Orocobre Announces Maiden Resource at the Cauchari

Orocobre Announces Maiden Resource at the Cauchari Lithium-Potash
BRISBANE, AUSTRALIA -- (Marketwire) -- 10/21/12 -- Orocobre Limited

--  An inferred resource has been estimated containing approximately 470,000
    tonnes lithium carbonate equivalent and 1.6 million tonnes of potash.
    Cauchari lies approximately 20km south of the proposed Olaroz processing
--  The maiden resource is based on five diamond holes in Orocobre's eastern
    Cauchari properties and is only to an average depth of 170m in the
    northern resource area and 50m in the southern resource area. 
--  Lithium and potassium mineralization was encountered to the base of
    drilling at 249m in hole CAU001D. An adjacent property owner, Lithium
    Americas Corp, drilled to 450m depth and therefore future Orocobre
    drilling is likely to substantially increase the maiden resource. 
--  An exploration target of between 0.2 million and 2.6 million tonnes of
    lithium carbonate equivalent and 0.5 million and 9.2 million tonnes of
    potash has been estimated beneath the maiden resource based on a range
    of porosity and grade possibilities to between 220m and 350m depth. 
--  Whilst lower grade than Olaroz, the brine chemistry is similar to that
    at Olaroz, with an attractive low Mg/Li ratio (2.8) and high K/Li ratio
    (10). Initial evaluation of the process route suggests the brine could
    be processed in an expanded Olaroz plant.

