Neo Lithium Corp. announced that it has successfully completed and tested the pilot plant built by the Instituto de Investigaciones Tecnologicas from Universidad de Concepcion, Chile and has shipped the Plant to the warehouse in Fiambala, Catamarca province, Argentina. The Company estimates that it will take 45 days for the Plant to be shipped, clear customs, and be reassembled and operational. The Plant was tested with artificial brine in Chile and the Company now is concentrating approximately 4% lithium brine in its pilot evaporation ponds to start production of lithium carbonate at the Plant. Currently the annual capacity of the pilot ponds is over 500 tons of approximate 4% lithium brine per year.

“I am pleased with the progress made and our ability to ship and commission the Plant during the first quarter which puts us on track with our objectives,” said Gabriel Pindar, Director and COO of Neo Lithium. “Management hopes the proposed prefeasibility study will support that the plant can produce battery grade lithium at one of the most competitive cash cost of the market.”

2019 Drilling Campaign

The Company announced that it has started drilling the northern high-grade zone. The first well is projected to be 300 m deep. As previously reported and filed in the Company’s 43-101 technical report dated September 4, 2018, this zone contains 746,000 tonnes of lithium carbonate in the measured and indicated resource categories at a grade of 1,007 mg/l lithium plus 186,000 tonnes of lithium carbonate in the inferred resource category at a grade of 1,240 mg/L lithium. This high-grade zone constitutes only 14% of the current resource, however it has been drilled only to 100 m in depth and contains the highest grade of the entire project.  The current drilling program anticipates the depth of investigation to be at least 3 times in orders of magnitude. The Company believes that the high-grade zone extends deeper, since in the rest of the basin and the brine continues all the way to 600 m. After drilling, the well will be converted into a production well with a large diameter (12 inches) and metal screen.

“Testing the deeper portion of the northern high-grade zone proved difficult last season because the sediments consist of coarse gravel and sand,” said Dr. Waldo Perez, President and CEO of Neo Lithium Corp. “For this year’s drilling campaign, we are using a new rig with superior capabilities and technology, and we are confident we will test the deeper portion of the basin under the high-grade zone this time. Increasing the resource in the high-grade zone would have a significant impact in the pond requirement and therefore may have a positive effect on the capex on the project.”

Environmental Impact Assessment update

The environmental impact assessment report (“EIA”) is almost completed and will be submitted to the regulatory authorities in February 2019.  The Company expects approval to be granted in the first half of 2019 given the authorities have been kept up-to-date on progress at the 3Q Project. Approval of the EIA is the final approval required to permit construction of a commercial scale mine.