due February, 2013. Cann payments total CHP
1,889,160 per annum.

4.3 Permits

Li3 obtained the necessary permits from the Servicio Nacional de Geologia y Mineria
(Sernageomin) of the III Region in Copiapo on May, 20 2011 to initiate exploration
activities on the Litio 1-6 claims for an indefinite period of time.

4.4 Other properties

Li3 holds 4,900 ha as Exploration Mining Concessions near Copiapo as a potential site
for a lithium brine processing plant as detailed in Table 4.2. No exploration has been
conducted on the property and no further discussion of the property is contained in this
report.
Table 4.2: Other properties
PROPERTY SURFACE
(hectares)
Verde 1 200
Verde 2 300
Verde 3 300
Verde 4 300
Verde 5 300
Verde 6 300
Verde 7 200
Amarillo 2 300
Amarillo 3 300
Amarillo 4 300
Amarillo 5 300
Amarillo 6 300
Amarillo 7 300
Amarillo 8 300
Amarillo 9 200
Amarillo 10 100
Amarillo 11 300
Amarillo 12 300
Total 4,900


Page 5-1
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY
5.1 Accessibility
The Maricunga property is accessed from the city of Copiapo via National Highway 31.
Highway 31 is paved for approximately one-half of the distance and is a well maintained
gravel surface road thereafter. National Highway 31 extends through to Argentina.
Access to Maricunga from the city of El Salvador is via a well maintained gravel surface
highway. Occasional high snowfalls in the mountains may close the highways for brief
periods during the winter.

5.2 Climate

5.2.1 Temperature
The climate at the property is a dry, cold, high altitude desert. The average annual
temperature at Salar de Maricunga is estimated at 5 - 6
0
C as shown in Figure 5.1 (DGA
2009).

Long-term historical temperature data are not available for the immediate Projects area.
The DGA maintained Lautaro Embalso meteorological station (1,110 masl) located 160
km southwest of the Project area has average monthly temperature records available for
the period of 1966 through to date.

A weather station at the Marte Lobo Project site located in the southern extension of the
Maricunga basin at an elevation of 4,090 masl, (30 km to the south of the Project) has
average monthly temperature records available for the period between January 1997
and December 1998. Table 5.1 shows average monthly temperature data for the Marte
Lobo Project (Golder Associates 2011).

Table 5.1: Average monthly temperature at the Marte Lobo Project (
0
C)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
8.5 6.6 6.5 2.5 -0.5 -5.0 -3.5 -2.5 -0.5 1.0 3.7 5.8
(re-elaborated after Golder Associates 2011)


Page 5-2
Figure 5.1: Isotherm map for Salar de Maricunga

Source: DGA 2009


Page 5-3
5.2.2 Precipitation
Precipitation in Salar de Maricunga may occur during the months of January and
February as a result of Bolivian winter effects and during the months of June through
September. The intensity of these annual rainfall patterns are significantly influenced by
the El Nino-Southern Oscillation.

The nearest long-term historical precipitation records for the Project are available from
DGA maintained meteorological stations at Las Vegas (70 km northwest) at an elevation
of 2,250 masl and Pastos Grande (60 km WSW) at an elevation of 2,260 masl. No long-
term historical precipitation records are available for the III Region above 2,500 masl
elevation. Table 5.2 provides summary information of the Las Vegas and Pastos Grande
stations.

Table 5.2: DGA meteorological stations with historical precipitation records
Station BNA code Basin Elevation
(masl)
Distance
from Project
Record
Las Vegas 03210001-5 Rio Salado 2,250 70 km NW 1984 to date
Pastos Grande 03441001-1 Rio Copiapo 2,260 60 km WSW 1966 to date
Source: DGA, 2009

Additional rainfall records are available from selected weather stations that are part of
the Pilot System for the III Region operated by the Catolica University of Chile (PUC) in
conjunction with the DGA. Table 5.3 provides summary information for the Maricunga
and Pedernales Sur weather stations.

Table 5.3: Selected PUC-DGA weather stations with partial precipitation records
Station Basin UTM (PSAD 1956) Elevation
(masl)
Record
Maricunga Maricunga 7,000,372 mN 486,326 mE 3,852 2007 2008
Pedernales Sur Pedernales 7,049,016 mN 493,056 mE 3,774 2007 2008
Source: DGA, 2009

Figures 5.2a and 5.2b show monthly precipitation records for the Marigunca and
Pedernales Sur weather stations for the 2007/8 period. It is believed that these data are
representative of a relative dry year (DGA 2009).

Precipitation records collected at the Marte Lobo Project weather station during the
1997/1998 period show an annual cumulative precipitation (rainfall and snowfall water
equivalent) of 451 mm (Golder Associates 2011). Further analyses of rainfall records of
the III Region indicate that the 1997/8 cumulative precipitation coincides with a 100 year


Page 5-4
precipitation event. Additional precipitation data collected at the Marte and Lobo stations
between 2009 and 2010 are shown in Figure 5.3.

Average annual precipitation estimates were prepared as part the Balance Hidrico de
Chile (DGA 1987). Figure 5.4 shows an isohyet map for the Salars de Maricunga and
Pedernales. The map suggests that the average annual precipitation in Salar de
Maricunga is 100 - 150 mm.

Figure 5.2a: Precipitation data for the Maricunga weather station (PUC-DGA) for
2007/2008

Source: DGA 2009

Figure 5.2b: Precipitation data for the Pedernales Sur weather station (PUC-DGA) for
2007/2008

Source: DGA 2009

0
2
4
8
10
r
e
|
t
a
t
|
o
n

(
m
m
)
ar| unga (UC D stat|on) ra|n a|| data 200 200
0
2
4
8
10
r
e
|
t
a
t
|
o
n

(
m
m
)
ederna|es Sur (UC D stat|on) ra|n a|| data
200 200


Page 5-5
Figure 5.3: Precipitation data from the Marte and Lobo stations for 2009/2010

Source: AMEC 2011


Page 5-6
Figure 5.4: Isohyet map for Salar de Maricunga

Source: DGA 2009


Page 5-7
EDRA (1998) carried out a hydrogeological investigation for the Salar de Maricunga and
Piedra Pomez areas and described the following precipitation elevation relationship:

P = 0.038H - 53
Where:
P is average annual precipitation (mm); and H is elevation (masl)

Using this correlation the average annual precipitation for Salar de Maricunga is
estimated at 90 mm.

The DGA (2006) carried out a hydrogeological investigation for Salar de Maricunga in
which the following precipitation elevation relationship was developed:

P = 0.1H - 300
Where:
P is average annual precipitation (mm); and H is elevation (masl)

Using this correlation the average annual precipitation for Salar de Maricunga is
estimated at 75 mm.

Li3 is in the process of installing a weather station in Salar de Maricunga (to be operative
during Q2 2012) so that the results of previous precipitation studies and third party data
sets can be validated.

5.3.3 Solar Radiation

Solar radiation is the most important energy input for evaporation. Long-term solar
radiation data are not available for Salar de Maricunga directly. Regional solar radiation
estimates are shown in Figure 5.5 and suggest that solar radiation in Salar de Maricunga
falls in the range of 1,700 1,900 KWh/m
2
per year.

Partial solar radiation data are available from the Marte Lobo Project site and are
reported in Amec 2011. Table 5.4 shows monthly records solar radiation records in
Watts/m
2
for the Marte and Lobo stations.


Page 5-8

Table 5.4: Monthly solar radiation data (W/m2) for the Marte and Lobo Stations (Amec
2011)

Figure 5.5: Solar radiation distribution in Chile

Figure 5.6 shows the average hourly solar radiation intensity at the Marte and Lobo
stations calculated for the 2009/2010 period.


Page 5-9

Figure 5.6: Average hourly solar radiation intensity at the Marte and Lobo stations for
2009/2010

Source: AMEC 2011

Li3 is in the process of installing a weather station in Salar de Maricaunga (to be
operative during Q2 2012) so that local site-specific solar radiation data will become
available.

5.2.3 Evaporation

The DGA (2009) has developed a relationship between elevation and average annual
pan evaporation based on pan evaporation records from some 40 stations across the I,
II, and III Regions of northern Chile as shown in Figure 5.7. Based on this correlation
the annual average pan evaporation rate for Salar de Maricunga is estimated at 2,400
mm.


Page 5-10

Figure 5.7: Elevation versus average annual pan evaporation

Source: DGA 2009

A similar relationship between elevation and average annual pan evaporation has been
described by Houston (2006) as follows:
MAE
pan
= 4364 (0.59*A)
Where: MAE
pan
is mean annual pan evaporation (mm) and A is elevation (m) for
stations above 1,000 masl.

Using this correlation the mean annual pan evaporation rate for Salar de Maricunga is
estimated at 2,150 mm.

Houston (2006) further describes the effects of brine density on mean annual pan
evaporation rates as:
MAE
pan
= 10026 6993D; where D is fluid density

Applying this to Maricunga brine (D = 1.2 g/ml), the annual average brine pan
evaporation rate is estimated at 1,600 mm.

The DGA (2008) described the monthly distribution of average annual pan evaporation
based on observations made from records (1977-2008) of the Linzor (4,096 masl) and


Page 5-11
Inacaliri (4,000 masl) stations in the II Region of northern Chile. Figure 5.8 summarizes
this monthly distribution of the annual average pan evaporation (Golder Associates
2011).

Figure 5.8: Monthly distribution of average annual pan evaporation

Source: Golder Associates 2011

The DGA (2009) carried out a detailed field investigation program in Salar de Maricunga
to establish evaporation rates as a function of soil type and depth to groundwater. Table
5.5 summarizes the findings of this investigation.

Table 5.5: Evaporation rates used for the basin water balance (DGA 2009 and Golder
2011)
Type Mean annual evaporation rate (mm)
Open water 6.1
Humid soil 4.1
Vegas 2.1
Salar crust 1.8

Li3 is in the process of installing several Class A evaporation pans (fresh water and
brine) at the Project site (to be operative during Q2 2012) so that the results of previous
evaporation studies can be validated.


Page 5-12

5.3 Local Resources
Local resources are absent at the salar. Copiapo is a major regional mining center and
exploration tools and equipment and heavy mining equipment and machinery are
available.

5.4 Infrastructure
Local infrastructure at the salar include National Highway 31 and an electrical power line
running parallel to the highway. There is a customs post at the north end of the salar that
is staffed on a 24 hour basis.

Copiapo is a major city and provides a full range of services. Copiapo is serviced by
daily scheduled air service with connections to Santiago and other major cities in Chile,
as well as service to Argentina and Bolivia. The port of Caldera is located approximately
80 km west of Copiapo. The port has excellent dock facilities for general cargo, liquid
fuel unloading and bulk cargo. The port of Chaaral is located approximately 250 km
from the salar.

5.5 Physiography
The hydrographic basin of Salar de Maricunga covers 2,195 km
2
in the Altiplano of the III
Region. The average elevation of the basin is 4,295 masl while the maximum and
minimum elevations are 6,749 masl and 3,738 masl respectively. The Salar itself is
located in the northern extent of the hydrographic basin and covers 142.2 km
2
(DGA
2009).

Previous hydrological studies have included the Piedra Pomez basin to east in the
Maricunga watershed. This study does not include the Piedra Pomez basin and follows
the 2009 DGA convention as shown in Figure 5.9.

The principal surface water inflow into the lower part of basin occurs from Rio Lamas
which originates in Macizo de Tres Cruces. Average flow in Rio Lamas (at El Salto) is
measured at 240 l/s. All flow from the Rio Lamas infiltrate into the Llano de Cienaga
Redonda (DGA 2009).


Page 5-13
The second largest inflow to the lower part of the basin occurs from Quebrada Cienaga
Redonda. Average flow (at La Barrera) is measured at 20 l/s; all flow infiltrates also in to
the Llano de Cienaga Redonda (DGA 2009).

Laguna Santa Rosa is located at the southwest extent of the basin valley floor and is fed
mainly locally by discharge of groundwater. Laguna Santa Rosa drains north via a
narrow natural channel into the Salar itself. Additional groundwater discharge occurs
along the path of this channel and surface water flow has been recorded at 200 300 l/s
(DGA 2009). Tres Cruces National Park is located in the southern part of the Maricunga
watershed and includes Laguna Santa Rosa.


Page 5-14

Figure 5.9: Map of the Maricunga hydrographic basin

Source: DGA 2009


Page 6-1
6 HISTORY
6.1 Prior ownership and ownership changes
SLM Litio acquired the Litio 1 6 concessions in 2004. Numerous other claim holders,
including Codelco and SQM, have extensive holdings on the Salar adjacent to and to the
south of the Litio 1-6 claims.

6.2 Prior brine exploration
CORFO, under the aegis of the Comite de Sales Mixtas, (CORFO, 1982) conducted a
major study of the northern Chilean salars in the 1980s with the objective of determining
the economic potential of the salars for production of potassium, lithium, and boron.
CORFO undertook systematic hydrogeological and geological studies and sampling of
the various salars. Exploration work at Salar de Maricunga included sampling of shallow
pits (50 cm deep). It was determined that the phreatic level of the brine was at 15 cm
below the Salar surface. Estimates of contained mineral resources were developed
based on the assay results and assuming a constant porosity of 10% down to a 30 m
depth. CORFOs estimate of the contained resources at Salar de Maricunga is detailed
in Table 6.1.


Page 6-2
Table 6.1: Corfo historic resource estimate
1
Salar de Maricunga

1): Not 43-101 compliant and not to be relied upon. Provided for illustration purposes
only (Source: CORFO 1982)

The CORFO estimates were based on an irregular sample grid covering most of the salt
crust area. Assays were by atomic absorption (AA). No details on the standards
employed or sample handling procedures are available. The CORFO results must be
considered as illustrative only and are not to be relied upon.

SLM Litio drilled 58 vertical holes on a 500 m x 500 m grid in February, 2007. Each hole
was 20 m deep. The drilling covered all of the Litio 1 6 property holdings. Holes were
3.5 diameter and cased with either 40 mm PVC or 70 mm HDPE pipe inserted by hand
to resistance. Samples were recovered at 2 m to 10 m depth and 10 m to 20 m depth by
blowing the drill hole with compressed air and allowing recharge of the hole.
Subsequently, samples were taken from each drill hole from the top 2 m of brine. In total,
232 samples were collected and sent to Cesmec in Antofagasta for analysis. The 232
samples corresponded to the following samples intervals for each drill hole:

0 m 1 m
1 m 2 m
2 m 10 m
10 m - 20 m

Samples were analysed for lithium potassium, boron and magnesium. The results of the
sample analyses are summarized in Table 6.2.


Page 6-3

Table 6.2: SLM Lithium assay results summary 2007 drilling

Source: SLM Litio

The assay values are comparable to those obtained by CORFO in the 1981 exploration
program at Salar de Maricunga. Based on the assay results, SLM Litio 1-6 estimated
contained resources to a depth of 20 m. The surface area assumed for the resource
estimate was 1,450 ha and the assumed salar porosity was 10%. SLM Litio classified
these resources as indicated resources. The estimated resources are detailed in Table
6.3.
Table 6.3: Historic SLM Lithium resource estimate
1

1) not NI 43-101 compliant and not to be relied upon.
Source: SLM Litio

SLM assumed grade continuity to a depth of 100 m and a reduction in porosity from 10%
to 6% for salar depths between 20 m and 100 m. Resources from 20 m to 100 m depth
were classified by SLM Litio as inferred resources. Based on these assumptions, SLM
Litio estimated resources as follows (Table 6.4)


Page 6-4
Table 6.4: Historic SLM Lithium resource estimate
1

Resource for the 20 100 m depth interval

1) not NI 43-101 compliant and not to be relied upon.
Source: SLM Litio

There has been no brine production from the Salar de Maricunga.

6.3 Previous water exploration

A significant amount of hydrogeological and water resources studies have been carried
for the Maricunga basin in the past. Below is a list of work and references relevant to
this investigation.

Balance Hdrico de Chile, Direccin General de Aguas, 1987.

Mapa hidrogeolgico de la cuenca Salar de Maricunga: sector Salar de
Maricunga, Escala 1:100.000, Regin de Atacama. N Mapa: M62.- Autor: Iriarte
D., Sergio. SERNAGEOMIN, 1999.

Mapa hidrogeolgico de la Cuenca Salar de Maricunga: sector Cinaga
Redonda, escala 1:100.000, Regin de Atacama. NMapa: M65. Venegas, M.;
Iriarte, S. y Aguirre, I. SERNAGEOMIN, 2000.