Orocobre Limited (the "Company" or "Orocobre") reports completion of
the maiden resource estimate at its 85% owned Cauchari Lithium-Potash
properties ("Cauchari") in Jujuy Province, Argentina. 
Murray Brooker, independent hydrogeologist, has estimated an inferred
resource in two adjoining areas of the salar, with a total 230
million cubic metres of brine at average grades of 380 mg/L lithium
and 3700 mg/L potassium. This is equivalent to 470,000 tonnes of
lithium carbonate and 1.6 million tonnes of potash (potassium
chloride) based on 5.32 tonnes of lithium carbonate being equivalent
to one tonne of lithium and 1.91 tonnes of potash being equivalent to
one tonne of potassium. Details are given in the table below. 
To view Table 1, please visit the following link:
Due to differences in drill hole depths the resource has been divided
into a northern and a southern resource area. The resource has been
estimated using a conservative approach limited by the depth of
drilling, with the estimate extending to 170 m depth in the northern
area of the properties and 50 m depth in the southern area.  
The resource boundaries are constrained by the company's property
holdings, drilling results and geophysical survey interpretation. No
internal cut-off boundaries have been used because both the Company
and Competent Person/Qualified person consider it is inappropriate to
apply them in a fluid resource where extraction will cause mixing. No
external cut off was defined for the resource, due to the limited
drilling and pit sampling completed on the project to date. The
property boundaries were used as the western, northern and southern
boundaries to the brine resource. Hole CAU006R was excluded from the
resource due to a different drilling and sampling methodology and sub
100 mg/l Li composite sample results. 
The brine body has attractive chemistry, with a low magnesium to
lithium ratio (2.8) in the five diamond holes and a high potassium to
lithium ratio (10). The sulphate to lithium ratio averages 61 in
diamond holes CAU001D-4D, rising to 114 in hole CAU005D in the
eastern part of the resource area. Initial evaluation of the brine
chemistry suggests high recoveries of lithium could be expected using
a process route similar to that at the adjacent Olaroz project.  
The Cauchari Project is located immediately south of the Company's
Olaroz lithium-potassium project (Figure 1), within the Province of
Jujuy, Argentina. From October to December 2011 the company drilled
five diamond and one rotary vertical drill holes in the Cauchari
properties, followed by chemical analyses of the brine and porosity
testing. This work provides the basis of the resource estimate, by
independent consulting hydrogeologist Murray Brooker, and other
conclusions presented in this announcement. 
Orocobre activities have concentrated on exploration and development
planning at the Olaroz salar project since 2008. At Olaroz the
company has completed a definitive feasibility study and is planning
to commence full-scale project construction by the end of October.
The Olaroz processing plant is planned to be constructed in the south
of the Olaroz properties, less than 20 km from the company's Cauchari
drill holes. Drilling and sampling activities at Cauchari, commencing
in late 2011, have confirmed the Cauchari salar has similar brine
chemistry to that at Olaroz.  
Considering the similarities between the Cauchari and Olaroz
projects, and their close proximity, there are compelling synergies
between the projects including the expected use of shared
infrastructure and processing plants, and it is likely that any
future development of the Cauchari brines would use the Olaroz
facilities. Consequently, from this point forward the company
considers the Cauchari project and its brine body part of the larger
Olaroz project. In the future, resources for Cauchari will be
reported as a discrete part of the overall Olaroz project resources.  
To view Figure 1, please visit the following link:
Geology, Data and Interpretation 
Orocobre initially carried out brine sampling from shallow pits
across the company's Cauchari properties in 2009. These pits showed
elevated Li values in brines within the salar, with lower
concentrations on the margins of the salar. The sample values may
have been diluted, as some sampling occurring following the wet
season when fresh water floods into the salar basin.  
The company also collected audiomagnetotelluric (AMT) and gravity
geophysical measurements on the Cauchari North line, and two others
in the south of the salar. The Cauchari North line (in the resource
area) was interpreted to show brine extending across the salar basin,
to the base of the survey, providing an attractive target for
drilling. Overall, the salar basin was interpreted to be at least 200
m deep. Drilling on adjacent properties within the Cauchari salar by
Lithium Americas Corp has shown the salar to be at least 450 m deep
locally (DDH7), with a number of holes drilled by that company to
greater than 300 m deep.  
In late 2011, Orocobre drilled a total of six drill holes (five
diamond and one rotary mud) in the Cauchari salar to an average depth
of 146 metres, with the deepest hole CAU001D (in the north of the
properties) drilled to 249 m. Holes were drilled with an average
spacing of 3.3 km. Drilling intersected from surface a sequence of
silt and clay up to 60 m thick, overlying a sequence of halite,
interbedded with intervals of clastic sediment to the base of
drilling. Down-hole geophysical logging data was collected to assist
with correlation between holes. All holes were geologically logged in
detail by an experienced geologist and photographs of the core taken. 
Interpretation of diamond drilling data established two major
lithological units to the base of drilling, with six subunits
internal to these. Unit A (from surface) consists of silt and clay,
with minor sand. The underlying
 Unit B is predominantly halite, with
interbedded intervals of silt and clay. Correlation of units with the
Olaroz salar to the north shows that Cauchari Unit A broadly
correlates to Units A through E at Olaroz, while Cauchari Unit B
correlates to Units F and G in Olaroz. Both Units A and B at Cauchari
host the resource. Halite (salt) reaches a maximum thickness of
greater than 190 m in CAU001D in the north of the salar, thicker than
in the Olaroz salar to the north. 
Sampling of brine from diamond drill holes established that lithium,
potassium and boron concentrations in brine are elevated, exceeding
