Wealth Minerals sketching out new chapter for Chilean lithium

Canada's Wealth Minerals has progressed with community engagement involving a joint venture in preparation for developing the Kuska lithium project in Chile's Ollagüe salt flat.

But before development can move forward further, the company requires a special lithium operating contract (Ceol). The government is expected to announce more winners of Ceols in March. 

Kuska is projected to produce 20,000t/y of lithium carbonate equivalent through direct lithium extraction (DLE).

Wealth Minerals is also awaiting a decision regarding its Yapuckuta property in the Atacama salt flat, located in an area that has been designated strategic, and where the State has exclusive extraction rights.

BNamericas speaks with Francisco Lepeley, the CEO of Wealth Minerals Chile, about both projects.

This is the first of a two-part interview. Part two will focus on market perspectives and the national lithium strategy and will be published in the coming days.

BNamericas: How advanced are Wealth Minerals' lithium projects?

Lepeley: Yapuckuta is a 52,000ha mining property in the northern part of the Atacama salt flat, while the 10,200ha Kuska basin is located in the Ollagüe salt flat.

We would have liked to move faster, but we aligned our pace with the national lithium strategy launched by the government in 2023. Under this strategy, the Atacama and Maricunga salt flats were designated as strategic areas, where the state – through mining companies Codelco and Enami – will hold a majority stake [50%+1].

The Ollagüe salt flat, however, falls into a different category, where private companies are allowed to develop projects under specific regulations.

BNamericas: So, does Kuska have a higher chance of obtaining a Ceol?

Lepeley: Our project in the Atacama salt flat is in a gray area because, based on historical records, the property could potentially be considered outside the salt flat. If this interpretation prevails, it would no longer be classified as a strategic area, opening up the possibility of developing it under a Ceol.

Otherwise, we would need to seek a partnership with Codelco. We're currently awaiting a decision.

Ollagüe, on the other hand, is on the list of salt flats where private companies can develop projects through a Ceol. The government’s window for applying under a simplified mechanism closed on January 31. We're evaluating whether we meet the conditions. If not, we will explore other avenues to obtain a Ceol.

BNamericas: What stage is Kuska at?

Lepeley: It's our most advanced project. Since arriving in 2018, we've built a strong relationship with the local indigenous community. We recently signed a second agreement – the first one granted us permission to begin exploration campaigns, conduct surface-level geophysics work and carry out drilling surveys.

With this, we completed resource characterization, and in early 2024, we published a preliminary economic assessment [PEA], which delivered promising results.

In the meantime, we continue technical work, but we would like greater regulatory certainty regarding the Ceol before committing further significant expenditures. Pre-feasibility and feasibility studies are costly.

BNamericas: What does the agreement with the Ollagüe community entail?

Lepeley: It’s an MOU that outlines the conditions for the community to gain ownership in the project. We will establish a Wealth Minerals subsidiary dedicated to Kuska, which will own the mining properties, along with other assets and studies.

The Quechua indigenous community of Ollagüe will become a shareholder with a non-dilutable 5% stake and the right to appoint a board member to ensure greater transparency and alignment between the parties.

BNamericas: What are the key benefits for each party involved?

Lepeley: We firmly believe this is the future of mining. Any mining activity affects the land, creating both positive and negative externalities. It is our responsibility to share the economic benefits – it's no longer enough to simply provide jobs.

Although the community will be a minority shareholder without voting rights, it will participate alongside us and be the first to receive information about major company decisions. We're also considering offering training in areas such as corporate governance.

BNamericas: Are other parties interested in developing projects in Ollagüe?

Lepeley: We hold the largest mining property in Ollagüe. Codelco follows with around 4,000ha, though they have told us they're not interested in developing a project, even though we've offered them a partnership.

At least two other entities own mining properties in the salt flat, but we're by far the most advanced in terms of technical work and community engagement. This gives us a significant advantage over other potential developers.

BNamericas: What's the average lithium concentration you've identified at Ollagüe?

Lepeley: We prepared a resource estimation report, certified by a company under Canadian standards, covering about 8,000ha – smaller than our current property. We estimate 1.4Mt of lithium carbonate equivalent, with an average grade of around 180mg/l.

BNamericas: Are you maintaining the planned US$749mn investment to develop Kuska?

Lepeley: Yes, we made that estimate in our PEA a year ago, so we should review whether certain costs have increased. The US$749mn covers all expenses, including exploration campaigns, permitting, pre-feasibility and feasibility studies, construction, equipment purchases and start-up costs.

However, we will refine this estimate during the pre-feasibility and feasibility stages, where we will have more accurate data and less variability in parameters.

BNamericas: Given that the national lithium strategy mandates the use of DLE technologies, have you started pilot tests?

Lepeley: We completed a study with engineering firm RDA Global, initially evaluating 14 manufacturers and narrowing it down to four.

In some cases, we conducted laboratory-scale pilot tests, which formed the basis for the technical study supporting our PEA. Even before the national lithium strategy required DLE, we had already committed to using it.

This decision stemmed from discussions with the local community, whose main concern is preserving the salt flat’s water levels. Unlike the Atacama salt flat, where evaporation ponds are used, this isn't an option here.

Currently, we're observing large-scale DLE implementations in Argentina before committing to a specific technology.

BNamericas: Will Kuska’s final product be lithium carbonate or hydroxide?

Lepeley: That decision is still open. For now, our PEA assumes the plant will produce lithium carbonate. However, some technologies could allow us to produce lithium hydroxide directly, so we will evaluate this further.

BNamericas: What infrastructure advantages does Kuska have, and what does its proximity to Bolivia imply?

Lepeley: Despite its high altitude and remote location – nearly 200km from Calama – Kuska has excellent access to a paved international highway with significant truck traffic.

In fact, a large amount of fuel is transported from Chile to Bolivia via this route. Additionally, there's a major train station on the Antofagasta-Bolivia rail line, which carries minerals and other goods.

BNamericas: Are you still open to new strategic partners to advance your lithium projects?

Lepeley: Yes, we would welcome a strategic partner who can contribute capital, expertise and integration into other production chains. We're in discussions with several entities, but many potential partners want greater certainty regarding the project’s progress before committing.