Pursuit sets out two routes to 17,500tpa lithium production at Rio Grande Sur

• Reassessment lifts probable ore reserve 250% to 438,000 tonnes of lithium carbonate equivalent
• Staged development would lift annual capacity from 5,000 to 17,500 tonnes of lithium carbonate equivalent
• Pumping tests and customer qualification will enable assessment of both routes in the definitive feasibility study

Special Report: Pursuit Minerals has outlined a staged expansion at its Rio Grande Sur lithium project in Argentina, with options to produce battery-grade lithium carbonate or technical-grade lithium chloride.

The company assessed four scenarios for its wholly owned Salta project in a pre-feasibility study addendum, completed in conjunction with independent consultants Andes Exploration S.A.S., Beyond Lithium LLC and IMEC Ingeniería 360.

The original 5,000tpa carbonate plan remains the base case. The expansion cases model initial production in 2030 and a second stage starting in 2036, subject to studies, permits, funding and a final investment decision.

The reassessment also produced an increase in the JORC probable ore reserve, rising from 125,000 to 438,000 tonnes of lithium carbonate equivalent (LCE). 

The study draws the reserve entirely from indicated resources and uses no inferred material in its production targets or financial forecasts.

PUR CEO Aaron Revelle said the addendum represents a major advancement for the project, establishing it as one of the most compelling emerging lithium developments.

“Increasing our probable ore reserve by approximately 250% to 438,000 tonnes LCE has fundamentally transformed the scale of the project, supporting a staged expansion to 17,500 tonnes per annum and creating the potential for a globally significant, long-life lithium operation,” he said.

Carbonate leads on value as chloride cuts capital

The expanded carbonate route returns a modelled post-tax net present value of US$1.09bn at a 7.03% discount rate and a 26.2% internal rate of return. 

Over the 25-year operating schedule, the carbonate route is predicted to generate US$9.3bn in revenue, US$6.8bn in EBITDA and about US$4.2bn in project free cash flow before debt service.

The chloride route returns a modelled US$951m post-tax NPV at the same discount rate and a 27.1% IRR. 

The study puts Stage 2 operating costs at US$3,880/t LCE and combined capital intensity at US$24,737 per tonne of annual LCE capacity, the lowest of the two combined development routes.

Both routes share brine extraction, evaporation and purification infrastructure before the final processing step. The updated wellfield design expands from six wells to 15.

“The alternative lithium chloride pathway offers further commercial flexibility, with Stage 2 operating costs of just US$3,880 per tonne LCE,” Revelle said.

“Importantly, sensitivity analysis demonstrates positive project economics at lithium prices 30% below our long-term reference price, highlighting the strength of the project across different market conditions.”

Pursuit estimates combined initial capital of US$570.7m for carbonate and US$432.9m for chloride before financing costs, including a 20% Stage 2 contingency. 

The model covers Stage 2 equity from Stage 1 cash flow at the reference price, alongside assumed debt and offtake finance. Pursuit has yet to secure binding financing.

“Our staged development strategy provides a capital-efficient pathway to production, with the potential to fund Stage 2 equity requirements from Stage 1 operating cash flow, minimising future shareholder dilution,” Revelle said.

“Combined with our expanded production wellfield and potential eligibility for Argentina’s RIGI investment incentives, Rio Grande Sur presents significant opportunities for further economic optimisation.”

Battery demand grows as lithium prices swing

Electric vehicles and grid batteries are the core demand drivers for lithium chemicals.

Australia’s Office of the Chief Economist expects global demand to grow by more than 11% annually to 2031, against about 7.3% supply growth. 

The Office expects near-term oversupply to ease towards balance by 2031, while the International Energy Agency’s 2026 outlook still points to a potential supply gap in 2035 based on the currently announced project pipeline. 

Supply disruptions in China and Zimbabwe and strong battery demand lifted prices in the first half of 2026. 

The Office of the Chief Economist forecasts lithium hydroxide easing from US$21,100/t in 2026 to US$16,200/t in 2031 in real terms as supply expands. 

Pursuit’s model uses a flat nominal carbonate price of US$27,300/t, blending five years of historical prices with five years of forecasts. 

All four scenarios retain positive NPVs at 30% below that assumption, equivalent to US$19,110/t for carbonate. 

Canaccord Genuity’s forecasts put carbonate at about US$29,300/t in 2027 and US$23,100/t by 2030. 

At Rio Grande Sur, Pursuit will feed completed drilling at Mito and Demasía into updated resource and groundwater models. 

The company also plans to undertake a 30-day pumping test at María Magdalena, further engineering and process trials, and talks with prospective chloride customers to test pricing and qualify the product.

“Importantly, the expanded ore reserve excludes our substantial inferred resource inventory, while recent drilling at Mito has returned exceptional lithium grades of up to 995 mg/L Li, demonstrating considerable potential for further resource growth,” Revelle said.

“We believe Rio Grande Sur has the scale, operating cost advantages and economic potential to become one of the world’s premier lithium brine developments. 

“With substantial opportunities for further resource expansion, production growth and project optimisation, the value creation potential extends well beyond the already exceptional economic outcomes demonstrated in this Addendum.”

This article was developed in collaboration with Pursuit Minerals, a Stockhead advertiser at the time of publishing. 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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