Due to differences in drill-hole depths the resource has been divided into a northern and a southern resource area. The resource has been estimated using a conservative approach limited by the depth of drilling, with the estimate extending to 170 m depth in the northern area of the properties and 50 m depth in the southern area.
The resource boundaries are constrained by the company's property holdings, drilling results and geophysical survey interpretation. No internal cut-off boundaries have been used because both the Company and Competent Person/Qualified person consider it is inappropriate to apply them in a fluid resource where extraction will cause mixing. No external cut off was defined for the resource, due to the limited drilling and pit sampling completed on the project to date. The property boundaries were used as the western, northern and southern boundaries to the brine resource. Hole CAU006R was excluded from the resource due to a different drilling and sampling methodology and sub 100 mg/l Li composite sample results.
Based on available geophysics, geology and geochemistry it has been is possible to define an exploration target beneath the resource outlined in Table 1. It must be stressed that an exploration target is not a mineral resource. The potential quantity and grade of the exploration target is conceptual in nature, and there has been insufficient exploration to define a Mineral Resource in the volume where the Exploration Target is outlined. It is uncertain if further exploration drilling will result in the determination of a Mineral Resource in this volume, however available information suggest this is likely.
The contained lithium in the exploration target (combining values for the northern and southern areas - see Table 2) ranges from the Upper Assumption case of 2.6 mt of lithium carbonate and 9.2 mt of potash to the Lower Assumption case of 0.2 mt of lithium carbonate and 0.5 mt of potash.
It must be stressed the exploration target is based on a series of assumptions and future drilling is required to determine the brine grade and formation porosity (Sy) values to establish whether a resource can be defined.
To view Table 2, please visit the following link: http://media3.marketwire.com/docs/850306_table_2.pdf.
The brine body has attractive chemistry, with a low magnesium to lithium ratio (2.8) in the five diamond holes and a high potassium to lithium ratio (10). The sulphate to lithium ratio averages 61 in diamond holes CAU001D-4D, rising to 114 in hole CAU005D in the eastern part of the resource area. Initial evaluation of the brine chemistry suggests high recoveries of lithium could be expected using a process route similar to that at the adjacent Olaroz project.
Considering the similarities and close proximity of the Cauchari and Olaroz projects, there are compelling synergies including the expected use of shared infrastructure and processing plants, and it is likely that any future development of the Cauchari brines would use the Olaroz facilities. Consequently, from this point forward the company considers the Cauchari project and its brine body part of the larger Olaroz project. In the future, resources for Cauchari will be reported as a discrete part of the overall Olaroz project resources.
Further technical information on the Cauchari maiden resource estimate is available in the Company's 22 October, 2012 announcement.
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