Ann: Maricunga Lithium Brine Project Status, page-34

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Morequestions than answers at Lithium Power International

More questions thananswers in Lithium Power International’s Monday response to Street Talk’sreport on the situation in Chile, where the company is exploring in themineral-rich region known as the Lithium Triangle.

To recap, theASX-listed company is working on a project on the Salar de Maricunga in Chile’snorth, which analysts expect will be a major source of lithium. EdisonInvestment Research, which specialises in small caps, expects the project togive Lithium Power a valuation of around $1.8 billion.

The lithium industryis booming in Chile, where Lithium Power International has a project. AP

The only hurdle isChile’s new lithium policy, which is exceedingly complicated and suggests somelicences first handed out before 1979 – like the one held by Lithium Power –may not permit the mining of lithium, at worst, and a forced joint venture witha state agency, at best.

On Monday, StreetTalk reported that a local publication, El Mercurio de Antofagasta, hadreported that Lithium Power’s licences did not include the right to minelithium. That was the view of a Chilean lawyer, Carlos Claussen, who said that“the most harmonious and logical interpretation” of the new strategy was thatthe company could not mine lithium.

Still, Lithium Powertold shareholders on Monday that it had provided plenty of information aboutthe legal status of the Maricunga project to investors in an update on April24. “The standing of its concessions and permitting according to Chilean law issolid,” the company added. Despite this apparent certainty, Lithium Powerdisclosed it had consulted no fewer than six lawyers, who “confirmed theaptitude” of their licences.

And while thecompany did provide a brief update to investors in April, details of Chile’slithium policy were at the time scarce. The government only released a full33-page document that outlined the plan in late June. There had been no wordfrom Lithium Power since then – until Monday.

That policy, for thebenefit of shareholders, includes this statement: “In the remaining salt flats,there are no lithium properties, so any exploration or exploitation projectwith private participation requires a [special lithium operation contract knownas a CEOL].

“Of these, in theSalar de Maricunga, where there are currently various companies interested inthe exploitation of lithium, the state has commissioned Codelco to find a solutionthat enables the development of projects.”