400 mg/l Li in the north and west of the resource areas (Holes
CAU001D to 4D - Figure 2). Along the eastern salar margins Li values
are less than 200 mg/l, overlying intervals of brine with greater
than 400 mg/l Li in CAU005D. This suggests the principal brine body,
with higher Li concentrations, extends to the eastern boundaries of
the resource areas beneath lower grade brine. The brine body is
interpreted to be approximately flat lying. 
This is similar to the situation on the west of the salar, where
Lithium Americas Corp. interpreted brine to continue beneath the
Archibarca alluvial fan. Geophysics carried out by Lithium Americas
Corp. (NI43-101 report, July 12, 2012) suggests that brine continues
beneath a near surface fresh water zone and a mixed zone on both the
western and eastern margins of the salar.  
It is noted that this is a different situation from the spatially
larger Olaroz salar. The Olaroz resource is not capped by a layer of
silt and clay, with interbedded sands containing fresh water, but has
relatively uniform and high lithium grades extending to the surface
salt crust.  
Orocobre drilling and publicly released drilling results from Lithium
Americas Corp. (to the west of Orocobre's Cauchari properties) are
presented as gridded gm/l values in Figure 2. Reported mg/l drilling
results have been converted to gm/l results by multiplying the
averaged g/l in-hole concentrations by the thickness of the
intercepts in metres in each hole. This presentation of drilling
results highlights the area of highest contained Li, but it is
important to note that low gm/l values also reflect the depth of
drill holes and shallow drilling in Orocobre holes CAU003D and 4D.  
Diamond whole core samples were cut and sent to the British
Geological Survey ("BGS"), with a total of 147 samples analysed for
total porosity (Pt) and 118 for specific yield (Sy) in the UK. An
additional 155 samples were analysed in the company's Salta
(Argentina) laboratory for total porosity. The Sy analyses provided
mean values for sands (4%, due to variable halite cementation), silt
mixes (5%), clays (2%), halite-sediment mixes (7%) and halite (2% for
compact halite to 16% for porous halite), with a thick sequence of
halite interpreted to underlie the resource area.  
Resource Estimation 
The 31.04 km2 areal extent of the Cauchari resource was controlled by
the location of the property boundaries, drilling results,
geophysical profiles and salar geomorphology. The resource estimate
is based on geological controls from the 6 holes drilled, with rotary
drill hole CAU006R lying outside the resource area. Brine composite
samples were taken with a bailer at vertical spacing of 1.5, 3 and 6
metres during the diamond drilling. The location of the holes was
controlled by access to the salar, with embankments constructed to
reach sites and drill before the commencement of the wet season in
early January. Drill holes were located with a hand held GPS. 
Mean Sy values from the BGS analyses were used to calculate a
weighted Sy value for each drill hole, based on the lithologies and
thicknesses recorded during logging. A continuous Sy value was also
calculated for each hole, where geophysical logging (neutron logs)
was available. Continuous Sy values were calculated using an
algorithm relating neutron porosities (recorded every cm down hole
during geophysical logging) and Pt values; using a modification of
the methodology outlined by Houston and Gunn (2011). The results of
the lithology-weighted and the continuous Sy values were then
averaged to obtain a Sy value for each hole, as input to the resource
To view Figure 2, please visit the following link:
The averaged Sy data for each hole was used to calculate an
equivalent brine thickness at the location of each diamond hole over
a m2 unit area (length of interval in hole (i.e. 170 m) by Sy value =
equivalent brine thickness for each hole as m/m2).  
The mass of lithium (Li), potassium (K) and boron (B) for the square
metre centred on each diamond hole was calculated by multiplying the
equivalent brine thickness (converted to a volume in litres) by the
kg/l concentration of each element of interest in the diamond hole.
This mass data from the diamond holes was then kriged across
Orocobre's Cauchari tenements to produce concentration maps of kg/m2
for Li (Figure 3), K and B. The sum of the individual grid cells
provides the total resource mass as presented in Table 1, on page 2
of this press release.  
The distribution of lithium as kg/m2 is shown in Figure 3
Further Drilling 
The drilling program leading up to this resource estimate stopped
with the onset of the summer storms in the Argentine Puna region, at
the beginning of January 2012. Drill holes CAU003D and CAU004D were
terminated at 72 and 46 m respectively, as a consequence of flooding
within the salar and poor trafficability for equipment.  
Drilling results from CAU003D and CAU004D, together with results from
other holes in the program, suggest elevated lithium and potassium
concentrations continue beyond the depth at which these holes were
abandoned. Consequently the company believes further drilling would
significantly expand the size of the Cauchari resource.  
An exploration target has been defined to show the potential
additional lithium and potassium contained beneath the resource
defined in this announcement. The information on which the
exploration target is defined is outlined in the following section. 
Exploration Target 
Based on available geophysics, geology and geochemistry it is
possible to define an exploration target beneath the resource
outlined in Table 1 of this announcement. The relationship of an
exploration target to the CIM and JORC resource definitions is shown
in Figure 4. 
It must be stressed that an exploration target is not a mineral
resource. The potential quantity and grade of the exploration target
is conceptual in nature, and there has been insufficient exploration
to define a Mineral Resource in the volume where the Exploration
Target is outlined. It is uncertain if further exploration drilling
will result in the determination of a Mineral Resource in this
volume, however available information suggest this is likely. 
To view Figure 3, please visit the following link:
The exploration target is where, based on the available geological
evidence, there is the possibility of defining a mineral resource. In
keeping with Clause 18 of the JORC Code and CIM requirements the
exploration target defined at Cauchari is: 