Geologa del Salar de Maricunga, Regin de Atacama, Escala 1:50.000. N
Mapa: M54.- Autor: Tassara O., Andrs. SERNAGEOMIN, 1997.

Ref. 14 Mapa Hidrogeolgico de la Cuenca Campo de Piedra Pmez-Laguna
Verde.

Regin de Atacama, Escala 1:100.000. N Mapa: M66.- Autor: Santibez I.,
Venegas M. Formato JPG. SERNAGEOMIN, 2005.


Page 6-5

Geoqumica de Aguas en Cuencas Cerradas: I, II y III Regiones de Chile,
Volumen I, Sntesis. S.I.T N 51, de los autores Risacher, Alonso y Salazar,
Convenio de Cooperacin DGA UCN IRD, 1999.

Anlisis de la Situacin Hidrolgica e Hidrogeolgica de la Cuenca del Salar de
Maricunga, III Regin. DGA, Departamento de Estudios y Planificacin
(2006). S.D.T. N 255.

Hidrogeologa Sector Quebrada Piedra Pmez. EDRA, 1999.

Evaluation of the Hydrogeological Interconnection between the Salar de
Maricunga and the Piedra Pomez Basins, Atacama Region, Chile; An Isotope
and Geochemical Approach. Iriarte, Santibez y Aravena, 2001.

Levantamiento Hidrogeologico para el Desarrollo de Nuevas Fuentas de Agua en
Areas Prioritarias de la Zone Norte de Chile, Regiones XV, I, II, y III. Etapa 2
Sistema Piloto III Region Salares de Maricunga y Pedernales. Realizado por
Departamento de Ingeniera Hidraulica y Ambiental Pontifica Universidad Catolica
de Chile (PUC). SIT No. 195, Noviembre 2009.

Hidrogeologia Campo de Pozos Piedra Pomez- Compania Minera Casale;
prepared by SRK Consulting; May 2011.

Linea Base Hidrogeologica y Hidrologica Marte Lobo y Modelo Hidrogeologico
Cienaga Redonda Kinross Gold Corporation; prepared by Golder Associates,
June 2011.

Several drilling campaigns were carried out by Compania Mantos de Oro and Chevron
Minera Corporation of Chile between 1988 and 1990 during which a total of 10 wells
were installed around the perimeter of Salar de Maricunga as shown in Figure 6.1.
Figures 6.2 and 6.3 show the available lithological logs for these wells.


Page 6-6

Figure 6.1: Location map of wells installed by Compania Mantos de Oro and Chevron
during 1988 and 1990

Source: DGA 2009


Page 6-7
Figure 6.2: Lithological logs of Compania Mantos de Oro wells SP-2, SR-3 and SR-6

Source: DGA 2009


Page 6-8
Figure 6.3: Lithological logs of Compania Mantos de Oro wells SR-1, SR-2, SR-4, SP-4
and Chevron well CAN-6

Source: DGA 2009


Page 7-1
7 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional geology
The extensive evaporite deposits of the Altiplano-Puna area of the Central Andes are of
Neogene origin. These deposits have formed over many years (10
4
10
5
yr). Their
formation is closely linked with the morphostructural evolution of the Andean system and
interaction with climatic evolution.

The Altiplano-Puna is the second largest high altitude plateau in the world and is the
focus of numerous brine bodies containing high concentrations of lithium amongst
several other species of economic interest. The Andes of western South America are the
result of subduction processes as the Nazca plate dived beneath the South American
plate, and volcanic zones are associated with the steeply dipping portions of the
subduction zone. The central volcanic zone, located between 14
0
S and 28
0
S is underlain
by one of the largest magma bodies in existence on earth, known as the Altiplano-Puna
Magma Body (APMB) (de Silva et al, 2006). Whilst the origin of the high lithium
concentrations in the brines of the Altiplano-Puna is not known, their distribution around
the margins of the APMB is suggestive of an ultimate source.

In the central Andes and Altiplano-Puna plateau, salt pans, known locally as salares
form in topographic depressions with no outlets (endorheic basins). Salars occur at all
elevations from 1000 m to more than 4000 m above sea level. They generally represent
the end product of a basin infill process that starts with the erosion of the surrounding
relief, initially depositing colluvial talus and fan gravels, grading upwards into sheet
sands, and playa silts and clays as the basin fills. There are many variants to this model
and the tectonic and sedimentary processes that lead to the formation of such basins
have been widely addressed in the literature both generally (Hardie et al, 1978; Reading,
1996; Warren, 1999; Einsele, 2000), and specifically with regard to the Altiplano-Puna
(Ericksen and Salas, 1989; Alonso et al, 1991; Chong et al, 1999; Bobst et al, 2001;
Risacher et al, 2003; Vinante and Alonso, 2006).

Structure plays a significant part in the compartmentalization of the Andean basins.
North-south aligned thrust faults, grabens and half grabens frequently create
accommodation space, whilst transverse strike-slip faulting may assist with basin


Page 7-2
closure, offsetting basins against impermeable bedrock (Salfity, 1985; Marrett et al,
1994; Reijs and McClay, 2003). In the Andes, volcanism also plays a significant role,
both in basin infill (e.g. tuffs and ignimbrites), and in basin closure (e.g. volcanoes and
lava flows). The latitude of the central Andes and their position under the subtropical
high pressure belt for at least the last 55 million years (Hartley et al, 2005) has
influenced both the type of sedimentary infill, and its architecture within the basins. Basin
closure is thought to have occurred frequently around 14 Ma (Vandevoort et al, 1995),
although the majority of evaporitic deposits appear to be less than 8 Ma (Alonso et al,
1991).

Recent evidence suggests that the Andes reached their current elevation around 6 Ma
ago (Ghosh et al, 2006), and since that time the climate has been dominated by arid to
semi-arid conditions (Hartley and Chong, 2001) allowing ample opportunity for
evaporation of the influent water. There have also been excursions into wet periods
(Fritz et al, 2004: Placzek et al, 2006; Rech et al, 2010). During the course of the aquifer
formation, influent ground and surface waters have not always had the opportunity to
escape from the basin, often leading to the formation of temporary lakes or wetlands.
Since the influent waters contained dissolved solutes as well as sediment load,
evaporation results in the precipitation of salts, leading to the deposition of a wide range
of evaporite deposits. Depending on the paleohydrological history of the basin, the
deposition of evaporites may have taken place on more than one occasion, generating
repeat sequences. There is a typical precipitation sequence starting with carbonate
(typically calcite) as the first mineral precipitated, through sulphate (typically gypsum), to
chloride (halite). Of course, natural salars rarely conform to this ideal. Asymmetry,
gradational, and changing boundary positions due to climate change, tectonism, and
sediment supply are normal.

The Maricunga basin comprises a large drainage basin approximating 2,200 km2. The
Maricunga basin is located west of the western cordillera, in a topographical intermediate
step, consisting of a closed system that hosts the large Salares Preandinos of Atacama,
Punta Negra and Pedernales, with the Maricunga salar occupying the southernmost
position in the system.

Within the regional framework, the Maricunga basin is limited to the west by mountains
that have been raised by inverse faults (Falla Vegas la Junta, Falla Varillar, Falla


Page 7-3
Indaqua, amongst others) that expose a basement sequence ranging in age from Upper
Paleozoic to Lower Tertiary. The mountains and volcanoes exhibit a diverse range of
preservation and elevation from 4,463 m (Cerro los Corrolos) to 4,729 m (Cerro La
Coipa) to 6,052 m (Cerro Copiapo). To the southeast, the basin limit coincides with the
Chilean-Argentine frontier, which is defined by a line of modern volcanoes with
elevations ranging from 5,250 m (Cerro de Los Patos) and 6,749 m (Nevada Tres
Cruces).

The volcanic complexes (extinct volcanoes, domes, etc.) exhibit a range of ages
between 26 and 6 Ma. Some of them are associated with the characteristically auriferous
mineralisation of the Maricunga Belt. The eastern limit of the basin is marked by the
Cordillero Claudio Gay, with a maximum elevation of 5,181 m (Cerro Colorado). This is a
North-South trending mountain chain resting on a basement of Middle to Upper
Paleozoic rocks and exposing deformed volcanoclastic sequences of Upper Oligocene
to Lower Miocene rocks which represent remnants of the volcanic arc preserved on the
margins of the Maricunga Basin (Figure 7.1).

The valley of the Rio Lamas cuts this mountain range and exhibits deformed
syndepositional and interstratified conglomerates and sandstones with ignimbrites,
indicating an age range of 15.9 1.1 to 15.4 0.7 Ma (Tassara, 1997). This fact
indicates a Middle Miocene age for the mountain range and, therefore, for the restoration
of the endorheic conditions of the Maricunga basin.


Page 7-4
Figure 7.1: Regional geology of Maricunga basin

Source: Vila and Sillitoe, 1991 in Gamonal, 2007

Deformed terraces and sub-horizontal gravels, ranging in age from 12 Ma to 4 Ma based
on the observed stratigraphic relations in the environs of the Salar, are deposited on this


Page 7-5
sequence and they extend towards the west to form the alluvial plain that underlies the
units of the Salar. This is cut, in part by the modern fluvial channels.

7.2 Local geology
The Salar de Maricunga itself is located in the northern sector of the Maricunga basin. It
has an ellipsoidal, shape with the major axis approximately 23 km long oriented NNE-
SSW and the minor axis about 10 km long and covers a total area of approximately 140
km. square. The Salar proper is surrounded on the northwest, north, northeast, east and
south by Quaternary and Miocene-Cenozoic alluvial deposits and on the west and
southwest by volcanic rocks of Upper Miocene age (Figure 7.2).

The asymmetric structure of the Salar is evidence of faulting and tilting of the basin
downward to the northwest, with movement along faults trending north to northeast
during Quaternary time. There is a presumed fault extending northeastward across the
basin of the Salar, as indicated by the pronounced elongation of the southern part of the
Salar and the straight southeastern edge.

The clastic sediments bordering the Salar on the north, northwest and west sides are
composed of fluvial Quaternary sands and gravels of mixed size and composition. They
are generally stratified, with the finer sands being more so. The deposits range in
thickness up to approximately 20 m and exhibit significant transmissivity (10 10
4

m
2
/day and total porosities of 10% to 15% (Risacher et al, 1999).

The older Pliocene-Miocene sediments are alluvial in origin. They exhibit widely varying
sizes from approximately 0.5 mm to up to 10 cm in diameter. The primary sources of
origin of these sediments are the discharges from the Rio Lamas and the quebradas
Cienga Redonda, La Coipa, Mantaniales and Caballo Muerto. These sediments exhibit
transmissivities ranging from 15,000 to 43,000 m
2
/d on the southwest side of the Salar,
based on drill hole test results and from 500 to 3,000 m
2
/d on the northwest side of the
Salar, again based on drill hole test results (Risacher et al, 1999).

The alluvial Upper Miocene and Pliocene sediments exhibit poor stratification on a
selective basis. They are composed of sub-rounded to sub-angular heteroconglomerates
from 1 3 cm up to 20 cm in diameter. Depositional trails largely follow the primary


Page 7-6
drainage channels. They are largely derived from the Upper Miocene lavas and are
primarily distributed on the western flanks of the Cordillero Clauido Gay. The thickness
of these sediments can be up to 900 m.
Figure 7.2: Geomorphology of the Maricunga basin

Source: DGA 2009


Page 7-7
Transmissivity of the sediments ranges from 4,000 to 27,000 m
2
/day, but can be as low
as 800 m
2
/day, based on results from test wells on the west and northwest side of the
Salar. Total porosity ranges are reported as 5% to 15% (Risacher et al, 1999).

The Salar de Maricunga exhibits two main evapofacies, comprising an asymmetric
zoning, which are (Tassara, 1997):

Chloride facies. This facie is primarily distributed in the North and Northwest
sectors of the Salar and presents three types of main textures: sheets, crust flat
and very pure halite blocks. This facies covers approximately 75% of the surface
of the Salar. This facies presents a well-developed compositional homogeneity
between the three types of units, with very high contents of Cl and Na, compared
with other cations and anions and relatively low content (as to Cl and Na) of B
and Li. The chloride facies is up to 50 m thick. The estimated net evaporation
rate from the Salar is reported to be 1,100 l/sec.

Boric and Sulphate facies. This facie is distributed in the southeast of the Salar,
and represents the less soluble facies. It sits between 1 and 2 meters above the
level of the brackish lagoons and the chlorides facies. The flat borate facies units
are less exposed to seasonal influx of water compared to the chlorides facies,
with a much greater dispersion for all elements and a noticeable trend towards
greater quantities of Ca, K, Mg, and SO4, with decreased levels of Cl and Na,
and high concentrations of B and As, while the Li is maintained in the same
proportions as the chlorides of northern salar facies. This facie presents
gypsiferous borates and thenardite with ulexite including mound crust textures.

Both areas are separated by a NE trending fault which controls the phreatic level, with
brackish lagoons facing in the SW-NE direction. This fault belongs to the Eastern
Domeyko fault system, which is an extension of an ancient fault trace structure. The
current unbalanced distribution of the facies in the Salar is probably tectonically
controlled by tilting the basin towards the WNW, following the old NE structures.

The necessary conditions for the generation of evaporite consolidation apparently took
place in the late Miocene (12-11 Ma), being restricted to the age of the substrate of the
salt, and therefore the maximum age of the saline deposits is in the range of 12 Ma to 4


Page 7-8
Ma. The boric (and sulphate facies) of the Salar were deposited simultaneously with
volcanic activity in the upper Miocene Maricunga Strip. Therefore, they would represent
an earlier depositional cycle unlike the currently produced halite deposits in the
Northwest sector of the Salar where the evaporation process results in the reduction of
relic crusts.

The boric facies deposits are associated with a hydrothermal sequence, probably linked
to the Copiap volcanic complex between 11 Ma and 7 Ma, which is correlated
chronologically with the similar sequence that characterized the deposition of evaporitic
borates in the Puna in Argentina.

7.3 Salar de Maricunga water balance
A modified water balance for Salar de Maricunga has been prepared by the DGA (2009).
Figure 7.3 shows the general surface and groundwater flow patterns in the Salar de
Maricunga watershed. Surface water flow generally only occurs at higher ground and
infiltrates into the more permeable alluvial and fan sediment surrounding the Salar
before reaching the Salar floor itself. The only surface water flow that does occur on the
Salar floor is the natural discharge from Laguna Santa Rosa north towards the center of
the Salar. There is no surface water outflow from the Maricunga watershed.

Groundwater flow patterns follow closely the surface water flow patterns. There are no
known groundwater outflows from the Maricunga watershed. Inflow into the Maricunga
watershed from the Laguna Negro Francisco has been demonstrated and is estimated at
80 l/s. It is speculated that potential groundwater inflow to the Maricunga watershed
may take place from the Piedra Pomez Basin through the Claudio Gay mountain range.
There exists uncertainty about potential groundwater interconnection between the Llano
de Piedra Pomez and the Rio Lamas basin. Both potential groundwater inflow
components need further investigation to refine the current water balance of the Salar de
Maricunga hydrographic basin.

The majority of recharge to the Maricunga basin occurs through the direct infiltration of
precipitation. The total average annual recharge to the Maricunga basin (including the
inflow from Laguna del Negro Francisco) is estimated at 1,450 l/s or 45.7 million cubic
meters.


Page 7-9
Discharge from the Maricunga basin is through evaporation, evapotranspiration and
groundwater pumping. Evaporation rates for the various soil types have been described
previously in Section 5.2. The total average annual discharge through evaporation has
been estimated at 1,098 l/s or 34.6 million cubic meters.

According to DGA records, existing granted water rights in the Salar de Maricunga basin
amount to 548 l/s. Table 7.1 summarizes the water balance for the Salar de Maricunga
watershed.
Table 7.1: Water balance for the Salar de Maricunga basin
Inflows Average flow (l/s)
Recharge from precipitation 1,370
Inflow from Laguna del Negro Francisco 80
Other groundwater inflow NA
Total inflows 1,450
Outflows
Evaporation 1,098
Licensed abstraction 548
Total outflows 1,646
Balance (Inflows Outflows) -196
Difference -13.5%
Source: DGA 2009

Golder (2010) has prepared a modified water balance for the Salar de Maricunga basin
as part of the Marte Lobo EIA. This modified water balance is currently under review by
the Chilean authorities and, if approved, would supersede the DGA 2009 water balance
summarized in Table 7.1.


