Kuska Lithium Project, Chile

Kuska Lithium Project, formerly known as the Ollagüe Project, is located at the Salar de Ollagüe, Antofagasta region in northern Chile.

The project is fully owned by Canada-based mining company Wealth Minerals.

Geophysical surveys at Kuska Salar have identified conductive zones that were interpreted as a porous medium with high-salinity fluids at depth, which are similar to the Atacama Salar, one of the largest producing lithium brine deposits.

Wealth Minerals announced a positive Preliminary Economic Assessment (PEA) for the Kuska project in January 2024.

According to the PEA report, it has a Pre-tax Net Present Value (NPV) (10% discount) of $1.65bn and a project internal rate of return (IRR) of 33%.

Kuska Project Background

The Kuska project comprises an 8,000-hectare area (ha) located in northern Chile, Region II, near the Bolivia border.

The site is around 200km due north of Atacama.

A drilling campaign conducted on the project area in 2018 found lithium grades up to 480 Li milligrams per litre (mg/l). Previous surface sampling work also returned lithium grades as high as 1,140 Li mg/l.

Wealth Minerals had conducted Magneto-Telluric (MT) and coincident loop Transient Electromagnetic (TEM) surveys at the property identifying potentially lithium-bearing brines at depth.

In May 2022, Wealth Minerals signed an agreement with Lithium Chile to acquire 1,600 ha area adjacent and near to its existing licence position in the Ollagüe basin.

Kuska Lithium Reserves

The maiden resource estimate for the Kuska lithium project was announced in January 2023.

It estimates that the project contains 741,000 tonnes of Lithium Carbonate Equivalent (LCE) in indicated resources grading 175 mg/l and 701,000 tonnes of LCE inferred resources grading 185 mg/l.

The additional 2,500 ha of mineral concessions adjacent to the concessions, acquired in 2022, have not been investigated for lithium.

The resource estimate is based on Wealth Minerals’ geophysical survey and the 2022 drill programme.

The programme comprised four vertical holes for a total of 1,111m in length with depths varying from 194m to 350m.

All the drill holes found brine with the top of the brine level encountered at 150m to 200m below the surface.

Kuska Project Development

According to the PEA, the Kuska project can deliver a 20,000 metric tonnes per annum (tpa) Lithium carbonate Equivalent (LCE) output with an estimated Life of Mine (LOM) of 20 years.

The company plans to utilise a mature Direct Lithium Extraction (DLE) technology to convert lithium-bearing brine into highly pure lithium chloride concentrate and refining lithium-rich eluate into high-purity lithium carbonate (>99.5% LC).

The project operations are planned to be executed in two phases.

The company mulls building a mining operation and plant with a capacity of 10,000 tpa LCE in the initial stage. The production capacity will be doubled in two years with a second production module for a total of 20,000 tpa LCE.

The project development plan incorporates the use of renewable energy options, as well as focuses on water recycling and waste treatment facilities to reduce the environmental impact.

Mining Method

The Kuska project mining operation will include a well field equipped with lithium-rich brine pumping capacity and a re-injection feed system to pump the Li-depleted brine into the salar.

The operations will seek to ensure minimum environmental impact on the salar and preserve its integrity and water equilibrium.

Wealth Minerals also intends to utilise solar and geothermal energy sources to power the production plant and associated infrastructure.

Contractors Involved

The PEA of the Kuska project was prepared by engineering services company DRA Global from its Toronto, Canada office.

Resource experts from Montgomery & Associates and other third-party consultants also supported the preparation of the report.

Terraservice, a Chile-based company, was the drilling contractor for a corehole exploration hole programme.

Wealth Minerals entered into a cooperation and development agreement with thyssenkrupp Mining Technologies (which was later acquired by FLSmidth) in August 2022, for the development of the Kuska project.

The scope of collaboration will include selecting the most beneficial and environmentally sustainable processing technology for lithium extraction and purification; developing the project from the exploration stage through to commercial scale production capacity; focus on green mining among others.