--  Not to be considered a resource or reserve, 
--  Based on information summarized below.

It is a requirement of stating an exploration target that it is based
on a range of values, which represent the potential geological
conditions. Values have been selected to present an upper and a lower
exploration target size. It is likely that the lithium and potassium
contained in the exploration target lies somewhere between this Upper
and Lower Case.  
To view Figure 4, please visit the following link:
Information Used to Define the Exploration Target 
Orocobre's drilling intersected grades of greater than 400 mg/l Li at
or near the base of holes CAU001D (249 m), CAU002D (186 m) and
CAU005D (168 m). Accordingly elevated Li grades are likely to
continue beneath the depth of the Cauchari northern and southern
resource areas (170 m and 50 m respectively) and beneath the depth of
Orocobre previously conducted a geophysical survey in the Cauchari
Resource area (Cauchari North line) in which gravity and
Audiomagnetotelluric (AMT) data was collected. The AMT data (Figure
5) suggests brine is present in salar sediments beneath the Orocobre
properties to depths of approx. 350 m or more. The gravity survey
interpretation for this line suggested depths of less than 200 m to
the salar basement. However, the occurrence of the thick halite
sequence requires a re-interpretation of this gravity data.  
Additional information is available from the work undertaken by
Lithium Americas Corp. including drilling and geophysics. This
information, which principally relates to the area immediately west
of the Orocobre resource, suggests salar sediments were intersected
to 449.5 m below surface (hole DDH007 in Appendix 1 of King, 2010),
with multiple other holes intersecting salar sediments to 350 m deep.
Consequently there is reason to believe the lithium-bearing brine in
the Orocobre properties may extend to 350 m or deeper. The deeper
drilling conducted by Lithium Americas Corp (Figure 7-7, feasibility
study July 11, 2012) suggests there is a thick layer of sand
underlying the halite sequence intersected in Orocobre drilling. This
deep sand unit suggests potential for the same unit in the Orocobre
properties, beneath the depth of current drilling.  
To view Figure 5, please visit the following link:
Estimation of the Exploration Target 
The following parameters have been used to estimate an Upper
Assumption and Lower Assumption case for lithium and potassium in the
Cauchari Exploration Target. The former uses the higher values for
all parameters and the latter uses the lower values. Values used are
shown in Table 2.  
The thickness of the resource (Table 1) depends on the drilling
depths of Orocobre holes and has been separated into a northern and
southern area reflecting this. The exploration target (defined to lie
immediately below the resource) is consequently also separated into a
northern and southern target under the same surface outlines. 

--  The Northern target covers 19.69 km2; 
--  The southern target 11.35 km2; and 
--  The total area (northern plus southern) in all cases is a total of 31.04


--  In the northern area a thickness of 180 m (from 170 to 350 m depth) as
    the Upper Assumption and the Lower Assumption; and 
--  In the southern area a thickness of 300 m (from 50-350 m depth) as the
    Upper Assumption and 170 m (from 50 to 220 m) as the Lower Assumption,
    to account for the possibility of basement closer to surface or a
    thinner brine column.

Porosity is a vital measurement in determining a brine resource and
it is important to understand the difference between definitions of
porosity. Only part of the total porosity (Pt) consists of
interconnected pores that can be drained. The drainable porosity
component is referred to as the specific yield (Sy) - the proportion
of water that can be yielded when the aquifer is pumped.  
The BGS Sy measurements at Cauchari and Olaroz have been used for the
porosity values in the exploration target estimate.  

--  For the Upper Assumption 13% is used as the specific yield (equivalent
    to the sand dominant Sy at Olaroz or a mixture of porous halite (16% at
    Cauchari) and some finer grained sediments) 
--  For the Lower Assumption 2% is used as the specific yield (equivalent to
    compact halite at Cauchari)

Lithium and Potassium Concentrations 

--  A value of 537 mg/L for Li and 5350 mg/l K is used in the upside case,
    (equivalent to the average of chemistry data sets from CAU001D bailer
    and core extraction samples). This compares to values of 625 mg/l and
    585 mg/l Li used for the updated Lithium Americas Corp resource (with a
    500 and 354 mg/l Li cut off respectively). The corresponding K values
    determined by Lithium Americas Corp were 5123 and 4851 mg/l, 
--  A value of 260 mg/L Li and 2550 mg/L K is used in the Lower Assumption
    case (representing the lower grade values from the southern shallow part
    of the Orocobre Cauchari resource - see Table 1).

