Funding Crunch Looms as Patagonia Lithium Plans Major Drilling Push
Patagonia Lithium has reported a remarkable 319% increase in its lithium resource at its Argentine project, alongside plans for further drilling and a $2.68 million capital raise to fund ongoing exploration.
- Lithium resource estimate increased to 103,000 tonnes of lithium metal equivalent
- Specific yield and lithium concentration improved significantly
- Cilon well 5 drilling planned to enhance geological confidence
- Fully underwritten entitlement offer announced to raise AUD 2.68 million
- Exploration concessions in Brazil renewed with reconnaissance planned
Significant Resource Upgrade
Patagonia Lithium Limited (ASX – PL3) has delivered a substantial boost to its lithium mineral resource estimate at the Formentera/Cilon project in Argentina. The company announced an inferred and indicated resource of 103,000 tonnes of lithium metal equivalent, representing a 319% increase from its January 2025 estimate. This translates to approximately 551,000 tonnes of lithium carbonate equivalent (LCE), a key benchmark in the lithium market.
The upgrade follows completion of borehole magnetic resonance (BMR) surveys on wells 1, 3, and 4, which provided critical data to refine the resource model. Notably, the specific yield; a measure of extractable brine; jumped by 248% to 11.85%, while the average lithium concentration rose 11% to 294 ppm. These improvements suggest a more economically viable resource, although the company cautions that these remain mineral resources, not yet mineral reserves with demonstrated economic viability.
Next Steps in Exploration
To build on this momentum, Patagonia plans to drill Cilon well 5 to a depth of 600 meters as soon as a rig becomes available. The drill pad is already prepared, and the company intends to conduct further BMR surveys on this well to increase geological confidence and better define basement contacts. Additional geophysical investigations, including 2D seismic surveys and reprocessing of magnetotelluric data, are also underway to enhance understanding of the salar’s hydro-stratigraphy and faulting.
Meanwhile, environmental compliance remains on track, with the Mines Department of Jujuy completing a six-monthly review and signing off on drill hole rehabilitation at Formentera.
Brazilian Concessions and Corporate Update
Beyond Argentina, Patagonia has renewed all 25 exploration concessions across Minas Gerais, Goiás, and Mato Grosso in Brazil. Reconnaissance work is prioritized for the Goiás concessions, with particular interest in niobium and antimony presence, which could diversify the company’s resource portfolio.
Financially, Patagonia ended the quarter with a modest cash balance of $126,000, reflecting ongoing exploration expenditures. To support its activities, the company announced a fully underwritten entitlement offer to raise AUD 2.68 million, providing a clear funding pathway for continued operations and exploration programs.
Director fees and payments for exploration work by related entities were disclosed, maintaining transparency in corporate governance. The company retains a lean team focused on geology, administration, legal, and engineering functions.
Outlook
Patagonia Lithium’s recent resource upgrade and planned drilling program mark a pivotal phase in its development trajectory. While the resource remains at the inferred and indicated stage, the enhanced data quality and planned exploration activities position the company well to advance toward a pre-feasibility study and eventual resource conversion. The success of the entitlement offer will be critical to sustaining momentum and unlocking the full potential of its lithium assets in the lithium triangle.
Bottom Line?
Patagonia’s resource leap and funding plans set the stage for a critical drilling campaign that could reshape its lithium prospects.
Questions in the middle?
- Will the upcoming Cilon well 5 drilling confirm and expand the upgraded resource estimate?
- How will the company balance exploration expenditures with its tight cash position before entitlement offer proceeds?
- What potential does the Brazilian concessions portfolio hold for diversifying Patagonia’s resource base?
