1,635% Expansion Secures Key Lithium Ground in Argentina's Lithium Triangle

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American Salars Lithium Inc. (USLI:CSE; USLIF:OTC; Z3P:FWB; A3E2NY:WKN) has announced a significant expansion of its land holdings at the Pocitos project in Argentina's Lithium Triangle. The company has entered into a letter of intent to acquire up to 100% of the Salar De Pocitos project, covering 13,080 hectares, from an independent vendor. This acquisition increases the company's total footprint in the area by 1,635% to 13,880 hectares, making it the second-largest landholder on the Salar de Pocitos.

The Pocitos 1 claim, which American Salars already owns, spans 800 hectares and contains a National Instrument 43-101 mineral resource estimate prepared by WSP Australia. The report inferred a lithium carbonate equivalent (LCE) resource of 760,000 tonnes across the Pocitos 1 and Pocitos 2 blocks, with Pocitos 1 containing 456,000 tonnes of LCE in situ. While American Salars does not own Pocitos 2, all drilling to date has been completed on Pocitos 1.

The newly acquired Salar De Pocitos land has been the subject of extensive historical exploration, including drilling, surface sampling, and geophysical surveys. The company's initial plan includes compiling data from previous exploration work and integrating it with existing drill results at Pocitos 1 to update the NI 43-101 mineral resource estimate. Following this, scoping and feasibility studies will be conducted to advance the project toward commercial production.

The Pocitos project is strategically located approximately 100 kilometers west of San Antonio de Los Cobres and 250 kilometers west of Salta's provincial capital. It benefits from key infrastructure, including access to Highway Route 17 and proximity to the Pocitos industrial park, which has a natural gas pipeline. Additionally, the project is near a railway that connects to the Port of Antofagasta in Chile, a crucial logistics advantage for future lithium production.

American Salars' CEO R. Nick Horsley emphasized the strategic nature of the expansion, stating in the company announcement, "This acquisition represents the culmination of tremendous work by the whole American Salars team and is a game changer for the company and our stakeholders."

The terms of the acquisition grant American Salars an immediate 75% interest in the project, with the option to earn full ownership through cash payments totaling US$2 million, the issuance of 20 million shares, and a royalty buyout agreement. The transaction is subject to a 10% finder's fee.

In addition to expanding its Pocitos holdings, American Salars has terminated its option on the Candela II project in the Incahuasi salar.

Lithium Market in Flux: Shifting Supply, New Tech, and Emerging Deficits

The lithium market in 2025 faced shifting supply dynamics, geopolitical pressures, and evolving industry strategies, marking a period of potential transition after years of volatility. In a January 14 report from USA News Group, analysts projected that the global lithium market would reduce its oversupply to approximately 80,000 tonnes of lithium carbonate equivalent (LCE) in 2025, down from nearly 150,000 tonnes in 2024. The report cited a Bank of America forecast predicting a shift toward a lithium supply deficit by 2027, emphasizing the need for US$116 billion in investments by 2030 to meet electric vehicle (EV) production targets.

According to John Newell of John Newell & Associates on February 19, American Salars Lithium Inc. was among the companies that showed potential for a turnaround following the lithium market correction.

Fastmarkets reported on February 6 that the lithium market had remained oversupplied for several years, with production rising from approximately 737,000 tonnes in 2022 to nearly 1.2 million tonnes in 2024. However, production cuts announced in late 2024, combined with an increase in annual global EV adoption projected at 29% for 2024 and 37% for 2025, contributed to expectations of a more balanced market.

Fastmarkets projected an oversupply of just 10,000 tonnes in 2025 and a potential deficit of 1,500 tonnes in 2026. Paul Lusty, Fastmarkets' head of battery raw material analytics, stated, "Lithium market conditions — particularly during the latter part of 2024 — led to growing producer restraint, both in China and elsewhere." He noted that several Australian lithium producers had announced production cuts, suspended expansion plans, and placed some plants on care and maintenance due to market conditions.