The contained lithium in the exploration target (combining values for
the northern and southern areas - see Table 2) ranges from the Upper
Assumption case of 2.6 mt of lithium carbonate and 9.2 mt of potash
to the Lower Assumption case of 0.2 mt of lithium carbonate and 0.5
mt of potash.  
It must be stressed the exploration target is based on a series of
assumptions and future drilling is required to determine the brine
grade and formation porosity (Sy) values to establish whether a
resource can be defined.  
To view Table 2, please visit the following link:
Data Collection and QA/QC 
Obtaining high quality samples in the field and ensuring that
subsequent analysis of the samples was carried out to a high standard
was considered of great importance, bearing in mind the technical
challenges of sampling fluids (brines) and semi-consolidated
Orocobre's initial diamond drilling program in the Cauchari salar was
conducted using lexan tubes in the place of the triple tube splits,
to maximize core recovery and geological understanding.
Notwithstanding the best efforts of geologists and contractors, core
recoveries averaged 76%. Down-hole geophysical logging was undertaken
on diamond drill holes to provide additional geological information.
Fluorescein (biodegradable) dye was used in the drilling fluid, to
indicate whether brine samples taken with a bailer during the
drilling were contaminated with drilling fluid.  
As a further check on the results of brine samples obtained by
bailing, during diamond drilling, brine was also extracted from core
samples in a British Geological Survey (BGS) laboratory in the UK,
where this brine was also analysed. Despite differences between the
two chemical data sets the contained metal and average grade of the
estimated resource was similar for each data set. Data obtained by
bailing, (obtaining a brine sample from a steel tube with a valve at
the base, lowered into the drill hole on a cable) during drilling of
diamond holes, was used for the resource estimate and as the basis
for definition of the exploration target. 
Core samples from diamond drill holes were used for measurements of
total porosity (total contained fluid) and specific yield
(recoverable fluid), with measurements made at the British Geological
Survey laboratories using recognized techniques.  
Chemical analyses on bailed samples were undertaken by Alex Stewart
Assayers (Argentina) S.A. ("ASA") in Mendoza, Argentina. This
laboratory has extensive experience analyzing brines from salar
projects. They are ISO 9001:2000 accredited and operate their own
internal standards consistent with ISO 17025. Standards and duplicate
samples were used extensively, with laboratory-prepared and field
standard samples submitted to the laboratory comprising 16% of the
samples submitted and duplicates comprising a further 7% of the total
With minor exceptions, analytical values of the standards fell within
+/-10% of the standard values for samples in the diamond drilling.
Duplicate samples showed a high level of sample repeatability
(precision), with all but five sample pairs falling well within
+/-10% limits. Ion balances confirm the general quality of the ASA
analyses. Additionally, 15 duplicate samples were analysed at the
University of Antofagasta to compare with the ASA sample values.
These sample pairs show average reproducible percentage differences
of 5.6% for lithium and 16.6% for potassium. Overall the analyses are
considered to be of acceptable quality for the inferred resource
estimate, based on the results of the QA/QC samples. 
The resource estimate summarized in this announcement has been
prepared by independent hydrogeologist Murray Brooker, addressing the
standards set out in the Canadian Securities Administrators' National
Instrument 43-101.  
Management Commentary 
Orocobre's Managing Director & CEO, Richard Seville, stated: "We are
encouraged by the completion of the maiden Cauchari resource estimate
of 470,000 tonnes LCE (lithium carbonate equivalent) and 1.6 million
tonnes of potash. This provides us with an additional brine source,
which would allow us to expand production at our flagship Olaroz
lithium project, which is in close proximity to Cauchari. This
resource is only shallow and there is clearly a much larger
Exploration Target beneath this resource. 
"Cauchari, in general, is not as high grade as our Olaroz resource
and sometimes has the complexity of fresh water zones and mixed zones
above the richer brines. Nevertheless the brine body has attractive
chemistry, with a low magnesium to lithium ratio, and a high
potassium to lithium ratio. These chemical characteristics are
expected to allow processing of Cauchari brine at the Olaroz
processing facilities. Conceptually, the Cauchari project could be
developed with relatively modest capital costs and expansion of the
