The SG brine is a good brine but there were some factors counting against development.
The SG resource was a bit small for stand alone development. The resource was quite shallow and it seemed like there was limited upside for exploration. Brine ponds and then trucking to Olaroz had seemed the most likely option - but then trucking brine is not going to be cheap, especially if evaporating to a relatively low concentration as is done at Olaroz. Complicating things a little , the resource was spread over two provinces - about 85% in Salta and the balance in Jujuy. It was crying out for aggregation, and the fact that it was left out of the AAL deal was a tip off that something like this was coming
Topping it off, there were a couple of tricky issues. As pj has pointed out before, there is lot more anti mining noise from the local community at SG. And, in the past, others have commented that SG is more prone to flooding.
For LSC though, this acquisition makes sense. Through their subsidiary Lithium S, they are
partnered with Dajin in the adjoining acreage at SG since last year. Dajin were hoping for
brine at depth but haven't had drilling to support this - maybe a shallow resource is all they will have as well. I think LSC also had some
SG acreage in their own right. Adding the ORE acreage (and with AALs small acreage thrown in for good measure) makes for a resource that is much more likely to support development. It is their only asset of note and would certainly be their focus for development
Whether a development happens or not remains to be seen - I always run a mile when I see a
BVI connection. The arrangements with Enirgi are also a bit of a red flag. Enirgi are proposing a regional processing facility using their mysterious direct extraction technology. Talk of brine trucks running one hour up the road for direct processing (ie no pre-concentration in ponds seems unlikely to me)
In the meantime though, the deal has aggregated these assets in to something more feasible - if development goes ahead, there is a royalty. If not, then someone else can pick up the aggregated assets in the future with the royalty tag still attached...
To get 7m USD cash and some additional brine adjacent to the infrastructure at Olaroz seems like a good deal to me.