A February 16 report from Cosmos highlighted progress in lithium-ion battery technology, particularly in lithium nickel oxide (LiNiO2) cathodes. Researchers at the University of Texas at Dallas developed a method to reinforce these cathodes with positively charged ions, aiming to prevent cracking and degradation over multiple charge cycles. Dr. Kyeongjae Cho, Professor of Materials Science and Engineering at UTD, stated that strengthening the cathode structure could help lithium nickel oxide batteries reach commercial viability. PhD student Matthew Bergschneider noted, "We'll make a small amount at first and refine the process. Then, we will scale up the material synthesis and manufacture hundreds of batteries per week at the BEACONS facility." These advancements could enhance battery performance while reducing dependence on cobalt, a costly and difficult-to-source material used in traditional lithium-ion batteries.

Analyst Sees American Salars Poised for Lithium Market Rebound

According to John Newell of John Newell & Associates on February 19, American Salars Lithium Inc. was among the companies that showed potential for a turnaround following the lithium market correction. In the report, Newell noted that lithium sector valuations had declined significantly as supply surged and investor sentiment turned bearish. However, he suggested that certain lithium exploration companies, including American Salars, had positioned themselves strategically for recovery.

Newell highlighted that American Salars focused on lithium brine exploration within Argentina's Lithium Triangle, a region known for some of the world's largest lithium reserves. He noted that the company's recent land expansion at the Pocitos project and its ongoing resource development efforts placed it in a favorable position as lithium prices stabilized. "Among the hardest hit in the correction were Atlas Lithium Corp. and American Salars Lithium Inc.," Newell wrote, "both of which saw significant share price declines as lithium prices softened and investor sentiment turned bearish. However, technical indicators suggest these stocks may be in the process of forming a bottom, setting up for a potential recovery."

Newell further pointed to broader lithium market dynamics that could benefit companies like American Salars. He referenced the anticipated tightening of lithium supply and sustained demand from the electric vehicle (EV) sector, stating that these factors could drive renewed investor interest in lithium exploration and development projects. With long-term lithium demand projected to rise significantly by 2030, he suggested that companies with well-positioned assets could be poised for future growth.

American Salars Expands Footprint in Argentina's Lithium Triangle, Positioning for Growth

The expansion of American Salars' Pocitos project strengthens its position within Argentina's Lithium Triangle, a globally significant lithium-producing region. As per the company, American Salars's ability to consolidate a district-scale land package may attract industry attention, particularly from major lithium producers engaged in mergers and acquisitions.

The Pocitos 1 claim has demonstrated strong lithium brine flow rates, with a 2022 drill program recording lithium values of 169 parts per million. Testing conducted by Ekosolve Ltd. achieved a 99.8% lithium carbonate purity level with an extraction rate exceeding 94%. The ongoing borehole magnetic resonance surveys aim to enhance resource confidence, potentially upgrading the current inferred NI 43-101 estimate.

American Salars plans to attend the Prospectors & Developers Association of Canada (PDAC) convention from March 2 to 5, 2025, in Toronto. The event provides an opportunity for the company to engage with industry stakeholders, showcase its expanded portfolio, and attract potential partners or investors.

With Argentina's government signaling a pro-mining stance under President Javier Milei, regulatory conditions could become increasingly favorable for lithium developers. If planned infrastructure improvements and regulatory changes materialize, they could further enhance the economic viability of lithium projects in the country.

By expanding its holdings and advancing exploration efforts, American Salars is positioning itself for long-term growth in the lithium sector, with further updates expected as exploration progresses.

Ownership and Share Structure

American Salars said it has 28.8 million shares outstanding and 5.5 million warrants, according to the company.

As for insiders, the CEO Horsley owns about 1.83 million, or about 7.37%, with 4666,666 warrants. Strategic investor Hillcrest Merchant Partners owns 1 million shares or 4.03%. There are no institutional investors, and the rest is retail.

Its market cap is CA$2.01 million. It trades in a 52-week range of CA$0.45 and CA$0.06.