Olaroz plant. Now we understand the potential of the Cauchari project
we can determine how the project will best contribute to the overall
value of the company," Mr. Seville said. 
About Orocobre Limited  
Orocobre Limited is listed on the Australian Securities Exchange and
Toronto Stock Exchange (TSX:ORL)(ASX:ORE), and is building a
substantial Argentinian-based industrial minerals company through the
construction and operation of its portfolio of lithium, potash and
boron projects and facilities in the Puna region of northern
Argentina. The Company is building in partnership with Toyota Tsusho
Corporation the first large-scale, de-novo brine based lithium
project in 20 years at its flagship Salar de Olaroz resource, with
projected production of 17,500 tonnes per annum of low-cost battery
grade lithium carbonate scheduled to commence in Q2 2014. The Company
also wholly-owns Borax Argentina, an important regional borate
producer. Orocobre has recently been included in the S&P/ASX 300
Index. For further information, please visit www.orocobre.com. 
Competent Person's and Qualified Person's Statement 
The technical information in this announcement has been prepared by
Murray Brooker of Hydrominex Geoscience. Murray Brooker is a
geologist and hydrogeologist and is a Member of the Australian
Institute of Geoscientists. Murray has sufficient relevant experience
to qualify as a competent person as defined in the 2004 edition of
the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. He is also a "Qualified Person" as
defined by Canadian Securities Administrators' National Instrument
43-101. Murray Brooker consents to the inclusion in this announcement
of this information in the form and context in which it appears. 
Additional information relating to the Company's Cauchari project is
available in the existing technical report entitled "Technical Report
- Cauchari Project, Argentina" dated April 30, 2010, which was
prepared by John Houston. 
Caution Regarding Forward-Looking Information 
This report contains "forward-looking information" within the meaning
of applicable securities legislation. Forward-looking information
contained in this report may include, but is not limited to, the
estimation and realization of resources at the Cauchari project, the
viability, recoverability and processing of such resources, potential
operating synergies between the Cauchari project and the Olaroz
project, and other matters related to the development of the Cauchari
Such forward-looking information is subject to known and unknown
risks, uncertainties and other factors that may cause actual results
to be materially different from those expressed or implied by such
forward-looking information, including but not limited to the risk
that further funding may be required, but unavailable, for the
ongoing development of the Company's projects; changes in government
regulations, policies or legislation; fluctuations or decreases in
commodity prices; the possibility that required permits may not be
obtained; uncertainty in the estimation or economic viability of
mineral resources; general risks associated with the feasibility and
development of the Cauchari project; unexpected capital or operating
cost increases; the risk that a the Olaroz project may not be
completed; the risk that Orocobre will not be able to negotiate a
arrangements to treat Cauchari brines at Olaroz with the Olaroz joint
venture partner, Toyotas Tsusho Corporation; uncertainty of meeting
anticipated program milestones; as well as those factors disclosed in
the Company's Annual Information Form for the year ended June 30,
2011 filed at www.sedar.com. 
The Company believes that the assumptions and expectations reflected
in such forward-looking information are reasonable. Assumptions have
been made regarding, among other things: the Company's ability to
carry on its exploration and development activities, the timely
receipt of required approvals, the prices of lithium and potash, the
ability of the Company to operate in a safe, efficient and effective
manner and the ability of the Company to obtain financing as and when
required and on reasonable terms. Readers are cautioned that the
foregoing list is not exhaustive of all factors and assumptions which
may have been used. 
There can be no assurance that forward-looking information will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward-looking
information. The Company does not undertake to update any
forward-looking information, except in accordance with applicable
securities laws. 
ABN 31 112 589 910
Australia and Asia: Orocobre Limited
Richard Seville
Managing Director
+61 419 916 338
North America: Orocobre Limited
Bruce Rose
VP, Corporate Development
+1 604 377 1423
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