Solis Minerals: ‘in the right place at the right time’

The last time Mining.com.au spoke to Solis Minerals (ASX:SLM), the Perth-based explorer was busily putting together a portfolio of lithium assets in the Brazilian state of Rio Grande do Norte. A few months later, that portfolio is very much taking shape.

“I think we’re in the right place at the right time,” Executive Director Matthew Boyes says.

“We’re cashed up, we’ve got plenty of money, and we’ve got the right connections in Brazil to take advantage of the lithium space at the moment.”

“we’ve got plenty of money, and we’ve got the right connections in Brazil to take advantage of the lithium space at the moment”

Lithium is hot stuff these days. One need only look at the recent ‘Billionaire Battle’ over the likes of Liontown Resources (ASX:LTR) and Azure Minerals (ASX:AZS) to get a gauge on the hype.

But Solis is a few degrees removed from that hubris Down Under. The company is working quietly at a new lithium frontier which, according to exploration efforts in the region to date, could one day be the arena for similarly fierce competition.

Building up the Borborema Province

In February 2023, Solis made its foray into the Brazilian lithium sector with the purchase of 22 exploration licences known as the Borborema Project. Covering almost 30,000 hectares, it’s the cornerstone of the company’s lithium aspirations and represents a solid position from which to double down.

That doubling down came in mid-October, when Solis signed an option to acquire the Mina Vermelha property to the south of the company’s Borborema landholding.

“We’ve been trying to pin that project down for a while. It’s quite a big project, about 500 hectares,” Boyes tells Mining.com.au.

“It’s got 4km of pegmatites sticking out of the ground at surface. We’ve sampled it before, there’s some spodumene present, but there’s also pollucite, which is a caesium mineral, present. It’s a good deal for Solis: only $150,000 to get in there to give us a twelve-month exclusivity period on the asset.”

A maiden 3,600m, 23-hole diamond drilling program was launched less than a week later, initially targeting Borborema’s Estrela prospect, where 4 outcropping pegmatite bodies were identified with spodumene in rock chip samples. A further 8 holes — totalling 1,420m — were set aside for the Mina Vermelha prospect, with primary pegmatite bodies in the southern and central regions in the crosshairs.

“We’re drilling, we’re hitting pegmatites,” Boyes says.

“We will be submitting our core on a regular basis now all the way through to Christmas. As soon as that’s done, we’ll be releasing whatever information we have.”

But the announcement of the Mina Vermelha acquisition also came with the news that Solis would be dropping the option agreement it signed at the end of May to acquire the Jaguar Lithium Project. As far as Boyes is concerned, however, there’s little love lost.

“We couldn’t renegotiate an extension of the due diligence period on that, unfortunately, but it didn’t give us the confidence from what we saw that there was going to be an asset there of economic significance, so we moved on,” he says.

“The stuff in Mina Vermelha, in Estrela, is exactly the same as Jaguar as far as its state of advancement. You’ve got pegmatites at surface, we found spodumene at surface. Now we just have to drill under those pegmatites and see if we can’t prove-up a mineralised volume that’s going to be worth digging up. That’s really the game plan at the moment.”

“Now we just have to drill under those pegmatites and see if we can’t prove-up a mineralised volume that’s going to be worth digging up”

Plodding along in Peru

The game plan though it might be, it’s not as if Solis’ extensive copper tenements in Peru have been forgotten. Indeed, when the company listed on the ASX in December 2021, it was these — the Ilo Norte, Ilo Este, Cinto, Chapollita, Caruca, Pallagua and Uchusuma properties — that were the jewel in its crown.

Located within the coastal copper belt in Peru’s south, the 36,000-hectare package is currently the subject of geophysical activities following the completion of a magnetic drone survey — and subsequent data processing — at Ilo Norte in August.

“We’ll have an update regarding the geophysics on those shortly,” Boyes says.