Page 7-10
Figure 7.3: General surface and groundwater flow patterns in the Salar de Maricunga
basin

Source: DGA 2009


Page 7-11

7.4 Mineralization
The brines from Maricunga are solutions saturated in sodium chloride with total
dissolved solids (TDS) of 26% (316 g/L) as an average, although in most areas exceed
27%. The average density is 1.200 g/cm
3
. The other components present in these
brines, which constitute an aqueous complex system and exist also in other natural
brines in Argentina, Bolivia and Chile are the following: K, Li, Mg, CA, SO
4,
HCO
3
and B,
which below pH 7 exists predominantly as un-dissociated H
3
BO
3
strontium (mean of 290 mg/L) also have been detected by ICP in the Maricunga brine.

Table 7.2 shows the average content of chemical species, as well as max and min
values, based on 431 brine samples collected from the drilling program and analyzed at
the University of Antofagasta:

Table 7.2: Average, max and min assays (g/l) and density (g/cm
3
) results
Average assay values in g/l
Na K Li Mg Ca SO
4
Cl B HCO
3
Density
85.7 8.97 1.25 8.28 12.42 0.72 192.7 0.61 0.64 1.200
Maximum
104.2 14.67 2.05 15.10 31.60 2.96 211.5 1.04 2.39
Minimum
37.8 3.85 0.46 2.76 4.00 0.30 89.4 0.33 0.14

In order to evaluate the brine quality it is necessary to know the relationship among the
elements of commercial interest, such as lithium and potassium, with those components
that in some respect constitute impurities, such as Mg, Ca and SO
4
. The calculated
ratios for the averaged chemical composition are presented in Table 7.3:

Table 7.3: Average values (g/L) of key components and ratios for Maricunga brine
K Li Mg Ca SO
4
B Mg/Li K/Li (SO
4
+2B)/(Ca+Mg)
*
8.97 1.25 8.28 12.42 0.72 0.61 6.63 7.18 0.184
*SO
4
+2B/ (Ca+Mg) is a molar ratio


Page 7-12
As indicated in Table 7.2, the brines from Maricunga have an Mg/Li ratio (6.6) very
similar to the Atacama brine (6.4). However, Maricunga has a low sulfate content, which
is illustrated by the very low molar ratio (SO
4
+2B)/(Mg+Ca) that is also influenced by a
relatively high calcium content. This is an advantage as it will reduce lithium losses as
lithium sulfate salts in the ponds when conventional solar evaporation process is used to
recover the lithium. Treatment of the brine to remove the calcium would make the
process similar to that utilized by SQM and SCL at Salar de Atacama.

As in other natural brines in the region, such as those of the Salar de Atacama and Salar
del Hombre Muerto, which have been under exploitation for many years, the higher
content of ions Cl
, SO
4
=
, K
+
, Mg
++
, Na
+
at Maricunga, despite the relatively high
presence of Ca, which can be removed (see discussion of processing in Chapter 13),
allows a simplification for the study of crystallization of salts during an evaporation
process. The known phase diagram (Janecke projection) of the aqueous quinary system
(Na
+
, K
+
, Mg
++
, SO
4
=
, Cl
) at 25C and saturated in sodium chloride (equilibrium data in

the technical literature) can be used. However, in order to fit this phase diagram with the
important presence of lithium in the brines, the Janecke projection of MgLi
2
-SO
4
-K
2
in
mol % is used. The Maricunga brine composition has been represented in this diagram
(field of KCl), shown in Figure 7.3, in comparison with those of other salars, either under
exploitation or in advanced project development.

Table 7.4 also shows the average content of chemical species at Maricunga compared
with those of Silver Peak, Salar de Atacama, Salar del Hombre Muerto, Salar de
Cauchari, Salar de Rincon and Salar de Uyuni, as well as the calculated ratio between
some elements.


Page 7-13
Figure 7.4: Comparison of brines from various salars in Janecke Projection

Table 7.4: Comparative chemical composition of natural brines (weight %).

Salar de
Maricunga
(Chile)
Silver
Peak
(USA)
Salar de
Atacama
(Chile)
Hombre
Muerto
(Argentina)
Salar de
Cauchari
(Argentina)
Salar del
Rincon
(Argentina)
Salar de
Uyuni
(Bolivia)
Na 7.14 6.20 7.60 9.79 9.55 9.46 8.75
K 0.748 0.53 1.85 0.617 0.47 0.656 0.72
Li 0.104 0.023 0.150 0.062 0.052 0.033 0.035
Mg 0.69 0.03 0.96 0.085 0.131 0.303 0.65
Ca 1.035 0.02 0.031 0.053 0.034 0.059 0.046
SO4 0.06 0.71 1.65 0.853 1.62 1.015 0.85
Cl 16.06 10.06 16.04 15.80 14.86 16.06 15.69
HCO3 0.053 n.a. Traces 0.045 0.058 0.030 0.040
B 0.051 0.008 0.064 0.035 0.076 0.040 0.020
Density 1.200 n.a. 1.223 1.205 1.216 1.220 1.211
Mg/Li 6.63 1.43 6.40 1.37 2.52 9.29 18.6
K/Li 7.19 23.04 12.33 9.95 9.04 20.12 20.57
SO4/Li 0.577 30.87 11.0 13.76 31.06 31.13 24.28
SO4/Mg 0.087 23.67 1.72 10.04 12.33 3.35 1.308
Ca/Li 9.95 0.87 0.21 0.86 0.65 1.79 1.314
References: Published data and information from the authors


Page 8-1
8 DEPOSIT TYPES
There are two major types of salars: mature halite salars and immature clastic salars.
The Salar de Maricunga is classified as a mixed type salar of the Na-Cl-Ca/SO4 system.

Immature salars tend to be relatively small, and are more frequent at higher elevations
and towards the wetter northern part of the region. They are characterized by an
alternating sequence of relatively fine-grained sediments with evaporitic beds of halite or
ulexite nodules, representing the waxing and waning of sediment supply under a
variable tectonic and climatic history. The contained brines barely reach halite saturation,
although normally fully saturated with respect to gypsum, leading to the widespread
occurrence of selenite throughout the sequence. The presence of intercalated or
underlying beds of higher permeability sometimes allows the transmission of fresher
waters from outside the salar margins through to the centre where there is a tendency
for the density differential with the nucleus brines to allow upward flow providing that the
confining bed has sufficient permeability to allow such leakage.

Mature salars tend to be larger and more common in the lower and drier parts of the
region. They are characterized by a relatively uniform, and thick sequence of halite
deposited under varying subaqueous to sub-aerial conditions (Bobst et al, 2001).
Nevertheless, ancient floods leading to widespread silty-clay deposits and volcanic
fallout lead to relatively thin intercalated beds that can be recognized both in cores and
geophysical logs. Such layers of varying permeability may lead to the transmission of
fresher water from outside the salar margins to the edge of the nucleus where, once
unconfined, float to the surface, dissolving halite in their ascent and leading to pipes and
salt dolines at the surface. The contained brines are invariably halite saturated
throughout the brine body, although the presence of multiple brine types, especially in
the larger salars attests to the hydrochemical variation of the contributing sub-basins.


Page 9-1
9 EXPLORATION
9.1 Overview

Exploration work conducted on the property in 2011 consisted of the following:

23 line km of seismic tomography survey to define basin lithology/stratigraphy
and basin geometry;
Six test trenches to 3 m depth to conduct 24-hour shallow pumping tests
9.2 Seismic refraction tomography survey

Li3 contracted Geophysical Exploration and Consulting S.A. (GEC) from Mendoza
Argentina to carry out a Seismic Refraction Tomography Survey to map geologic
stratigraphy and structure relative to the occurrence of brine and to provide any
additional information or interpretations regarding subsurface geological conditions.

A total of 23.2 line km of seismic tomography data were collected along six lines as
shown in Figure 9.1. Prior to the seismic data collection all lines were surveyed using a
differential GPS system. All data collection work was completed in the field between
September and December 2011.


Page 9-2
Figure 9.1: Seismic refraction survey plan

9.2 Seismic tomography data acquisition and processing parameters

A 24-bit, ultra-high resolution 20 kHz bandwidth (8 to 0.02 ms sampling), low distortion
(0.0005%), low noise (0.2uV) GEODE Acquisition System was used for the collection of
the seismic tomography data. Geophone (14Hz Geospace) spacing was 5 m; inline
source spacing was 15 m and outline offsets were 30 m, 60 m, 90 m, 150 m, 250 m and
500 m. The spread data acquisition layout included 48 active channels. The seismic
source for the surveys was a 150 kg trailer-mounted accelerated drop-weight.
Recording length was 250/500 ms with a 1.0 ms sampling rate.

During the seismic data acquisition data quality control and pre-processing of the
geophysical data were carried out in the field with PC based processing and
interpretation packages called Firstpix / Gremix 15 and Rayfract32. Final data
processing with the Rayfract 32 software included tomography inversion techniques
Delta TV and WET or Wave Eikonal Traveltime as follows:


Page 9-3

Delta T-V method (after Gebrande and Mille, 1985): The Delta TV method is
a pseudo 2D Inversion method that delivers a continuous 1D velocity versus
depth model for all geophone stations. The method handles geological
situations such as velocity gradients, linear increasing of velocity with depth,
velocity inversions, pinching out layers and outcrops, faults and local velocity
anomalies.

WET or Wave Eikonal Traveltime Tomography processing. Wave
propagation is modelled in a physically meaningful way with ray paths, using
the output from the Delta-TV inversion as starting model. It handles
geological situations, such as discontinuities velocity distributions and sharp
vertical or horizontal velocity gradients. Quality control of geological models
is performed by direct graphical comparison of the measured travel time data
to those calculated from the model solution.

9.3 Results of the seismic tomography survey

Figure 9.1 through 9.6 show the results of the seismic tomography survey. The results
are summarized below:

Line1: Halite crust gradually increasing in thickness from North to South, reaching
maximum depth of approximately 40m. Clayey halite sequence below
halite crust, decreasing to South
Sediment sequence below clayey halite
Probable fault structure at 1250 m
Deep lying halite sequence at 110 m depth from.1300 m extending to 2300
m, thins out and stops at 2650 m
Increase in thickness of halite/clayey halite sequence to approx. 40 m
moving to South
Probable fault structure at 3350 m

Line 2: Clayey halite to 40 m depth from 0 to 350 m, clay sediment sequence
below,
425 m to 950 m as above; halite sequence at 100 m depth from 600 m to
950 m


Page 9-4
1150 m to 1400 m: clayey halite to 30 m depth, clay sediment package
below

Line 3: 0 m to 350 m: clayey halite sequence to 40 m depth, clayey sediment
package below to 110 m depth, conglomerate/gravels and possible breccia
below
375 m to 700 m: halite dome underlying conglomerate/gravel package,
probable fault at approx. 540 m
700 m to 1500 m: clayey halite sequence ranging from 20 m to 40 m depth,
clayey sediment package with underlying conglomerate/gravels/possible
breccia below,
halite lens at 1350 m to 1450 m
1550 m to 2850 m: clayey halite sequence to 60 m depth, clayey sediment
package with lenses of conglomerates/gravels and underlying
conglomerates/gravels, probable fault at 2800 m
2900 m to 3100 m: possible halite lens at 3000 m to 3100 m from 40 m to
60 m depth

Line 4: 0 m to 5600 m: halite crust and clayey halite sequence to approx. 70 m
max. depth; interspersed by conglomerate/gravel package and clayey
sediment package with underlying breccia; sand layer 10 m to 30 m thick
underlying conglomerate/gravel package with deeper lying halite lenses
probable faults at 250 m, 1300 m and 4555 m

Line 5: 0 m 3800 m: halite crust and clayey halite sequence to approx. 20 m
max. depth, underlying clayey sediment package with some intervening
conglomerate/gravel sequences from 80 m depth
Probable faults at 2050 m and 2870 m

Line 6: 0 m 450 m: clayey sediments overlying halite sequence at 80 m depth,
1000 m 3000 m: clayey halite/clayey sediment/conglomerates/gravels
and breccia lenses overlying halite at approx. 160 m depth. Halite thins out
at 2850 m,
3500 m to 4200 m: halite lens at approx. 160 m depth
Probable faults at 540 m, 2850 m and 5200 m


Page 9-5

Figure 9.2: Seismic tomography Line S1


Page 9-6




Page 9-7



Page 9-8



Page 9-9



Page 9-10

9.4 Test trenching

Six test trenches (T1 through T6) were installed to test the feasibility of brine production
from trenches as an alternative to brine production from production wells. One trench
was installed adjacent to each sonic borehole. The trenches were dug at 3 m width to a
depth of 2.5 m. Each trench was completed in generally massive (relatively competent)
halite and the trench walls did not encounter stability problems (Figure 9.8).

A 24-hour pumping test was carried out in each trench at a flow rate of 5 l/s using a
sump pump. Water level responses during each pumping test were observed in a
shallow monitoring well (36 m depth) adjacent to each trench and allowed the calculation
of aquifer parameters. Figures 9.8a through 9.8e show the water level response in each
observation well and the associated pumping test analyses. Table 9.1 summarizes the
results of the pumping test analyses. The relatively high S
y
values obtained from the
pumping tests are likely indicative of enhanced secondary porosity in the halite.

Values of hydraulic conductivity for the Maricunga brine aquifer were determined from
the pumping tests carried out on the test trenches T1 through T6 as shown in Table 9.1.
These calculated hydraulic conductivities are relatively high and are representative of the
halite mix sediments and suggest enhanced permeability in the halite through
dissolutions and fractures features.


Page 9-11

Figure 9.8: Test trench T6 in the upper halite zone

Table 9.1: Results of trench pumping tests
Trench Hydraulic Conductivity (K) m/d Specific Yield (S
y
)
T1 208 0.24
T2 84 0.28
T3 145 0.24
T4 No water level response in piezometer
T5 15 0.12
T6 45 0.04

The preliminary results of these tests indicate that the upper halite is highly permeable
and that brine production from trenches is a feasible alternative to production wells.


Page 9-12
Figures 9.8a 9.8e: Pumping test analyses for trench pumping tests T1, T2, T3, T5
and T6

After Papadopulos 1967
a 0.01
1/u 100
F(u) 1
t 190 min
s 0.0055 m
r 12.9 m
Q 529 m3/d
KD 7513 m2/d
Sy 0.24
. 1
. 1
. 1
1
1 1 1 1 1
D
r
a
w
d
o
w
n

(
m
)
Minutes
Pumping Test T1- Water level response in obs well C1
After Papadopulos1967
a 0.1
1/u 10
F(u) 1
t 350 min
s 0.015 m
r 32.47 m
Q 573 m3/d
KD 3041 m2/d
Sy 0.28
. 1
. 1
. 1
1
1 1 1 1 1
D
r
a
w
d
o
w
n

(
m
)
Minutes
Pumping Test T2: water level response in obs well C2
a 0.1
1/u 10
F(u) 1
t 35 min
s 0.009 m
r 14.6 m
Q 593 m3/d
KD 5237 m2/d
Sy 0.24
. 1
. 1
. 1
1
1 1 1 1 1
D
r
a
w
d
o
w
n

(
m
)
Minutes
Pumping Test T3: water level response obs well C3


Page 9-13

a 0.01
1/u 100
F(u) 1
t 300 min
s 0.085 m
r 6 m
Q 562 m3/d
KD 526 m2/d
Sy 0.12
. 1
. 1
. 1
1
1 1 1 1 1
D
r
a
w
d
o
w
n

(
m
)
Minutes
Pumping test T5: waterlevel response obs well C5
a 0.01
1/u 100
F(u) 1
t 410 min
s 0.025 m
r 22.6 m
Q 518 m3/d
KD 1650 m2/d
Sy 0.04
. 1
. 1
. 1
1
1 1 1 1 1
D
r
a
w
d
o
w
n

(
m
)
Minutes
Pumping Test T6: water level response obs well C6


Page 10-1
10 DRILLING
10.1 Objectives
The objectives of the Li3 2011 drilling campaign were two-fold:

1) Carry out drilling on a specified grid to allow the estimation of measured in-situ
brine resources over the Li3 mineral claims in Salar de Maricunga. The drilling
methods were selected to allow for 1) the collection of continuous core to prepare
undisturbed samples at specified depth intervals for laboratory porosity
analyses and 2) the collection of depth-representative brine samples at specified
depth intervals without the possibility of contamination by drilling fluids.

