Sonora Lithium Project

Sonora Lithium project is also located in Sonora State, Northern Mexico, 180 kilometres to the northeast of Hermosillo. The project area consists of four separate concession blocks that total 4,050 hectares in area. There is road access to the concessions, which should facilitate rapid development of these prospects.

Lithium-bearing hectorite clays crop out a volcano-sedimentary sequence located near the towns of Bacadehuachi and Huasabas. Surface sampling of the hectorite zones have returned values from 1,700 to 5,500 ppm lithium, which is equivalent to 0.9 to 2.93% lithium carbonate (Li₂CO₃).

The completion of the first diamond drill tests of the southern portion of the Ventana concession have confirmed the presence of the lithium-bearing clays and indicate that a significant new lithium resource discovery is in the making (news release: January 21, 2011). The four vertical drill holes tested a 400 by 200 metre section of the southernmost portion of a 3,000 by 300 metre target area. Analytical results ranged from 955 to 5080 ppm Li in the clay horizons, with the widest drill intercept at 54.25 metres and averaging 2713 ppm lithium. The clay horizons dip gently to the east and the drill intercepts are estimated to be 80% of the true thickness.

Summary of Mineralized Drill Intercepts in La Ventana Target

*Li₂CO₃ equivalency with respect to Li is determined using a factor of 0.0005329 times Li ppm. Additional processing is required to convert the lithium minerals on the Bacanora's project to lithium carbonate and there is no guarantee that such a process will be able to convert 100% of the Li to Li₂CO₃. The economics of that process have not been established.

Along with the drilling on La Ventana, exploration activities (mapping and systematic sampling) continue on other concessions (El Sauz, Buenavista and San Gabriel), which are owned 100% by Bacanora and make up the Sonora Lithium Project. Bacanora is carrying out metallurgical tests on the samples before planning the next stage of the drilling programme. Results for the metallurgical tests are expected by the end of the first quarter of 2011.

Management believes that the hectorite deposits could be developed as large-tonnage, bulk-mineable operations

1. Concession plan

2. Drill Holes Ventana Concession

3. Ventana concession schematic cross-section