“Peru is a longer-term thing because getting your permits to drill in Peru is a slower process, and having these tenements, they’re quite long in the tooth, some of them. Once you’ve done your first drill program, then your second drill program requires a different sort of permit. It’s a more advanced permit which requires more environmental impact assessment work to be done.”

Given the timeline for the approval of those assessments can be up to 12 months, the work is already well underway. Boyes is optimistic those approvals will be given in due course, at which point Solis will look to drill test the targets it’s found.

The slow-moving nature of things in Peru is a sign of several factors at play. Regular protests and political instability have hamstrung the pace of mining and exploration efforts in the country, and the perceived over-extent of red tape hasn’t helped.

“Getting a mine operational in Peru can take 10 to 15 years if you don’t hit major hurdles, far from the world average of about 8 years,” Raul Jacob, CFO at Southern Copper (NYSE:SCCO), told Reuters in July. 

“Getting a mine operational in Peru can take 10 to 15 years if you don’t hit major hurdles, far from the world average of about 8 years”

He also noted the 230 or so administrative processes with various authorities necessary to start building a mine, compared to roughly a dozen 20 years ago.

But Boyes isn’t losing any sleep.

“It’s slower than I’d like, but we’ve got a really good geologist in Peru, a guy called Mike Parker,” he says.

“He’s been there for a long time, knows the process, and he’s just chipping away, basically, to bring the land package up to something that someone’s going to want. So we’ll just sit there with that, keep it ticking over in the background. It looks really good, but like I said, it’s just a little bit slower.”

Brazil: a new lithium titan?

For now though, the focus is very much on Brazil. 

“Operating in the northeast of Brazil is really good, really easy,” Boyes says.

“We’ve got all the support we want locally, we’re employing people, we’ve got no problems with access to get our drills in. Good infrastructure, good access to airports, people who are trained up. You’ve got skilled labour there. It’s really been a refreshing place to work, we’re enjoying working there.”

“It’s really been a refreshing place to work”

At a time when political climates are a key factor in the making and breaking of mining and exploration companies in particular, having a good jurisdiction to work in — let alone a “really good” one — is critical.

Behind Guyana, Brazil ranked as the second-most attractive region in South America for mining investments in 2022, and 25th globally, according to the Fraser Institute — a noticeable jump from 51st globally in 2021. Survey respondents cited greater certainty over protected areas, socioeconomic agreements and community development conditions, and trade barriers as key drivers behind the improvement.

Behind Western Australia, “Brazil is going to become, in my opinion, probably the second largest producer of spodumene in the next five years,” Boyes says.

“You’ve got Sigma Lithium (TSXV:SGML) now producing, which is going to be a very big mine once it’s finished. You’ll have Latin Resources (ASX:LRS) just up the road in Minas Gerais. They’ll be producing half a million tonnes of spodumene concentrate per year as well. Brazil’s got a lot of spodumene, it’s got a lot of hard rock lithium, and it’s also an easier place to get something permitted than Canada, for example.”

The success of Sigma, Latin — which holds a 17.28% stake in Solis — and others would presumably go a long way towards proving Brazil’s potential as a tier-one mining jurisdiction. Boyes is looking to both capitalise on that pending success, and contribute to it. And though he admits the road to a resource estimate is always a challenging one, he remains optimistic.

“We need one of the assets to show that it’s got that potential, to demonstrate that in the short term. We’ve got access to drilling machines; all we need is one of these pegmatites to demonstrate that it’s going to be economic and then, yeah, we’ll be in a position to do that.”

And as for future acquisitions…

“We’re looking at other acquisitions in both Borborema and also Minas Gerais, so we’re still trying to get our hands on some good ground,” Boyes adds.

“We’ve got a great network in-country, so we need to make the most of that as soon as we can.”

“We’ve got a great network in-country, so we need to make the most of that as soon as we can”

Write to Oliver Gray at Mining.com.au

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Written By Oliver Gray
Originally from Perth, Oliver has a keen interest long-form journalism. He has written for a number of publications and was most recently Contributing Editor of The Market Herald’s opinion section, Art of the Essay.