2) Carry out exploration- and well drilling to allow the installation of two test
production wells and adjacent piezometers to carry out long-term pumping trails.

10.2 Sonic drilling
Boart Longyear (BLY) was contracted to carry out a sonic drilling program for the
collection of continuous core and brine samples. Six sonic boreholes (C1 though C6)
were located on a grid as shown in Figure 10.1 and detailed in Table 10.1. This well
distribution resulted in a well density equal to one well per 2.4 km
2
across the Li3 mineral
claim block and is suitable according to general acceptable standards to define
measured in-situ brine resources. Core recovery was consistently high and exceeded
99%.

The drilling equipment consisted of a BLY 300C ATV Sonic rig and support equipment
utilizing a 4-inch diameter coring by 6-inch casing system. Each sonic hole was drilled
without the use of any drilling additives/fluids to a total depth (TD) of 150 m. The drilling
was carried out in 1.5 m runs and core was collected in alternating plastic bags (1.5m)
and lexan core barrel liners (1.5 m). The retrieved lexan core liners were capped and
sealed with tape at each end. All retrieved core was labeled with its borehole number
and the drilling depth interval and stored in wooden core boxes. The 6-inch diameter
casing was advanced at the end of each run. At the end of each lexan core run (each 3
m interval) a brine level measurement was made inside the drill casing to calculate the
required volume to be bailed from the hole prior to obtaining a brine sample. At least


Page 10-2
one-well volume was bailed prior to collecting the final brine sample from the bottom of
the hole. This procedure was repeated to total depth (TD). Figure 10.2 illustrates the
sonic drilling operation.

On completion of drilling, each sonic borehole was completed as a monitoring well with
2-inch diameter PVC blank and slotted casing, gravel pack and cement seal to a depth
of 36 m.

Appendix 1 shows the compound logs for the sonic boreholes.

Figure 10.1: Location map of the Sonic bores (C1-C6) and RC holes (P1-P3)


Page 10-3
Table 10.1: Sonic borehole locations (PSAD 1956 Zone 19J datum)
Hole Number Easting Northing Depth
(m)
C1 495250 7027150 150
C2 493250 7026250 150
C3 495250 7025250 150
C4 493250 7024750 150
C5 495250 7023250 150
C6 493250 7023250 150
Total 900

Figure 10.2: Sonic drilling operation

Bailing of brine


Page 10-4
10.3 Reverse Circulation (RC) drilling

Overview
Rock Drilling S.A. was contracted by Li3 to complete a reverse circulation (RC) drilling
program consisting of:

Exploration drilling to identify suitable locations for the completion of two test
production wells,

Drilling and completing four piezometers adjacent to each production well, and

Drilling and completing two productions wells.

The RC drilling was carried out using an Ingersoll Rand T3-W reverse circulation rig
equipped with a 350 psi, 1000 cfm air compressor and support equipment.

Exploration drilling and piezometer installations
samples for geologic logging, brine samples for chemistry analyses and airlift data. The
exploration drilling was carried out at 5 -inch diameter using dual tube reverse
circulation pipe and air; no additives/fluids were used during the drilling. Exploration
drilling depths ranged from 30 m to 192 m. Chip samples were collected at 2 m intervals
for geological logging, brine samples were collected at 3 m intervals (directly from the
cyclone) and airlift tests were completed at 6 m intervals. The RC exploration boreholes
were completed as piezometers for use during the future pumping tests. The distance
between the piezometers and the associated production well ranges from 10 m to 35 m.
Table 10.2 shows the details of the RC exploration drilling completed. The geological
logs for holes P1 through P3 are provided in Appendix 1.

Production well drilling
Drilling of test production wells P1 and P2 was carried in two passes at 11-inch and 17-
inch diameter to a final total depth of 150 m using flooded reverse circulation. The wells
were completed with a 10-inch diameter PVC production casing string as detailed in
Table 10.2. The annulus of each test well was completed with gravel pack. Well
development was carried out over a 72 hour period in each well using a double
swab/airlift system.


Page 10-5
Table 10.2: Summary of RC drilling program
Hole
1

Easting
PSAD 56
Zone 19J
Northing
PSAD
56 Zone
19J
Depth
(m)
Final drilling
diameter (in)
Final
completion
diameter (in)
Screened
Interval (m)
Platform P1
P1-1 150 5.5 2 59-150 m
P1-2 30 5.5 2 6-24 m
P1-3 70 5.5 2 54-66 m
P1-4 30 5.5 2 6-24 m
P1 494250 702650 150 17 10 6-24; 60-144
Platform P2
P2-1 113 5.5 2 102-108
P2-3 30 5.5 2 12-30
P2-4 150 5.5 2 60-145
P2-5 150 5.5 2 60-145
P2 494250 7023750 150 17 10 6-24; 60-144
Platform P3
P3-1 494250 7026098 192 5.5 2 127-185
1) All holes are vertical and at an elevation of 3758 masl.

Hydraulic testing
On completion of the well development five-hour airlift tests were carried out to obtain
some initial information on well and aquifer parameters. Specific capacity (S
C
) for well
P1 at a pumping rate of 4.7 l/s was calculated to be 52 l/s/m and the S
C
for well P2 at a
pumping rate of 4.8 l/s was calculated to be 121 l/s/m. Based on water level recovery
data of these airlift tests values for hydraulic conductivity were calculated to be 41 m/d
and 40 m/d for P1 and P2, respectively. Figures 10.5a and 10.5b show the analyses of
the airlift recovery tests.

It is planned that long-term pumping test will be carried out on production wells P1 and
P2 during 2012 to further define aquifer conditions and pumped brine quality.


Page 10-6
Figure 10.3: Collecting RC Airlift Flow Measurements

Figure 10.4: Installation of temporary casing during the RC flooded production well
drilling

Figures 10.5a and 10.5b: Analyses of P1 and P2 airlift recovery tests


Page 10-7

Theis 1935:
Q 407 m3/d
dS 0.075 m
b 24 m
T 993.10 m2/d
K 41.38 m/d
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.10
1.00 10.00 100.00 1000.00
R
e
s
i
d
u
a
l

d
r
a
w
d
o
w
n

(
m
)
t/t' (minutes)
P1-Airlift recovery test
Theis 1935
Q 418 m3/d
dS 0.08 m
b 24 m
T 956.20 m2/d
K 39.84 m/d
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.10
1 10 100 1000
R
e
s
i
d
u
a
l

d
r
a
w
d
o
w
n

(
m
)
t/t' (minutes)
P2-Airlift recovery test


Page 11-1
11 SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1 Sampling methods

Sampling and sample preparation protocols for the Sonic Drilling and RC Drilling
Programs were developed by Don Hains, P.Geo, Frits Reidel, CPG, and Pedro Pavlovic,
Chem Eng. All protocols were implemented at the start-up of the drilling programs in
October 2011 under the supervision of Frits Reidel, CPG and included extensive day to
day training and supervision of Li3 field staff and experienced MWH hydrogeologists and
field technicians. Frits Reidel, CPG was present throughout the drilling program on
regular intervals to review the day to day execution of these protocols.

11.1.1 Sonic drilling sampling procedures

Porosity samples
Sonic core was collected in 1.5 m lexan core liners in alternating 1.5 m intervals as
described in Section 10 above. A 10cm sub-sample was cut from the lexan core liner;
caps were placed on each end of the porosity sub-sample and taped to prevent any fluid
loss. The samples were labelled with the borehole number and depth interval. Each day
the porosity samples were transferred to the workshop in the on-site camp where the
samples were labelled with a unique sample number. Prior to shipping each sample was
wrapped in bubble plastic to prevent disturbance during shipping. A total of 285 porosity
where shipped to DBS&A Laboratory in the USA and 32 porosity check samples were
shipped to the BGS in the UK.

Brine samples
Brine samples were collected at three-meter intervals during the sonic drilling where
possible. In some cases where the formation permeability was low, it was not possible
to collect a brine sample after a one hour waiting period. The borehole was purged by
bailing at least one well volume of brine from the drill casing as calculated from the water
level measurement prior to collecting the final brine sample from the bottom of the hole.
The final brine sample was discharged from the bailer into a 20 liter clean bucket from
which three one-liter sample bottles were rinsed and filled with brine. Each bottle was
taped and marked with the borehole number and depth interval. A small sub-sample


Page 11-2
from the bucket was used to measure field parameters (density, electric conductivity, pH
and temperature) at the wellhead (Figure 11.1).

Figure 11.1: Collection of field parameters of the brine samples at the wellhead

The samples were moved from the drill site to secure storage at the camp on a daily
basis. All brine sample bottles are marked with a unique label. One sample bottle is
stored as a permanent back-up sample in the on-site warehouse. One sample bottle is
prepared for shipment and the third bottle is either used as a duplicate or discarded. No
filtration was carried out on the brine samples prior to shipment to laboratories. Figure
11.2 illustrates the porosity samples and brine samples.


Page 11-3
Figure 11.2: Porosity samples and brine samples

11.1.2 RC drilling sampling procedures

RC drill cuttings

During RC drilling, rock chip and brine were collected directly from the cyclone. Drill
cuttings were collected over two meter intervals in plastic bags that were marked with
the borehole number and depth interval. Sub-samples were collected from the plastic
bag by the site geologist to fill chip trays (also at two meter interval). At the end of each
borehole all chip trays were removed to storage in the on-site office (Figure 11.3). All
plastic sample bags were stored in a secure on-site warehouse.


Page 11-4

Figure 11.3: RC Drill Chip Samples

RC brine sampling
Brine samples were collected at three-meter intervals during the RC drilling where
possible. In some cases where the formation permeability was low, it was not possible
to collect a brine sample. Brine samples were collected in three one-liter (rinsed) sample
bottles. Each bottle was taped and marked with the borehole number and depth interval.
A small sub-sample from the cyclone was used to measure field parameters (density,
electric conductivity, pH and temperature) at the wellhead.
11.2 Sample preparation
Brine samples, either from RC boreholes or Sonic drill holes, most of them containing
some sediment, were collected in sufficient amount in order to generate duplicates and
check samples. They were shipped to the University of Antofagasta (main and duplicate
samples) and Alex Stewart in Mendoza (check samples) for chemical analysis in sealed
1-litre rigid plastic bottles with sample numbers clearly identified. Both laboratories
prepared the samples by filtering the solid material. The University of Antofagasta used
Whatman N2 filter paper (8 m pore size), which was considered sufficient for the size
of sediments.


Page 11-5
11.3 Brine analysis and quality control results

11.3.1 Analytical methods
The University of Antofagasta in northern Chile was selected as the primary laboratory to
conduct the assaying of the brine samples collected as part of the drilling program. They
also analyzed blanks and standards specially prepared by Li3 Energy under the direction
of the authors, which were inserted as blind control samples in the analysis chain. In
total, there were 553 samples, of which 431 were main samples.

The laboratory of the University of Antofagasta is not ISO certified, but it is specialized in
the chemical analysis of brines and inorganic salts, with extensive experience in this field
since the 1980s, when the main development studies of the Salar de Atacama were
begun. In the opinion of the authors, the quality control and analytical procedures used
at the University of Antofagasta laboratory are of high quality and comparable to those
employed by ISO certified laboratories specializing in analysis of brines and inorganic
salts.

Seventy external duplicates (check samples), including control samples, were shipped to
Alex Stewart Argentina in Mendoza, Argentina. This laboratory is accredited to ISO 9001
and operates according to Alex Stewart Group standards consistent with ISO 17025
methods at other laboratories.

Table 11.1 lists the basic suite of analyses requested from both laboratories. Both of
them used the same analytical methods based on the Standard Methods for the
Examination of Water and Wastewater, published by American Public Health Association
(APHA) and the American Water Works Association (AWWA), 21
st
edition, 2005,
Washington DC. The University of Antofagasta used Atomic Absorption Spectrometry
(AAS) for the determination of lithium, potassium, magnesium and calcium. Alex Stewart
employed Inductively Coupled Plasma (ICP), which is generally used for a large suite of
elements (multi-elemental analysis), including the detection of trace metals. ASA
included 10 elements in the determination with this analytical technique: B, Ba, Ca, Fe,
K, Li, Mg, Mn, Na and Sr.


Page 11-6
Table 11.1 List of Analyses requested from the University of Antofagasta and Alex
Stewart Argentina SA Laboratories

ANALYSIS
UNIVERSITY OF
ANTOFAGASTA
ALEX STEWART METHOD
Chemical-Physical Parameters
Total Dissolved
Solids
SM 2540-C SM 2540-C
Total Dissolved
Solids Dried at 180C
PH SM 4500-H
+
B SM 4500-H
+
B Electrometric Method
Density CAQ 001DS IMA-28 Pycnometer
Alkalinity SM 2320-B SM 2320-B Acid-Base Titration
Inorganic Parameters
Boron (B) CAQ 005 BS ICP - OES Acid-Base Titration
Chlorides (Cl) SM 4500-Cl
-
B SM 4500-Cl
-
B
Argentometric
Method
Sulfates (SO4)
SM 4500
2-
D (Drying
of Residue)
SM 4500
2-
C (Ignition
of Residue)
Gravimetric Method
Dissolved metals
Sodium (Na) SM 3111 B ICP-OES 10
Direct Aspiration-AA
or ICP Finish
Potassium (K) SM 3111 B ICP-OES 10
or ICP Finish
Lithium (Li) SM 3111 B ICP-OES 10
or ICP Finish
Magnesium (Mg) SM 3111 B ICP-OES 10
or ICP Finish
Calcium (Ca) SM 3111 D ICP-OES 10
or ICP Finish


Page 11-7
11.3.2 Analytical Quality Assurance and Quality Control (QA/QC)
A full QA/QC program for monitoring accuracy, precision and potential contamination of
the entire brine sampling and analytical process was implemented. Accuracy, the
closeness of measurements to the true or accepted value, was monitored by the
insertion of standards, or reference samples, and by check analysis at an independent
(or umpire) laboratory.

Precision of the sampling and analytical program, which is the ability to consistently
reproduce a measurement in similar conditions, was monitored by submitting blind field
duplicates to the primary laboratory. Contamination, the transference of material from
one sample to another, was measured by inserting blank samples into the sample
stream at site. Blanks were barren samples on which the presence of the main elements
undergoing analysis has been confirmed to be below the detection limit.

Approximately 31% of the 623 samples submitted for chemical analysis were quality
control samples. The QA/QC procedures adopted for the Project are discussed below,
and included the following:

Three standards (A, B and C), or reference samples, were inserted at a frequency of
1 in 15 samples (1/3 of each type of standard, randomly inserted). The specially
prepared samples were submitted to five laboratories as a Round Robin (each
analyzing five 1-L sub-samples from each type of standard) to establish an accepted
mean and standard deviations for the analytical variables.
The University of Antofagasta made an internal check on overall analytical accuracy
for the primary constituents of the brine by using ion balance. This calculation was
checked and also the ratio of measured to calculated TDS was added as another
procedure for checking the correctness of analyses.
Duplicate samples at a frequency of 1 in 10 samples in the analysis chain were
submitted to the University of Antofagasta as unique samples (blind duplicates) to
monitor precision;
Stable blank samples (distilled water) were inserted at a frequency of 1 in 30
samples to measure cross contamination;


Page 11-8
Duplicates at a frequency of 1 in 10 samples, and including blind control samples (a
total of 70 samples), were submitted to the secondary laboratory (Alex Stewart in
Mendoza) as check samples (external duplicates).
11.3.3 Analytical accuracy

11.3.3.1 Anion-cation balance
The anion-cation balance was used as a measure of analytical accuracy. The anion and
cation sums, when expressed as equivalents or milliequivalents per liter, must balance in
an ideally perfect analysis, because mixtures of electrolytes are electrically neutral. The
term meq/L is defined as:
Meq/L = (mg/L * valence number / molecular weight of ion)

The charge balance is expressed as a percentage, as follows:
% Difference = ((Cations Anions)/(Cations +Anions)*100,
Although this test does not monitor individual elements, it is recommended by APHA-
AWWA-WPCF in their Standard Methods, 21
st
edition, 2005 (1030 E) as a procedure for
checking correctness of water analyses. The typical criterion for acceptance is a
maximum difference of 5%, which is used by the University of Antofagasta as well as by
Alex Stewart.

