Patagonia Lithium Wins Well 9 Approval Clearing Path to Updated Resource
Key Takeaways
- Patagonia Lithium (ASX: PL3) has received regulatory approval from the Department of Mining Jujuy to drill Well 9 (JAM 26-09) at its Formentera project in Salar de Jama, Argentina.
- Well 9 is explicitly the last planned well before a comprehensive updated Mineral Resource Estimate is issued, making it the company's most immediate near-term catalyst.
- The current MRE stands at 551,400t LCE @ 294mg/L, but 536,600t LCE — 97% of the total — sits in the lower-confidence Inferred category; Well 9 is designed to close the gap between wells 1, 7 and 8 by up to 1.5km and drive upgrades to Indicated.
- The well location required specific regulatory permission due to a 500m exclusion zone near permanent lagoons and temporary water bodies from recent rainfall, with magnetotelluric geophysics confirming low resistivity zones directly beneath the planned drill site.
- Drilling is expected to commence approximately six days after PVC gravel insertion is finalised, with a BMR Gamma survey and 72-hour pump test completing first.
Well 9 approval puts Patagonia Lithium one step from updated resource estimate
Patagonia Lithium (ASX: PL3) has received regulatory approval from the Department of Mining Jujuy to drill well JAM 26-09 (Well 9) at its Formentera project in Salar de Jama, Argentina. The approval clears the path for the company’s final planned well before it issues a comprehensive updated Mineral Resource Estimate (MRE), with the existing resource standing at 551,400t LCE @ 294mg/L as of 14 July 2025.
The company also confirmed its latest capital raise has been completed, with all shares and options issued.
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Why Well 9 matters for the Formentera resource estimate
Formentera’s current MRE is heavily weighted toward Inferred. Of the 551,400t LCE total, 536,600t LCE @ 292mg/L sits in the Inferred category, with only 14,800t LCE @ 393mg/L classified as Indicated. Well 9 is designed to reduce the spacing between existing wells 1, 7 and 8 by up to 1.5km, which should allow a greater proportion of the resource to be upgraded to the higher-confidence Indicated category in the next MRE.
The well location sits between a lagoon and a depression, making it technically challenging. A 500m exclusion zone applies to drilling near permanent lagoons, and recent rainfall had created temporary water bodies in nearby depressions. Patagonia Lithium sought specific regulatory permission to drill at the selected location, which sits on the centre line of the company’s magnetotelluric (MT) geophysics survey, a survey that maps low resistivity zones. Low resistivity zones at this location, shown in the company’s MT geophysics work, underpin confidence in the well placement.
What happens before the drill bit turns
The drilling sequence at Well 9 follows several preparatory steps:
- PVC gravel insertion (being finalised at the time of announcement)
- BMR Gamma survey to determine well porosity
- 72-hour pump test to assess aquifer performance
- Drilling commences after the Gamma survey and pump test are completed (approximately six days combined)
- Comprehensive updated MRE to follow Well 9 completion
Formentera project snapshot and capital position
| Metric | Detail |
|---|---|
| Project | Formentera/Cilon, Salar de Jama, Jujuy Province, Argentina |
| Tenement area | 19,500 ha |
| Current MRE (total) | 551,400t LCE @ 294mg/L |
| Indicated component | 14,800t LCE @ 393mg/L |
| Inferred component | 536,600t LCE @ 292mg/L |
| Target drill depth (Well 9) | 600m |
| MRE release date | 14 July 2025 |
The company’s current capital structure is as follows:
- 327.7 million PL3 shares on issue
- 82.5 million quoted PL3OB options
- 6.5 million unquoted options
- 18.3 million unquoted performance rights
The latest capital raise has been completed and all shares and options issued. No raise amount was disclosed in the announcement.
Phillip Thomas, Executive Chairman
“Well 9 reduces the distance between wells 1, 7 and 8 which, given the horizontal orientation of the various sand and clay units, should improve our mineral resource estimate category as the domains have continuity over shorter distances. Drilling should start after the BMR Gamma and pump tests are completed that take approximately six days to complete.”
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Outlook: updated MRE is the next major catalyst
Well 9 is explicitly described by the company as the last well required before a comprehensive updated MRE is issued. With the regulatory hurdle cleared and preparatory work under way, the updated resource estimate is now the primary near-term catalyst for PL3 investors to watch.
The MT geophysics survey positioning gives additional technical confidence in the well location, with low resistivity zones at depth present directly beneath the planned drill site.
Beyond Formentera, Patagonia Lithium also holds the Tomas III lithium brine project in Salta Province and is exploring for ionic REE clays, Niobium, Antimony, and Lithium in pegmatites across 41,746 ha of concessions in Brazil. Those projects are not the focus of this current drilling activity, but they form part of the broader portfolio context for investors assessing the company.
For ongoing updates, investors can follow the company’s announcements at patagonialithium.com.au or the Executive Chairman blog at patagonialithium.com.au/ceo-blog-1.
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