“I drink your milkshake” hey PP….haha. Yes, a very interesting development indeed.

I must confess to having pretty much written off Cauchari early as much competition. I know Olaroz has potential at depth but that is under an Upper Solar brine resource. Historically the high halite content of lithium Solares below 50m reduced porosity significantly making one focused on the upper brine proper, which at Cauchari to date had a teasingly spotty but sub-par chemistry/brine/porosity distribution. This was confirmed by drilling which shows some pretty ordinary upper brine results by Lithium Americas BUT if the drilling is to be believed potentially great resource at depth.

I have some initial concerns about accurate sampling of aquifer intervals at depth using face sample RC drilling which can suck in water from up hole over extended depths as water pressure builds (ie exaggerate the true aquifer thickness). ORE has evidence of a more discreet aquifer at depth, adjacent but separate from Halite beds, but it is still early days. Anyway, assuming that the RC drilling is accurate and the brine aquifers prove to have reasonable porosity and transmisivity then LAT have an economic resource to work with I would think. Looking at the hole locations and results we can gain a bit more of a picture.

Firstly, the hole on LAT’s eastern side of Lake Olaroz proper (RC3) came up a duster. Fresh water as expected so we can write the eastern tenements off as any adjacent resource. LAT’s hole RC5 in the very southern part of Olaroz had minor aquifers in the top zone, then a thick zone of aquifer from 30m to 210m with “increasing grades with depth”. Given the 80m zone averaged 345mg/l Li and the bottom 484mg/l, the upper part of the aquifer would have been in the 200’s mg/l, which is roughly 25% of the resource grade from ORE at 800 mg/l. Basically confirms that the centre of the solar has the best grades and resource in the upper 50m with highest grades running in a NE-SW strike down through ORE’s tenements. Even the grades at depth in LAT’s hole RC5 is around half that of ORE’s resource so I don’t see it as short term start-up competition or even long term must have JV.

Basically, ORE has all the Upper resource area of consequence at Olaroz with plenty of room for development. The deeper aquifers certainly should extend into ORE’s tenements so resource upside coming our way early 2010. No need to deal into the LAT held Olaroz tenements for any significant consideration IMHO.

Secondly, the grade of deeper aquifers on ORE tenements should also be greater than hole RC5 at depth if the pattern of LAT’s drilling on Cauchari is to be repeated. Having run my eye over the results it appears that the more distinct Solare proper at northen Cauchari was targeted by holes RC4 and RC6 with the grades at depth of 650-850 mg/l reflecting the higher concentration of brine in the centre of the significant basin facies development. That is to say, higher grades of lithium occur in the centre of a solar both at surface and depth compared to the periphery. This theory is given more support by hole RC7 in the narrow “neck” separating Olaroz from Cauchari which returned a thick aquifer but at lower grades than holes under northern Cauchari solar proper. The grades in RC7 were similar to the south-eastern Olaroz hole RC5 though a bit higher at depth.

In summary then;

ORE should expect thick? sequences of high grade, low Mg:Li ratio brine at depth under the Upper resource. Olaroz is pretty much all ORE’s for development and the high grade resource increase at depth will further increase the attractiveness of what is building as a world class deposit.

LAT has the makings of another significant resource at depth over northern Cauchari, assuming porosity etc is all good, with upside in the southern Cauchari solare. The ORE tenements at Cauchari does indeed offer ORE some upside while presenting potential development concern for LAT where the two companies may “drink each others milkshakes”. Additional substantial resources at depth and along strike at Cauchari certainly make a combined Olaroz-Cauchari brine deposit one to taken very seriously by the big boys…. maybe even rivaling Atacama! Combined potential for very large, long life production.

On the downside, this discovery by LAT doesn’t actually do ORE any good in the short term and in fact might be additional competition we don’t need. Always a better bargaining position when you’re the only one to have a deposit others want, not one of a number of good developments. ORE has a large resource already and any depth extension is almost superfluous in the medium term but now we may have an attractive neighbour also flirting with our suitors.

goodluck