The performance of the University of Antofagasta in the analyses of 431 main samples
and 61 duplicates show a balance within 2%, i.e. much less than the maximum
acceptable difference of 5%. All the check samples analyzed by Alex Stewart had a
balance within a value of 5%.

11.3.3.2 Measured versus calculated TDS
Measured versus calculated Total Dissolved Solids (TDS) was used as a second
evaluation test of analytical accuracy. The recommended ratio according to the
APHAA/AWWA/WPCF Standard Method should be between 1.0 and 1.2. Results for the
submitted samples to the University of Antofagasta (431 main samples plus 61
duplicates) ranged from 0.983 to 1.043, with 10% of the samples below the acceptable
ratio (1.0) and most of these between 0.994 and 1.0. This is considered as a very good
performance given the high dissolved solids content of the brine.

Based on the results detailed above, the authors are of the opinion that the sample


Page 11-9
analytical results are reliable and accurate.

11.3.3.3 Certified analytical standards
Three standard reference samples, prepared at site with original brine (Standard A,
100% natural brine; Standard B, 80%; Standard C, 60%, dilution with distilled water)
were used in the sampling program. Sets of randomized replicates were sent in a Round
Robin analysis program to five laboratories (15 sub-samples to each lab) to determine
the certified values used to monitor the accuracy of analyses. Statistics were done on
the Round Robin assay results and the standard reference samples certified for the
elements that met the criteria of having a global Relative Standard Deviation (RSD) of
near 5% or less..

Standard A
The Round Robin results for standard A are shown in Figures 11.4, 11.5 and 11.6 for
lithium, potassium and magnesium, respectively. Standard A was inserted 14 times into
the sample stream to monitor the accuracy of University of Antofagastas analyses. From
the aforementioned figures, it can be seen that there is only a very low bias (one failure
> 2SD) for potassium. Standard failure in bias is defined as two or more standards in a
row having more than two (2) standard deviations from the mean, on the same side of
the mean. Lithium and magnesium analyses are accurate.

Figure 11.4: Lithium results for Standard A (round robin left side) and Standard A
samples (14) inserted in the sample stream (right side).


Page 11-10
Figure 11.5: Potassium results for Standard A (round robin left side) and Standard A

Figure 11.6: Magnesium results for Standard A (round robin left side) and Standard A

Standard B
The Round Robin results for standard B are shown in Figures 11.7, 11.8 and 11.9 for
lithium, potassium and magnesium, respectively. Standard B was also inserted 14 times
into the sample stream to monitor the accuracy of University of Antofagastas analyses.
From the aforementioned figures, it can be seen that there is only a very low bias (one


Page 11-11
failure > 2SD) for magnesium. Lithium and potassium analyses are accurate.

Figure 11.7: Lithium results for Standard B (round robin left side) and Standard B

Figure 11.8: Potassium results for Standard B (round robin left side) and Standard B


Page 11-12
Figure 11.9: Magnesium results for Standard B (round robin left side) and Standard B
samples (14) inserted in the sample stream (right side)

Standard C
The Round Robin results for standard C are shown in Figures 11.10, 11.11 and 11.12 for
lithium, potassium and magnesium, respectively. Standard C was also inserted 14 times
into the sample stream to monitor the accuracy of University of Antofagastas analyses.
From those figures, it can be seen that all the Standard C analyses for lithium, potassium
and magnesium are accurate.

Figure 11.10: Lithium results for Standard C (round robin left side) and Standard C


Page 11-13
Figure 11.11: Potassium results for Standard C (round robin left side) and Standard C

Figure 11.12: Magnesium results for Standard C (round robin left side) and Standard C

Summary of standard analyses
The results of the standards analyses for Li, K and Mg, included in Figures 11.4 through
11.12, are summarized in Table 11.2. This table lists the statistics, number of samples
exceeding the acceptable failure criteria of the mean 2 standard deviations, and the
relative standard deviation (RSD) for each standard. Standard analyses at the University
of Antofagasta indicate very acceptable accuracy. There are only two exceptions: one


Page 11-14
failure for potassium analysis of the Standard A (Figure 11.5) and one failure for Mg
analysis of the Standard B (Figure 11.9). Each of these failures is not significant.

From Table 11.2 the relative standard deviation values (measure of precision) for the
University of Antofagasta analyses range from 1.36 to 2.67, indicating very good
analytical reproducibility for the standard analyses conducted at the primary laboratory.
Based on the analysis detailed above, the authors are of the opinion that the lithium,
potassium and magnesium analyses are accurate. There is also a good reproducibility or
precision in the assay values reported by the University of Antofagasta for these three
elements.


Page 11-15
Table 11.2: Standards analysis results from U. Antofagasta
Statistics Li (mg/L)
Standard A B C
Count 14 14 14
Min 1095 855 675
Max 1150 950 725
Mean 1128 914 699
Standard Deviation 15.3 21.9 14.2
Mean 2 Standard Deviation
Mean + 2SD 1159 958 728
Mean - 2SD 1098 870 671
No of Failures >2SD 0 0 0
Relative Standard Deviation
RSD 1.36 2.40 2.04

Statistics K (mg/L)
Standard A B C
Count 14 14 14
Min 7896 6291 4883
Max 8510 6830 5215
Mean 8090 6533 5033
Mean + 2SD 8405 6818 5207
Mean - 2SD 7774 6247 4858
RSD 1.95 2.18 1.74

Statistics Mg (mg/L)
Standard A B C
Count 14 14 14
Min 6875 5588 4275
Max 7450 6225 4600
Mean 7169 5915 4487
Mean + 2SD 7466 6231 4691
Mean - 2SD 6872 5600 4284
RSD 2.07 2.67 2.27


Page 11-16
11.3.3.4 Check analyses at secondary laboratory
Checks analyses were conducted at Alex Stewart located in Mendoza, Argentina. About
15% of external duplicates (61 samples) were submitted. In addition, some blanks and
standard control samples were inserted to monitor accuracy and potential laboratory
bias. The total number of samples in the batch was 70. The standards indicated
acceptable accuracy and precision for Li and K.

Statistical analysis of the 61 pairs of check sample assay values was conducted using
Reduction-to-Major-Axis (RMA) multiple linear regressions for Li, K and Mg.
StatGraphics software was used for this analysis. The results are summarized in Table
11.3 and shown graphically in Figures 11.13, 11.14 and 11.15 for Li, K and Mg.

Table 11.3 Check assays (U. Antofagasta vs. Alex Stewart): RMA regression statistics
Maricunga Project - RMA Parameters
Element R
2
Pairs m Error (m) B Error (b) Bias
Li (mg/L) 0.98223 61 0.8598 0.01511 83.2787 19.2822 14.02%
K (mg/L) 0.98675 61 1.0207 0.01539 521.422 141.618 -2.07%
Mg (mg/L) 0.97183 61 1.0978 0.02433 -217.714 206.109 -9.78%

The R-squared statistic is the indicator of the quality of the fit. High values of this
coefficient reflect a good fit and low values a poor fit.

The bias, which is a measure of accuracy (the higher the bias, the lower the accuracy),
is calculated as Bias (%) = 1 RMAS where RMAS is the slope (m) of the Reduction-to-
Major-Axis regression line of the secondary laboratory ICP values (ASA) versus the
primary laboratory AAS values (University of Antofagasta) for each element. Because of
different analytical finish, in general the UoA obtained a little higher assay values for
lithium and a little lower for potassium and magnesium, as shown in Table 11.4.


Page 11-17
Table 11.4: Check assays between the University of Antofagasta and Alex Stewart
Statistics UA Li ASA Li UA K ASA K UA Mg ASA Mg
(mg/L) (mg/L) (mg/L) (mg/L) (mg/L) (mg/L)
Count 61 61 61 61 61 61
Min 470 447 3828 4123 2838 3030
Max 1850 1697 13750 14396 13200 14574
Mean 1240 1149 8946 9654 8199 8783
Std Dev 304 264 2152 2209 2146 2390
Precision 7.5 7.8 7.6
% Bias 14.02 -2.07 -9.78
Correlation 0.9822 0.9868 0.9718
%<10% 88 85 87
%<15% 98 100 98

Precision in Table 11.4 was assessed through the Relative Percent Difference or
Relative Error, defined as the absolute value of the difference between two similar
analyses, and divided by the average between these two assays. Precision of the
external duplicate analyses is acceptable for Li, K and Mg. Eighty-eight per cent of the Li
assays are within 10% of one another (ASA considers acceptable 10% RPD for check
samples analyzed in the same lab).

The RMA plots shown below (Figures 11.13, 11.14 and 11.15) reveal than the fitted
model is a little better for potassium (higher R-squared coefficient) than for lithium and
magnesium. Potassium also shows a very acceptable bias figure.


Page 11-18
lithium (mg/L).

potassium (mg/L).

Plot of Fitted Model
0 0,4 0,8 1,2 1,6 2
(X 1000)
Li values UA
0
300
600
900
1200
1500
1800
L
i

v
a
l
u
e
s

A
S
A
3800 5800 7800 9800 11800 13800
K values UA
4
6
8
10
12
14
16
(X 1000)
K

v
a
l
u
e
s

A
S
A


Page 11-19
magnesium (mg/L)

Based on the analysis detailed above, the authors are of the opinion that the check
assays indicate that the economic cation concentrations (Li & K) determined for the main
sample assays are suitable for use in a resource calculation.

11.3.3.5 Sample duplicate analyses

Sixty-one duplicate samples were collected in the field to confirm the overall sampling
precision, and shipped also to the University of Antofagasta laboratory. Table 11.5 lists
the statistics, as well as the calculated precision, bias, correlation and percent of
duplicate analyses with results within 5% of one another. The bias and correlation were
calculated through RMA plots, constructed with StatGraphics software, shown in Figures
11.16, 11.17 and 11.18. The duplicate analysis repeats exceedingly well, as shown in
these RMA plots.

0 3 6 9 12 15
(X 1000)
Mg values UA
0
3
6
9
12
15
(X 1000)
M
g

v
a
l
u
e
s

A
S
A


Page 11-20
Table 11.5: Duplicate analyses from the University of Antofagasta
Statistics Li Duplicate K Duplicate Mg Duplicate
(mg/L) Li (mg/L) (mg/L) (mg/L) (mg/L) Mg (mg/L)
Count 61 61 61 61 61 61
Min 470 470 3853 3918 3031 3006
Max 1938 1950 13506 13519 14425 14250
Mean 1261 1265 9098 9090 8444 8445
Std Dev 298 299 2159 2134 2107 2090
Precision 1.17 1.25 1.31
% Bias 0.03 1.42 1.07
Correlation 0.9938 0.9950 0.9946

%<5% 100 100 95

Assay results for duplicate samples at the U. Antofagasta indicate excellent precision
(within 5% or less) for Li, K and Mg. Bias between duplicates and main samples are
within 2% and correlation is high (R
2
=0.9938 to 0.9950) for the three elements.


Page 11-21
lithium (mg/L).

potassium (mg/L)

0 0,4 0,8 1,2 1,6 2
(X 1000)
Lithium U Antofagasta
0
0,4
0,8
1,2
1,6
2
(X 1000)
L
i

D
u
p
l
i
c
a
t
e
s

U
A
3800 5800 7800 9800 1180013800
Potassium U Antofagasta
3900
5900
7900
9900
11900
13900
K

D
u
p
l
i
c
a
t
e
s

U
A


Page 11-22
magnesium (mg/L)

11.3.3.6 Sample contamination
Potential sources of sample contamination are related to sample mis-ordering errors or
insufficient washing of analytical equipment between samples. A field blank consisting of
distilled water was inserted into the sample stream 20 times. New plastic bottles were
used in all the cases to avoid eventual contamination with brine samples.

Results reported by the University of Antofagasta indicate <0.05 mg/L (detection limit for
lithium) in the majority of blank samples. However, there are four results, corresponding
to the last two sample batches with 0.07 (2), 0.08 and 0.09 mg/L for lithium. This reveals
that some small contamination with brine was produced in the manipulation of the plastic
bottles, either at the project site, or in the lab.

0 3 6 9 12 15
(X 1000)
Magnesium U Antofagasta
0
3
6
9
12
15
(X 1000)
M
g

D
u
p
l
i
c
a
t
e
s

U
A


Page 11-23
11.4 Specific yield and porosity testing
Daniel B. Stevens & Associates Inc. in Albuquerque, New Mexico (DBSA) was selected
as the prime laboratory for determination of porosity and Relative Brine Release
Capacity (RBRC) (equivalent to specific yield (S
y
)) data for the core samples. DBSA also
undertook analysis of particle size, density and other physical properties of the core
samples. DBSA received a total of 285 core samples which had been initially prepared
by Li3 staff at the field camp on the salar. All samples were prepared and shipped to
DBSA as detailed in section 11.1 of this report. On receipt of samples at DBSA, the
samples were treated in one of three ways in preparation for determination of Relative
Brine Release Capacity. These were:

1) the entire intact sample was used,
2) an intact sub-sample was obtained by cutting the original sample acetate sleeve
with a chop saw,
3) an intact sub-sample was obtained by pushing a smaller diameter testing ring
into the original sample.

All but six samples received were subject to RBRC testing. The six samples not used for
RBRC testing were considered to be too brittle or crumbly to obtain an appropriate sub-
sample. Thirty-four (34) verification tests (duplicates) were also performed, for a total of
313 RBRC tests. After completion of RBRC tests, 30 samples were selected for particle
size analysis

11.4.1 Relative brine release capacity test
The Relative Brine Release Capacity test predicts the volume of solution that can be
extracted from an unstressed geologic sample. The test method is briefly described
below:
Undisturbed samples from the site are saturated in the laboratory using site
specific brine solution. The bottom of the samples are then attached to a
vacuum pump using tubing and permeable end caps, and are subjected to a
suction of 0.2 to 0.3 bars for 18 to 24 hours. The top end cap is fitted with a
one-gallon air bladder which allows sufficient drainage while inhibiting
continuous atmospheric air flow. The vacuum system permits testing


Page 11-24
multiple samples simultaneously in parallel. The samples are then oven
dried at 110C.

Based on the density of the brine, the sample mass at saturation, and the
sample mass at vacuum dry, the volumetric moisture (brine) contents of
the samples are calculated. The difference between the volumetric
moisture (brine) content of the saturated sample and the volumetric
moisture (brine) content of the vacuum dry sample is the relative brine
release capacity".

This methodology has been widely accepted by companies involved in the lithium brine
exploration activities and is regarded as being a suitable method for determination of
Specific Yield (Houston, 2011).

DBSA also undertook several verification tests related to RBRC testing. These included
the following:
Remolded samples in cases where there was insufficient intact original
material for secondary testing. Samples were prepared for testing by
remolding the material to target the initial density after the initial testing was
performed.
Samples designated as 'Sub-sample #2' were prepared for testing by
obtaining a separate intact sub-sample from the original core.
Samples designated as 'Day 1' and 'Day 2' are the same sub-sample, only
the time the sample was subjected to vacuum suction was varied (18-24
hours and 36-28 hours, respectively).
Particle Size Analysis:
After RBRC testing, thirty (30) of the samples were chosen to be used for
particle size analysis (PSA). The samples were chosen with the intent to
represent each of the material types present in the sample batch. Several of
the sample results indicate discontinuity between the physical particle size
analysis and the hydrometer analysis due to high clay and/or salt content.

DBSA employed the following standard test methods for determination of some of the
physical properties of the samples:


Page 11-25
Dry Bulk Density: ASTM D7263
Moisture Content: ASTM D7263
Calculated Porosity: ASTM D7263
Particle Size Analysis: ASTM D422
USDA Classification: ASTM D422, USDA Soil Textural Triangle

DBSA relied upon the brine solution density (1.22) provided by Li3 in calculating the
volumetric moisture (brine) content. Particle densities of the samples were calculated
based on the assumption that the samples were 100% saturated after the saturation
stage of the test procedure. The calculated particle density was then used to calculate
the total porosity of each of the samples. Volume measurements for each sample were
obtained at the as received, saturated, and vacuum dry conditions. It is noted that
due to irregularities on the sample surfaces, volume measurements should be
considered as estimates.

A total of 20 samples tested were noted to have questionable integrity (QI) relative to the
in situ conditions described by the Li3. For sands, silts, and clays a questionable
integrity designation indicates that the sample may, or may not, accurately represent in
situ conditions (material appeared loose initially) relative to presumed in situ conditions.
For halite cores a questionable integrity designation indicates that the sample core had
grooves, pits, or other void spaces that may, or may not, be a result of the sampling
technique employed. For halite cores a 'questionable integrity may indicate that some
dissolution has occurred during testing.

RBRC test results - DBSA
Drainable porosity is largely dependent on lithology which is highly variable in the
Maricunga brine aquifer as observed from the drilling results. Therefore, based on visual
inspection and particle size analyses the samples were grouped in three types as
follows: 1) a halite mix, 2) a silt-clay mix and 3) a sand mix. Table 11.6 shows the
results of the laboratory drainable porosity analyses.
.


Page 11-26

Table 11.6: Results of laboratory specific yield (S
y
) analyses
S
y
- Halite mix S
y
- Silt-clay mix S
y
- Sand mix
Number of samples 56 195 29
Max 0.203 0.066 0.310
Min 0.002 0.001 0.015
Mean 0.034 0.012 0.061

11.4.2 British Geological Survey porosity tests
Thirty (30) core samples prepared as described in Section 10 of this Report were
shipped to the British Geological Survey (BGS) for determination of porosity and specific
yield. The samples were duplicates of samples shipped to DBSA for RBRC testing. Full
results from the BGS test work are pending. Preliminary data show significantly higher
porosity and drainable porosity values than reported by DBSA, as shown by the
preliminary data in Table 11.7. Reasons for the differences are under investigation.

Samples were initially centrifuged to release pore fluid to determine Sy in "as received
conditions". The chemistry of released pore fluid will be analyzed for a double check
against UoA and ASA results. Chemical analyses results are not yet available.

The samples were then re-saturated and allowed to drain (similar to the RBRC test) and
then oven dried to obtain total porosity values. Porosity will also be evaluated using the
helium injection method. This work has not yet been undertaken.


Page 11-27
Table 11.7: Preliminary BGS porosity and specific yield data

Sample Grain Porosity Sy Lithology
density
(g/cm3) (%)
286 2.35 23.33 0.01 gy cl-sa
288 2.42 21.74 0.04 gy gritty cl
289 2.49 17.69 0.01 gy gritty cl wet
290 2.45 22.55 0.03 gy gritty cl wet
291 2.12 38.02 0.02 dk-gy-blk lam cl-si
295 2.08 33.91 0.02 gr-gy lam cl-si
296 2.05 15.55 0.01 gy cl
298 2.49 42.07 0.31 gy c-sa friable
305 2.07 37.79 0.02 buff-lt-br lam cl-si
306 1.98 27.61 0.02 br cl
307 1.95 28.79 0.02 br-blk banded cl
308 2.10 33.43 0.03 gr-gy blk mott cl si
309 1.99 27.29 0.02 blk cl wi bands
310 2.42 19.51 0.03 dk gy gritty ha
311 1.87 17.53 0.07 pink-buff cl wi ha and ha xtals
312 1.90 15.62 0.06 pink-buff cl wi ha and ha xtals
313 2.17 35.08 0.03 buff cl wi ha and ha bands
314 2.18 19.79 0.02 buff cl wi mott ha? bands
315 2.14 32.27 0.02 br cl with mottl ha?
316 2.08 26.83 0.02 br-blk mott cl
317 1.98 36.99 0.03 blk cl with ha
318 2.01 15.85 0.02 buf-br blk poor cl

Values in red are still drying and tests are incomplete

11.4.3 Porosity and specific yield summary

Pending receipt of final results from BGS and determination of the reported differences
between the DBSA results and the BGS results, the authors are of the opinion that the
DBSA results should be used for resource estimation purposes.


Page 11-28
11.5 Quality control/quality assurance summary

Based on the results of the QA/QC analysis, the authors are of the opinion that the
assay results are accurate and can be relied upon for use in resource estimation.


Page 12-1
12 DATA VERIFICATION
Data verification procedures employed by the authors included the QA/QC analysis
detailed in Section 11, above and review of the assay data base against the assay
certificates. No errors were found in the assay data base. The authors did not collect any
independent check samples for assays. During the course of the drilling and sampling
program at least one of the authors was present to observe the procedures and it is the
opinion of the authors that no independent check sampling was required. In the opinion
of the authors, the assay data are suitable for resource estimation purposes.


Page 13-1
13 MINERAL PROCESSING AND METALLURGICAL TESTING
13.1 Background
In order to study the phase chemistry of the Maricunga brine, the initial step for
designing a lithium recovery process, a simulated lab solar evaporation test work was
conducted by CICITEM at the University of Antofagasta, northern Chile. Two batch wise
evaporation tests at laboratory scale were carried out at a relatively constant
temperature of 20
o
C. The natural brine was used in the first test and in the second one a
treated brine with sodium sulfate, to remove most of the high calcium content that
characterizes the Maricunga brine. Both tests have provided information on the nature of
the crystallized salts along the different stages of an evaporation process, which has
been useful for process simulations.
A summary of the experimental procedure and the main results of both tests are
presented below:

13.2 Experimental procedure
A total brine feed of 192.04 kg was used in the first test (natural brine), distributed in four
fiberglass glass reinforced plastic pans, each of 75.5 cm diameter and 12.3 cm height.
The brine evaporation takes place at a temperature of 20 deg. C into a thermally
insulated chamber (3.5-m long by 1-m wide by 0.8-m high), where a fan with variable
speed propels air. Temperature, air speed and relative humidity, are measured through a
data acquisition system to monitor the evaporation. This evaporation chamber operates
continuously (24 hours) with air having relative humidity of 60 to 75%.

The amount of salt deposited in the pans, weighed by a digital scale, was used to define
each stage (harvest) of evaporation, as well as determining the cumulative percentage of
evaporated water. Samples of the solution and the salts after filtration were collected
from every stage for chemical analysis and X-ray diffraction.

When the Maricunga brine is getting more concentrated and the brine volume has
diminished significantly, the evaporation is continued in another insulated chamber
(1.18-m long by 0.70-m wide by 0.46-m high). The concentrated brine has a much lower
brine activity (vapor pressure of the brine divided by the vapor pressure of the water),
which results in lower evaporation rates.


Page 13-2
The second chamber operates continuously with dehumidified air, which circulates
through three PVC columns containing silica gel as drying agent. Under these
conditions, the air can reach a relative humidity of the order of 40%. When the silica gel
gets saturated, heating in a dryer at 120C activates it for re-use.

As per the brine treated previously with anhydrous sodium sulfate (10% excess was
used to precipitate 88.7% of Ca
++
), a total of 156.04 kg, distributed in three pans, was
fed to the evaporation system. The next table shows the composition of the natural brine
and treated brine used in the evaporation test work.

Table 13.1: Chemical composition (% weight) of brines used in the test work
Brine Na K Li Ca Mg Cl SO4 H3BO3 HCO3 Density
Natural 7.81 0.676 0.0933 0.743 0.616 16.44 0.059 0.216 0.044 1.20761
Treated 8.59 0.547 0.0927 0.102 0.578 16.10 0.440 0.234 0.040 1.20787

A general view of the two evaporation chambers is shown in Photo 13.1.

Figure 13.1: General view of evaporation chambers


Page 13-3

13.3 Results of the evaporation tests

The natural brine was concentrated up to 0.925% lithium and 3.95% magnesium in
twelve stages of evaporation, being 69.1% the cumulative evaporation.
The treated brine was concentrated up to 1.98% lithium and 6.08% magnesium in nine
stages of evaporation, with a cumulative evaporation of 68%.
Due to the low activity of the concentrated brine, it was necessary to increase the
evaporation temperature to 30
o
C during the last stages of both tests.
The following two tables show the changes in the chemical composition of the untreated
brine as well as of the wet salt composition after every harvest (12) of the pans. Some
data (marked in orange color) have to be verified by Cicitem. Table 13.3 also shows a
mass balance (crystallized salts, solution and evaporated water) referred to the initial
weight of brine for each evaporating stage at 20
o
C. The brine has been concentrated
until the end of the carnallite field.

Table 13.2: Brine compositions during evaporation of the untreated brine

Brine

Density 20C Activity, 20C
Mg Ca Na K Li Cl SO4 B H2O kg/l (Vpbrine
/Vpwater)
% % % % % % % % %
0.616 0.743 7.810 0.676 0.093 16.440 0.059 0.038 73.525 1.20761 0.775
1.080 1.300 6.150 1.220 0.167 16.560 0.062 0.069 73.392 1.21768 *
1.280 1.710 5.370 1.490 0.204 17.600 0.040 0.090 72.216 1.22526 *
1.790 2.340 4.030 1.990 0.280 18.220 0.040 0.114 71.196 1.23663 *
2.500 3.160 1.900 2.620 0.394 20.260 0.010 0.158 68.998 1.26965 *
2.650 3.520 1.480 2.430 0.423 20.390 0.010 0.169 68.928 1.26902 0.606
2.690 3.580 1.480 2.380 0.431 20.500 0.020 0.171 68.748 1.27017 0.618
3.130 4.110 0.868 1.910 0.508 22.220 0.020 0.204 67.030 1.28485 0.570
3.389 4.540 0.506 1.500 0.561 22.940 0.037 0.216 66.311 * *
3.417 5.165 0.366 0.907 0.655 24.040 0.022 0.245 65.183 1.32527 0.398
3.263 5.550 0.347 0.873 0.685 24.660 0.005 0.247 64.370 1.31376 0.518
3.570 5.670 0.299 0.679 0.709 25.120 0.018 0.257 63.678 1.32864 0.404
3.950 7.630 0.086 0.088 0.925 30.670 0.000 0.268 56.383 1.37405 0.292

* No measurements


Page 13-4
The density and activity of the brine along the concentration process is also indicated.
Additionally, the moisture of the crystallized salts after harvesting and filtration of the
solution is included in Table 13.3.

Table 13.3: Salts compositions during evaporation of the untreated brine
Salts Brine Evapor. Mg Ca Na K Li Cl SO4 B H2O Moist
kg kg kg % % % % % % % % % %
Brine feed 192.04
Harvest 1 19.91 117.91 54.22 0.069 0.122 36.210 0.082 0.009 57.890 0.136 0.008 5.47 4
Harvest 2 8.85 84.09 26.10 0.135 0.296 35.430 0.282 0.016 56.520 0.360 0.014 6.95 4
Harvest 3 6.04 61.23 16.76 0.182 0.248 35.670 0.312 0.021 56.600 0.170 0.018 6.78 5
Harvest 4 5.05 41.43 14.74 0.220 0.351 34.970 1.815 0.033 57.690 0.250 0.013 4.66 4
Harvest 5 0.74 39.00 1.58 0.080 0.109 37.230 0.128 0.013 58.920 0.380 0.016 3.12 3
Harvest 6 0.12 37.46 1.35 0.378 0.528 20.560 16.940 0.060 50.790 0.110 0.026 10.61 9
Harvest 7 1.29 31.92 4.98 0.426 0.536 17.940 21.440 0.066 50.960 0.150 0.035 8.45 8
Harvest 8 0.78 17.78 2.70 5.556 0.709 6.890 11.830 0.042 40.100 0.092 0.041 34.74 5
Harvest 9 2.68 21.22 4.30 6.410 0.665 6.480 10.590 0.037 40.730 0.058 0.069 34.96 4
Harvest 10 0.24 6.21 1.39 7.425 0.779 2.370 10.670 0.089 37.770 0.034 0.054 40.81 8
Harvest 11 0.97 16.64 3.16 5.660 3.090 2.580 7.010 0.263 33.040 0.129 0.919 47.31 3
Harvest 12 1.64 12.27 2.72 6.670 3.920 1.730 5.060 0.362 36.420 0.001 0.173 45.66 14

Table 13.4 shows the main estimated crystallized salts in each harvest according to
mineralization calculated by Cicitem and X-ray diffraction analysis.


Page 13-5
Table 13.4: Crystalized Salts in the harvest

N
a
C
l

K
C
l

C
a
S
O
4
.
2
H
2
0

a
n
d
/
o
r

N
a
2
C
a
(
S
O
4
)
2

K
C
l
*
M
g
C
l
2
*
H
2
O

C
a
C
l
2

*
2
M
g
C
l
2

*
1
2
H
2
O

C
a
B
6
O
1
0
*
6
H
2
O

Harvest 1 1 1
Harvest 2 1 1
Harvest 3 1 1
Harvest 4 1 1
Harvest 5 1 1 1
Harvest 6 1 1
Harvest 7 1 1 1
Harvest 8 1 1
Harvest 9 1 1 1
Harvest 10 1 1 1
Harvest 11 1 1 1 1
Harvest 12 1 1 1 1 1

According to the salt composition, harvests 11 and 12 should have tachhydrite; however
analyzing the brine evaporation curves of the ions presented by Cicitem (pairs K/Li and
Ca/Mg), it is expected that this salt has not yet been crystallized, and the authors
suspect that the calcium and lithium are still entrained of brine in the harvested salts.
In Figure 13.2 the complete evaporation curve for the untreated brine can be analyzed
and in Figure 13.3 there is a representation for the concentrated brine when the levels of
sodium and potassium are very low.

However, since the brine is saturated in sodium chloride, the known phase diagram
(Janecke projection) of the aqueous system (Na
+
, K
+
, Mg
++
, SO
4
=
, Cl
) at 25C is more
appropriate for representation of the evaporation path, as shown by Figure 13.5, where
lithium has been associated to magnesium.


Page 13-6
Figure 13.2: Evaporation curves plotted versus % Li in the brine


Page 13-7
Figure 13.3: Representation of the evaporating path in the aqueous system of Ca-Mg-
Li at 25
0
C

Figure 13.4: Evaporation path of the untreated Maricunga brine in the aqueous system
of Na
+
, K
+
, Mg
++
, SO
4
=
, Cl
at 25C


Page 13-8
The results of the brine evaporation, after treatment with sodium sulfate to remove most
of the calcium, are presented in the next tables. Some values (marked in red) are subject
to revision by Cicitem.

Table 13.5: Brine composition during evaporation of the treated brine
8r|ne Dens|ty, 20 C Activity, 20 C
Mg Ca Na K Li Cl SO4 B H2O Kg/l ( Vpbr/Vpwater)
% % % % % % % % % %
0.578 0.102 8.590 0.547 0.093 16.100 0.440 0.041 73.509 1.20787 *
0.984 0.108 7.910 1.110 0.154 16.590 0.510 0.062 72.572 1.21019 *
1.240 0.127 7.160 1.404 0.199 16.910 0.600 0.079 72.281 1.2273 0.664
1.540 0.077 6.270 1.800 0.261 16.980 0.650 0.101 72.321 1.21899 0.706
1.920 0.088 5.140 2.250 0.325 17.230 0.730 0.129 72.188 1.22507 0.693
2.600 0.141 3.910 3.000 0.428 18.130 0.860 0.168 70.763 1.23517 0.535
3.130 0.030 2.730 3.007 0.514 18.510 1.000 0.178 70.901 1.23518 0.443
4.705 0.013 1.050 2.007 0.764 20.620 1.380 0.305 69.156 * *
6.771 0.016 0.160 0.133 1.130 25.960 0.466 0.571 64.793 1.31812 0.248
6.080 0.012 0.093 0.062 1.980 28.080 0.084 0.721 62.888 1.32492 *

Table 13.6: Wet salt compositions during evaporation of the treated brine
Salts Brine Evapor. Mg Ca Na K Li Cl SO4 B H2O Moist
Kg kg kg % % % % % % % % % %
Brine feed 156.24
Harvest 1 16.87 95.42 43.90 0.070 0.592 36.410 0.088 0.010 57.630 0.740 0.006 4.454 3
Harvest 2 6.27 70.38 18.60 0.139 0.290 35.020 0.171 0.021 55.670 0.770 0.012 7.907 8
Harvest 3 3.92 47.28 19.10 0.128 0.241 36.510 0.160 0.020 56.730 0.730 0.016 5.465 5
Harvest 4 2.94 30.84 6.40 0.791 1.052 20.540 13.51 0.127 49.740 0.620 0.066 13.55 2
Harvest 5 1.43 23.39 6.00 0.141 0.318 37.120 0.217 0.022 59.230 0.990 0.019 1.943 1
Harvest 6 2.34 15.24 5.80 0.259 0.338 30.180 7.820 0.020 56.000 0.950 0.027 4.406 2
Harvest 7 2.10 4.15 1.80 5.556 0.709 6.890 11.83 0.042 40.100 0.092 0.041 34.74 3
Harvest 8 0.56 6.36 4.00 6.004 0.088 2.830 8.430 1.840 31.670 11.550 0.085 37.50 3
Harvest 9 2.51 2.56 1.29 9.910 0.009 0.247 0.230 0.599 32.380 0.836 0.605 55.18 12


Page 13-9
Figure 13.5: Evaporation path of the treated brine in the aqueous system of Na
+
, K
+
,
Mg
++
, SO
4
=
, Cl
at 25C; lithium associated to magnesium

13.4 Discussion of results and conclusions

The Maricunga natural brine was concentrated at laboratory scale and at a relatively
constant temperature of 20C from 0.093% up to 0.925% lithium (about 10 times) in
twelve stages of evaporation, using 192 kg as brine feed. The cumulative evaporation
was 69.1%.

On the other hand, the treated brine (156 kg), with most of the calcium removed (88.7%),
was concentrated in the same period of time along nine stages of evaporation up to
6.08% Mg and 1.98% Li (twenty-one times for this element). The cumulative evaporation
was 68%.

The pretreated brine follows the pattern of the Atacama brine, with crystallization of
carnallite and then bischofite, when the brine reaches 6.77% Mg in harvest 8. The
mineralization shows the formation of Li
2
SO
4
.H
2
O (13.5%) and lithium carnallite,
(10.5%), but the predominant species is carnallite, (60.5%). The X-ray diffraction


Page 13-10
indicates the formation of carnallite (75.6%), lithium sulfate monohydrate (11.1%), but
the presence of lithium carnallite is not detected. In harvest 9 the predominant salt is
bischofite, MgCl2.6H2O (69%).

The main conclusions from the two evaporation tests conducted at the University of
Antofagasta are that two processing routes should be evaluated to recover lithium from
the Maricunga brine.

The first one would be to concentrate the natural brine at the solar ponds up to
approximately 3% lithium. Then, the concentrated brine would go to the chemical plant to
complete its purification (separation of boron by SX and removal of magnesium &
calcium), before the precipitation of lithium carbonate with sodium carbonate. Since the
3% Li-concentrated brine would still contain a significant amount of Mg together with Ca,
the important consumption of sodium sulfate at the plant should be taken into
consideration.

The second route would be to remove most of calcium and magnesium at the ponds, the
last one as crystallized salts. However, the brine treatment with sodium sulfate should be
carried out at an intermediate stage to reduce the consumption of this input, and on the
other hand, the system would operate with less sulfate along the evaporation process, to
avoid the precipitation of lithium sulfate salts and making it possible the production of a
concentrated brine higher in lithium.


Page 14-1
14 MINERAL RESOURCE ESTIMATE
14.1 Overview
The measured and inferred resource estimates were developed for the Li3 Salar de
Maricunga project area using SgeMS software. Dr. Gregoire Mariethoz, Professor at the
School of Civil and Environmental Engineering, University of New South Wales, Australia
led the numerical model efforts to develop the resource estimates. Frits Reidel, CPG
was in close communication with Dr. Mariethoz throughout the model development
process; all results have been reviewed and checked at various stages and are believed
to valid and appropriate for these resource estimates.

The model resource estimate is limited to the Li3 mining concessions in Salar de
Maricunga that cover an area of 1,438 ha. The measured lithium and potassium
resources are calculated to a depth of 150 m. The inferred lithium and potassium
resources have been calculated over the same area for the depth interval between of
150 m and 180 m.

The datasets used to develop the measured lithium and potash resource estimates are
based on results from six appropriately spaced sonic boreholes (one sonic bore per 2.4
km
2
) with infill results from three RC boreholes resulting in an overall borehole density of
one bore per 1.6 km
2
. The distributions of lithium and potassium concentrations in the
model domain are based on a total 623 brine analyses (431 main analyses and 192
QA/QC analyses) as discussed in Sections 10 and 11 of this technical report. The
spatial distribution of specific yield in the model domain is based on porosity analyses of
285 undisturbed samples and six shallow pumping tests as described in Section 9 and
11 of this Report. It is the opinion of the authors that the density and quality of the
datasets used to prepare the resource estimates herein are adequate and appropriate.
14.2 Model methodology and construction

Step 1: Preliminary data analyses
As an approximate preliminary step, an integration was carried out by computing the
average resource in the boreholes only. Li is defined as the lithium concentration, Sy as
the porosity and L as the length of each sampling interval. The resource available in
each sampling interval x is given by


Page 14-2
R(x) = Li(x) * Sy(x) * I(x).
Summing R over all boreholes and dividing by the total boreholes length yields an
estimate in g/m3. An identical procedure was carried out for potassium. The results of
the calculations provide approximate grades as shown in Table 14.1 to validate the
realism of the kriging and stochastic analyses below.

Table 14.1: Average lithium and potassium grades
Average Li resource (g/m
3
) Average K resource (g/m
3
)
54.29 390.61

Step 2: Taking account for the spatial distribution

Analysis of the assay data indicate that lithium and porosity are not correlated with
porosity (Figure 14.1), with a value of R
2
of 0.0123. Therefore they can be both
interpolated independently on a regular grid.

Figure 14.1: Correlation lithium - porosity

Geostatistical analysis provides the most appropriate method to interpolate values when
data are scarce [Chils and Delfiner, 1999; Deutsch and Journel, 1998; Goovaerts,
1997]. The most common methods are either kriging (in order to obtain an averages
estimation) or stochastic simulations (to obtain different scenarios, therefore allowing to
estimate uncertainty). In this study both options are investigated with the SGeMS
software [Remy et al., 2009]. If lithium and porosity were correlated together, the
interpolation would need to be constrained such that this correlation would need to be


Page 14-3
respected throughout the grid. This could be accomplished with co-kriging or co-
simulations, which are significantly more cumbersome to apply [Wackernagel, 2003].
Fortunately the use of these methods is not justified here.

There is a strong correlation between Li and K (correlation coefficient r = 0.96), but are
not correlated with Sy, with absolute values of r lower than 0.12. Li and K were modeled
separately; therefore their strong correlation is not explicitly imposed in the simulations.
However, since the final resource estimate for each element only depends on the
relationship to drainage porosity, this should not affect the final estimates, and it is not
necessary to use co-kriging or co-simulation. The high and low values in each simulation
of Li and K, taken separately, might not be highly correlated, however, on average the
data tend to agree, and in the kriging the high values of Li tend to be at the same
locations as the high values of K.

The first step of the geostatistical analysis is to adjust a variogram on the data. Figure
14.2 shows the parameters that are used and the procedure for variogram estimation.
Note that variograms are needed in 3 directions: N-S horizontal, E-W horizontal, and
vertical. Figure 14.3 to Figure 14.5 show the variogram fits for lithium and Figure 14.6 to
Figure 14.8 show the fits for porosity.

The horizontal variograms rely on few data and are inferred largely empirically due to the
spacing between boreholes and their relatively small number. This is because the
distance between boreholes varies between 750 and 4427 m, therefore making it difficult
to infer from the data horizontal spatial correlation for scales under 750 m.


Page 14-4
Figure 14.2: Parameters used to infer the experimental variograms

Step 3: Variogram adjustment for Lithium Concentration

Figure 14.3: Lithium vertical direction


Page 14-5
Figure 14.4: Lithium N-S direction (experimental variogram)

Figure 14.5: Lithium E-W horizontal direction


Page 14-6
Step 4: Variogram adjustment for porosity

Figure 14.6: Porosity N-S direction

Figure 14.7: Porosity E-W direction


Page 14-7

Figure 14.8: Porosity vertical direction


Page 14-8
Step 5: Definition of the gridded domain

The grid used for the resource estimation is made of 354244 nodes. The dimensions are
44 x 83 x 97 nodes, and the size of each node is 50 x 50 x 2 m (Figure 14.9).

Figure 14.9: Grid characteristics, domain definition, and view of the lithium
concentration on the boreholes

Step 6: Kriging results

Kriging represents in each point the most probable value and therefore can be used to
obtain a single estimate. However, kriging is a smooth estimate that does not account for
heterogeneity, and therefore it often represents a conservative estimate. In particular
here, it will not account for areas of very high or very low concentration or extreme
porosity values.

Kriging can be seen as the average of all possible scenarios. In contrast, stochastic
simulations (see below) provide a means of obtaining several realistic scenarios
(realizations) that can be analyzed statistically.


Page 14-9
Figure 14.10: The results of the kriging lithium concentration

Figure 14.11: The results of kriging porosities

Step 7: Stochastic simulations results

The next step is to produce stochastic simulations of both lithium and porosity using the
Sequential Gaussian Simulation algorithm implemented in SGeMS. These stochastic
simulations correspond to possible scenarios that are consistent with:
- the spatial statistics (variograms) inferred from the data.
- the boreholes.

A number of these scenarios (also called realizations) are generated and used to get a
probability distribution for the resource. Similarly as for kriging, realizations are
generated separately for lithium concentration and for porosity. The modeling program
generated 50 realizations for lithium concentration and 50 realizations for porosity. This


Page 14-10
corresponds to 50 scenarios of the deposit. Examples of the model realizations are
provided in Figures 14.12 and 14.13.
Figure 14.12: Three scenarios (realizations) for lithium concentration

Figure 14.13: Three scenarios (realizations) for porosity


Page 14-11
Step 8: Resource estimation

The estimates of the amount of lithium and potassium in each node x
i
of the model are
done by applying the following operation:

R(x
i
) = Li(x
i
) * Sy(x
i
),

Where: i is the indice of the node, going from 1 to 354244
R represents the resource (g/m
3
), Li the lithium concentration in brine,
and Sy the porosity.

This provides a 3D grid of the resource for the kriging estimates, as well as a 3D
resource grid for each of the 50 pairs of lithium/porosity scenarios.

Step 9: Total estimates

The total resource for each case is obtained by averaging R(x
i
) over all nodes i. This
provides one total estimate for kriging, and also one estimate for each of the 50
scenarios. Figure 14.14 summarizes these results, with kriging giving a lithium estimate
of 36 g/m
3
and stochastic simulations estimates ranging between 42.5 g/m
3
and 73 g/m
3
.
Kriging gives a potassium estimate of 260 g/m
3
and stochastic simulation estimates
range between 310 g/m
3
and 525 g/m
3
. It should be noted that the kriging estimate is
lower, which can be explained by the fact that kriging ignores heterogeneity and extreme
values.


Page 14-12
Figure 14.14: Synthetic view of the total estimates. The red bar corresponds to the
kriging estimate and the blue bars correspond to the histogram of the values given by
the stochastic simulations.

Figures 14.15 and 14.16 show the distribution of lithium and potassium grades across
the project area.
Figure 14.15: Lithium grade distribution


Page 14-13

Figure 14.16: Potassium grade distribution

Figure 14.17 illustrates lithium concentrations across the property at various depths,
while Figure 14.18 provides similar information for potassium. Figure 14.19 illustrates the
porosity distribution across the Salar at selected depths.


Page 14-14
FIGURE 14.17: Lithium concentration at selected depth intervals


Page 14-15
FIGURE 14.18: Potassium concentration at selected depth intervals


Page 14-16
FIGURE 14.19: Porosity distribution at selected depth intervals


Page 14-17
14.3 Resource estimate

The lithium and potassium resource estimates were calculated from the average total
grades determined by the stochastic simulations and the defined aquifer volumes. The
results are summarized in Table 14.2. It should be noted that the resource is open at
depth and beyond the current project boundaries.

Lithium Potassium
Area (km
2
) 14.38 7.06 14.38 7.06
Depth interval (m) 0-150 150-180 0-150 150-180
Aquifer volume (km
3
) 2.157 0.212 2.157 0.212
Avg grade (g/m
3
) 50 50 360 360
Potassium (t) 776,250 76,320

Notes:

Frits Reidel, CPG.

574,064 56,368
1,482,638 145,771


Page 15-1
15 MINERAL RESERVE ESTIMATE
No mineral reserves have been estimated for the property.


Page 16-1
16 MINING METHODS
test trenches indicate that future brine production can likely be achieved through a
combination of production wells and open trenches.


Page 17-1
17 RECOVERY METHODS
The Salar de Maricunga brine is suitable for conventional processing, which principally
consists in solar evaporation of the brine to a suitable concentration where the brine can
be treated in a lithium carbonate plant. The concentrated Maricunga brine will require a
solvent extraction stage in order to remove the boron, a calcium removal stage with the
addition of sodium sulfate, and 2 magnesium removal stages, where magnesium is
removed as magnesium carbonate and magnesium hydroxide. Finally, a soda ash
solution will be added to the concentrated purified lithium brine to precipitate lithium
carbonate.

Potassium chloride can be produced by conventional processes. The process principally
consists of silvinite salt harvesting from the ponds and subsequently milling, and flotation
of the silvite (KCl) salts. Other potential by-products are magnesium chloride (bischofite)
and calcium chloride. The lithium recovery for this process was simulated to be around
50% and the potassium recovery around 70%, which is common in the industry.

Li3s strategic partner has developed a proprietary process which has demonstrated an
overall lithium recovery of more than 70% at small pilot scale. This process cannot be
disclosed for confidential reasons. Li3 and its strategic partner are planning a pilot plant
operation at the Salar de Maricunga in 2012 to demonstrate the process.


Page 18-1
18 PROJECT INFRASTRUCTURE
No designs or plans for future project infrastructure have been prepared.


Page 19-1
19 MARKET STUDIES AND CONTRACTS
19.1 Markets
Lithium finds application in a wide variety of end use applications (Figure 19.1), the most
prominent being the use of lithium in battery applications. Demand for lithium in
rechargeable and permanent battery applications has risen rapidly and is projected to
increase at compound average growth rates exceeding 6% through 2020. Total lithium
demand is anticipated to exceed 325,000 tonnes lithium carbonate equivalent in 2020
from a current (2011) demand level of approximately 190,000 tonnes lithium carbonate
equivalent (Figure 19.2 and 19.3).

Figure 19.1: Lithium demand by end use


Page 19-2
Figure 19.2: Lithium consumption, 2000 to 2011

Figure 19.3: Demand forecast for lithium

Source: Roskill Information Services


Page 19-3

Potassium, as potassium chloride, is primarily used in agriculture as a fertilizer. In this
form, potash is typically produced from large underground mines in Canada, Russia,
Germany and the United Kingdom. Economies of scale are significant as capital costs
for development of a new mine are extremely high. Li3 proposes to recover the
potassium in the brine and use the potash in the production of value added potassium
nitrate fertilizers. Production of potassium nitrate fertilizer would be based on reacting
potassium chloride with sodium nitrate. Potassium nitrate is a co-product of the
production of iodine from caliche ore and is a specialty fertilizer especially valued in the
Chilean viniculture, fruit and vegetable framing sectors. Potassium nitrate sells for
substantially more than potash. Li3 is proposing to enter into a strategic partnership with
a Chilean company to participate in the development of a caliche mining and processing
operation. By-product sodium sulphate from the caliche operation would be used by Li3
in the lithium brine processing operation.

19.2 Contracts

Li3 Energy has not entered into any contracts for production or sale of lithium or
potassium salts as of the date of this technical report


Page 20-1
20 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY
IMPACT
Environmental studies
LI3 is in the process of preparing an Environmental Impact Declaration (EID) to carry out
the studies contemplated for the completion of a Definitive Feasibility Study. This EID will
be submitted to the Regional Environmental Evaluation System (SEA) of the III Region
during June 2012 and is expected to be approved within a 4-6 month period.

The preparation of an Environmental Impact Assessment (EIA) for the construction,
operation and closure phases of the project has been started. Li3 has contracted GDH
environmental consultants as the main EIA contractor. The EIA will include a base line
assessment of conditions related to the biological and physical environments, socio-
economics, and infrastructure. Engineering assessments, alternatives, impact
evaluations and environmental management plans will be developed as part of the EIA.

Baseline monitoring activities for the project in relation to flora, fauna, limnology, water
quality and archaeology were initiated in April 2011. It is planned that the final EIA will
be submitted to the SEA during in Q2, 2013. The review and approval process period of
an EIA by the SEA is generally eight to 12 months.
Project permitting
Sectorial permits (PS) need to be obtained from the local authorities in the III Region (as
a matter of formality) once EIA approval is obtained and before construction is initiated.
Social or community requirements
The III Region of Chile has a well-established mining industry and culture. The Li3
project is remote from any communities and population centers and therefore will not
create any direct impacts. The EIA permitting process will address community and
socio-economic issues; it is expected the project will have a positive impact through the
creation of new employment opportunities and investment in the region.


Page 21-1
21 CAPITAL AND OPERATING COSTS
The project is at the exploration stage and capital and operating costs for development
of the project have not been evaluated.


Page 22-1
22 ECONOMIC ANALYSIS
No economic analysis of the project has been conducted as of the date of this Report.


Page 23-1
23 ADJACENT PROPERTIES
The Li3 property is adjacent to a number of other property holders on the Salar de
Maricunga. Li3 is currently in negotiations with several other parties to acquire additional
property adjacent to the current Li3 property.


Page 24-1
24 OTHER RELEVANT DATA AND INFORMATION
Lithium is not currently exploitable via regular mining concessions in Chile. Li3s mining
concessions within the Salar de Maricunga are deemed Exploitation Concessions
rather than Exploration Concessions. Currently neither Li3 nor its subsidiaries have
sufficient authority (or permits) to exploit lithium in Chile. The Chilean Mining Code
establishes the reserve of lithium to the State of Chile and expressly provides that the
exploration or exploitation of non-concessible substances (including lithium) can be
performed only directly by the State of Chile, or its companies, or by means of
administrative concessions or special operation contracts, fulfilling the requirements and
conditions set forth by the President of the Republic of Chile for each case. Chile has
announced its intention to increase the exploitation of lithium, and it may seek to amend
the law to allow exploitation by private enterprises. Amendments to the existing law
require a 2/3 majority in the Chilean Congress for approval. Chile may alternatively begin
granting operating contracts and this course of action has been proposed by the
Government of Chile. It is anticipated that public calls for concession agreements will be
issued by Q4, 2012, with the award to contracts early in 2013. This would permit new
entrants into the Chilean lithium industry. It is Li3s intention to apply for such
concessions at the appropriate time.


Page 25-1
25 INTERPRETATION AND CONCLUSIONS
Region of northern Chile at an elevation of approximately 3,800 masl. The property
northeast section of the Salar de Maricunga.

The Maricunga basin comprises a large drainage basin with an area of approximating
2,200 km
2
. It is structurally controlled to the west by mountains which have been raised
by inverse faults that expose a basement sequence ranging in age from Upper
Paleozoic to Lower Tertiary. To the southeast, the basin limit coincides with the Chilean-
Argentine frontier, which is defined by a line of volcanic complexes with elevations up to
6,749 m (Nevada Tres Cruces) and a range of ages between 26 Ma and 6 Ma. Some of
them are associated with the characteristically auriferous mineralization of the Maricunga
Belt. The eastern limit of the Basin is marked by the Cordillero Claudio Gay, a North-
South trending mountain chain resting on a basement of Middle to Upper Paleozoic
rocks and exposing deformed volcanoclastic sequences of Upper Oligocene to Lower
Miocene rocks which represent remnants of the volcanic arc preserved on the margins of
the Maricunga basin.

Salar de Maricunga is located in the northern part of the Maricunga basin and covers
some 140 km. The Salar is surrounded by alluvial deposits on the north, east and south,
and by volcanic deposits on the west.

The Salar itself is in-filled with alternating sequences of evaporates and clastic
sediments. Results of drilling carried out on the Li3 property indicate the presence of an
upper mixed halite sequence that consists of massive halite beds and halite mixed with
clay and silt-sized sediments with a combined thickness from three to 66 m. This upper
zone is underlain by a sequence of silt and clays that are inter-bedded with coarser
grained sands, gravels, conglomerates, and volcanic ashes. The deepest hole drilled
on the property to 192 m did not insect bedrock.

Results of drainable porosity (specific yield) testing carried out by Daniel B Stephens
Laboratory in the USA indicate that the upper halite mix zone has an average drainable
porosity of 3.4 percent, the sand mix units have an average drainable porosity of 6.1 and


Page 25-2
the silt clay mixed layers 1.2 percent. Results of six pumping tests carried out on the
upper halite mix zone indicate average specific yield values of 20 percent and an
average hydraulic conductivity of 89 m/d, indicative of permeable conditions in the upper
brine aquifer.

Salar de Maricunga is classified as a mixed type salar of the Na-Cl-Ca/SO4 system. The
brines from Maricunga are solutions saturated in sodium chloride with total dissolved
solids (TDS) of 26% (316 g/L) as an average, although in most areas exceed 27%. The
average density is 1.200 g/cm
3
. The other components present in these brines, which
constitute an aqueous complex system and exist also in other natural brines in
Argentina, Bolivia and Chile are the following: K, Li, Mg, Ca, SO
4,
HCO
3
and B, which
below pH 7 exists predominantly as un-dissociated H
3
BO
3
strontium (mean of 290 mg/L) also have been detected by ICP in the Maricunga brine.
Table 25.1 provides an overview of the key components and ratios for the Maricunga
brine.
Table 25.1: Average values (g/L) of key components and ratios for Maricunga brine
K Li Mg Ca SO4 B Mg/Li K/Li (SO4+2B)/(Ca+Mg)
8.97 1.25 8.28 12.42 0.72 0.61 6.63 7.18 0.184

The objectives of the 2011 drilling campaign were to carry out drilling on a specified grid
to allow the estimation of measured in-situ brine resources over the Li3 mineral claims
in Salar de Maricunga according to standards set out in NI 43-101. The drilling method
needed to allow for the collection of continuous core from which undisturbed samples
at specified depth intervals could be prepared for laboratory porosity analyses and for
the collection of depth-representative brine samples at specified depth intervals without
possibility of contamination by drilling fluids.

Six sonic boreholes were completed to a depth of 150 m. Undisturbed samples were
collected from the sonic core at three meter intervals for porosity analyses (318
samples). Brine samples were collected during the sonic drilling at three meter intervals
for chemistry analyses (431 primary main samples and 192 QA/QC samples). All sonic
boreholes were completed as observation wells on completion of drilling.


Page 25-3
samples for geologic logging, brine samples for chemistry analyses and airlift data to
assess relative aquifer permeability. The RC boreholes were completed as observations
wells for use during future pumping tests. Two test production wells were installed to a
total depth of 150 m each for future pumping trials.

A seismic tomography survey was carried out (23 line km) to help define basin lithology
and basin geometry. Six test trenches were completed to a depth of 3m to carry out
shallow pumping trials. 24 hour pumping tests were carried out in each trench.

Evaporation test work was initiated on the Maricunga brine at the University of
Antofagasta to evaluate the suitability of conventional brine processing techniques. Test
work was also initiated by Li3s strategic partners to evaluate the application of
proprietary technology on the recovery of lithium. This test work will continue throughout
2012 and 2013.

Table 25.2 summarizes the resource estimate prepared for the Li3 mineral claims in
Salar de Maricunga. It is in the opinion of the authors that the brine chemistry and
porosity data sets developed for the project are adequate and appropriate to carry out
such resource estimates. Based on drilling and exploration results of the 2011 campaign
the brine deposit remains open in all directions beyond the boundaries of the Li3 claims
and at depth.

Lithium Potassium
Area (km
2
) 14.38 7.06 14.38 7.06
Depth interval (m) 0-150 150-180 0-150 150-180
Aquifer volume (km
3
) 2.157 0.212 2.157 0.212
Avg grade (g/m
3
) 50 50 360 360
Potassium (t) 776,250 76,320

Notes:
Frits Reidel, CPG.



Page 25-4
574,064 56,368
1,482,638 145,771

To the best of the authors knowledge, there are no environmental, permitting, title, legal,
technical, socio-economic, marketing, taxation, political or other factors which could
materially affect the resource estimate that have not already been disclosed in this
report.

test trenches indicate that future brine production can be achieved through a
combination of production wells and open trenches. The analyses of brine chemistry
indicate that the brine is amenable to lithium and potash recovery through conventional
technology. It is believed that through the application of proprietary technology
developed by Li3 strategic partners lithium recovery from the Maricunga brine can be
significantly enhanced and may range from 45 percent to greater than 70 percent. Pilot
scale test work will be initiated this year on the project site to further test lithium
recoveries using this technology.

The exploration stage of the Li3 Maricunga project is being completed. Based on the
results of the resource evaluation herein, the authors recommend that the Project is
taken forward into the (pre)feasibility stage including the elaboration of an Environmental
Impact Assessment (EIA) and a Definitive Feasibility Study (DFS). However, there are
no guarantees that the Project EIA will be approved by the Chilean authorities and that
the Project will reach the production stage.


Page 26-1
26 RECOMMENDATIONS
It is the recommendation of the authors that a full feasibility study be completed for the
project. This work needs to include:

Initiate pilot scale testing for the recovery of lithium and potash in the Salar.

Carry out long-term pumping test on production wells P1 and P2 and develop a
three-dimensional numerical groundwater flow model to assess the long-term
behaviour of the brine aquifer and the effects of brine abstraction on the
Maricunga watershed.

Complete all environmental permitting for the project.

Finalize the selection of the site for the project processing facilities.

Complete a feasibility-level design for the project infrastructure.

It is further recommended that the extent of the current claim holdings be expanded to
facilitate further project development.

A two-phase program of work is proposed to accomplish the recommendations noted
above. The proposed budget for the work is detailed in Table 26.1. The Phase 1
investigation will involve pilot scale testing of proprietary and conventional process
technologies. Based upon the results of and successful completion of Phase 1 work, the
optimum process technology will be selected and further developed and tested during
Phase 2. The Phase 2 work program is contingent upon the successful completion of
Phase 1


Page 26-2
Table 26.1: Recommended budget
Phase 1: Preliminary Design & Testing
Item Cost (USD)
Environmental baseline studies 400,000
Salar site facility development 820,000
Laboratory and pilot plant testing 980,000
Subtotal Phase 1 2,200,000
Phase 2: Demonstration & Engineering
Final environmental studies and permitting 905,000
Process demonstration test facilities 1,900,000
Detailed process engineering 1,245,000
Subtotal Phase 2 4,050,000

Total Phase 1 and 2 6,250,000


Page 27-1
27 REFERENCES
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Marte, Kinross Gold Corporation
Bobst, A.L., Lowenstein, T.K., Jordan, T.E., Godfrey, L.V., Ku, T.L. and Luo, S. 2001. A
106 ka paleoclimate record from drill core of the Salar de Atacama, northern
Chile. Palaeogeography, Palaeoclimatology, Palaeoecology, 173: 21-42.
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Wiley & Sons, Inc., New York, USA.
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and geochemical signatures in a Neogene forearc evaporitic basin: the Salar
Grande (Central Andes of Chile). Palaeogeography, Palaeoclimatology,
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de Silva, S.L., Zandt, G., Trumball, R., Viramonte, J.G., Salas, G. and Jimnez, N. 2006.
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Andes: a thermomechanical perspective. In: Troise, C., De Natale, G. and
Kilburn, C.R.J. (eds) Mechanisms of Activity and Unrest at Large Calderas,
Geological Society, London, Special Publication No 269: 47-63.
Deutsch, C. V., and A. G. Journel (1998), GSLIB: geostatistical software library and
user's guide. Second edition.
Direccin General de Aguas, (DGA) 1987. Balance Hdrico de Chile.
DGA, 2006, Anlisis de la Situacin Hidrolgica e Hidrogeolgica de la Cuenca del Salar
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Page 28-1
28 DATE AND SIGNATURE PAGE
This report titled Technical Report on the Maricunga Lithium Project, Region III, Chile,
dated April 17, 2012 was prepared and signed by the following authors:

(Signed & Sealed) Donald H. Hains

Dated at Toronto, ON Donald H. Hains, P. Geo.
[insert signing date] Senior Geologist

(Signed & Sealed) Frederik Reidel

Dated at Santiago, Chile Frederik Reidel, CPG
[insert signing date] Consulting Hydrogeologist


Page 29-1
29 CERTIFICATE OF QUALIFIED PERSON
DONALD H. HAINS
I, Donald H. Hains, P. Geo., as an author of this report entitled Salar de Maricunga
Lithium Project, Region III, Chile prepared for Li3 Energy Inc. dated April 17, 2012 do
hereby certify that:

1. I am President of Hains Engineering Company Limited with office at Suite 515,
22755 Lakeshore Blvd West, Toronto, Ont. M8V 3Y3

2. I am a graduate of Queens University, Kingston, Ont. in 1974 with a Hons. BA
(Chemistry).

3. I am a graduate of Dalhousie University, Halifax, N.S. in .1976 with an MBA.

4. I am registered as a Professional Geoscientist in the Province of Ontario (Reg.
#0494).. I have worked as geologist for a total of 25 since my graduation. My
relevant experience for the purpose of the Technical Report is:
Due diligence report on Salar de Maricunga, 2011
Due diligence report on Salar de Pozuelos, 2009
Due diligence investigations and reports on lithium brine projects on Salar de
Hombre Muerto, Salar de Positos and Salar Centenario, 2009, 2010
Due diligence investigations and reports on brine projects in Peru, 2009
Due diligence report on various brine projects in China, 2008
Principal author, CIM Best Practice Guidelines for Reporting Mineral Resources
and Mineral Reserves for Brine Projects (in draft for approval)

5. I have read the definition of "qualified person" set out in National Instrument 43-101
(NI 43-101) and certify that by reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work experience, I fulfill the
requirements to be a "qualified person" for the purposes of NI 43-101.

6. I have visited the Salar de Maricunga project on numerous occasions throughout
2010 and 2011.

7. I am responsible for overall preparation of this report.

8. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.

9. I have read NI 43-101, and the Technical Report has been prepared in compliance
with NI 43-101 and Form 43-101F1.

10. To the best of my knowledge, information, and belief, the Technical Report contains
all scientific and technical information that is required to be disclosed to make the
technical report not misleading.

Dated this 17
th
day of April, 2012

Donald H. Hains,Geo


Page 29-2
FREDERIK REIDEL
I, Frederik Reidel, CPG, as an author of this report entitled Salar de Maricunga Lithium
Project, Region III, Chile prepared for Li3 Energy Inc. dated April 17, 2012 do hereby
certify that:

1. I am an independent consulting hydrogeologist residing at:
Los Refugios 19000, P32
Santiago, Chile.

2. I am a graduate of New Mexico Institute of Mining and Technology with a Bachelors
of Science Degree in Geophysics, 1986

3. I am registered a Certified Professional Geologist (#11454) with the American
Institute of Professional Geologists

4. I have worked as hydrogeologist for a total of 25 years since my graduation. My
relevant experience for the purpose of the Technical Report is:
Evaluation of lithium and potash resources in Salar de Olaroz for Orocobre Ltd. in
support of the projects DFS and NI 43-101 Technical Report (2010-2011)
Evaluation of lithium and potash resources in Salar de Cauchari for Lithium
Americas Corporation; NI 43-101 Technical Report preparation; member of the
companys Technical Advisory Panel (2009-2010)
Evaluation of brine resources in Salar de Hombre Muerto for FMC (1992-1993)
Consulting hydrogeologist in the evaluation and development of groundwater
resources for international mining companies in North- and South America.(1989-
2012).

5. I have read the definition of "qualified person" set out in National Instrument 43-101
(NI 43-101) and certify that by reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work experience, I fulfill the
requirements to be a "qualified person" for the purposes of NI 43-101.

6. I have visited the Salar de Maricunga project on numerous occasions throughout
2011 and 2012.

7. I am responsible for the overall preparation of this report.

8. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.

9. I have read NI 43-101, and the Technical Report has been prepared in compliance
with NI 43-101 and Form 43-101F1.

10. To the best of my knowledge, information, and belief, the Technical Report contains
all scientific and technical information that is required to be disclosed to make the
technical report not misleading.

Dated this 17
th
day of April, 2012

Frederik Reidel, CPG


Page 30-1
30 APPENDICES

APPENDIX 1

COMPOSITE LOGS FOR SONIC BOREHOLES C1-C6

AND

RC BOREHOLES P1-P3


Page 30-2
Sonic borehole C1 composite log


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Page 30-8
RC borehole P1 composite log


Page 30-9


Page 30-10


Page 30-11
RC borehole P3 composite log (continued)

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TECHNICAL REPORT ON THE

MARICUNGA LITHIUM PROJECT

) at 25C and saturated in sodium chloride (equilibrium data in

at 25C; lithium associated to magnesium

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