Projects - Overview

Background

Pan American Lithium Corp. is the owner of interests in nine salars with the potential to produce lithium and other metals from surface lakes and subsurface brines, all located in the mineral-rich Atacama Region III of Chile. The rights in these nine lithium salars cover a cumulative area in excess of 13,000 hectares, all accessible via serviceable roads. Pan American's subsidiary, Salico, owns a 100% interest in its project, subject only to certain capped royalties and a 1% Chilean nominee in Salico.

It is believed that the salars collectively carry the potential to host lithium in three distinct brine types: surface water, shallow brines and deep brines.

The Company completed a study at its Laguna Verde salar in Atacama Region III, Chile, in order to develop an inferred resource estimate for lithium content compliant with National Instrument 43-101. The Company engaged QP John Hiner, L.P. Geo., for this study. Hiner visited the Laguna Verde and other salars of Pan American in late 2009 and authored the NI 43-101 Technical Report on the Company’s Chilean salar projects that was filed on SEDAR in November 2009⁽¹⁾.

Pan American has since competed completed, in April 2010, the inferred resource estimate of the lithium content at Laguna Verde and, on June 14, 2010, filed on SEDAR the backup technical reports that support the inferred resources estimate. Presently, Pan American is in the process of evaluating vendors for brine chemistry process design for the Laguna Verde property.

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Highlights and Strategy — Explore and Develop Chilean Salars to Produce Lithium:

• South American salars (Chile, Bolivia, Argentina) currently provide roughly 75% of the global supply of lithium

• Conventional lithium evaporation and recovery projects feature low operating and capital costs, are technologically proven and relatively easy to design and construct

• Rights in 9 salar (brine lake and dry lake bed) resources in Chile transferred to Pan American Lithium Corp. containing lithium and other metals

• These salars are anticipated to produce lithium carbonate and other forms of lithium and significant potash from waters and brines containing light metals

• Deep brines at these salars could contain volumes of light metals in orders of magnitude greater than the shallow lakes

• Project 1 — Laguna Verde — will be designed to produce lithium and other light metals — initially from  brine lake, and then from deeper brines

• Rights in 8 additional light metals projects owned by Pan American Lithium Corp. in Region III

The Salars

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Laguna Verde Project — Chile Region III — Surface Brine Lake

• Located 190 km from Copiapo on serviceable roads at 4,230 m elevation
• Inferred resource estimate at average lithium grade of 212.40 mg/litre computed to be 512,960 tons of lithium carbonate equivalent⁽¹⁾ (current LiCO₃ average market price ~ $5,200/metric ton; Source: as per "The Lithium Site," www.lithiumsite.com/lithium_market.html, July 8, 2010)
• Inferred resource estimate at average potassium grade of 4,881 mg/litre computed to be 4,223,134 tons of potassium chloride equivalent ⁽¹⁾ (potash market price ~ $367/metric ton; Source: as per Reuters quote regarding potash pricing of KTS, a German salt miner and the world's 4th largest lotash supplier, June 11, 2010)
• Potential for significant tonnage of deep brines, pending exploration drilling

Other Surface Water Brine Projects

• Laguna Brava — Existing shallow brine lake which contains inferred resource estimate at average lithium grade of 313 mg/litre computed to be 13,580 tons of lithium carbonate equivalent⁽¹⁾ and inferred resource estimate at average potassium grade of 3,356 mg/liter computed to be 46,623 tons of potassium chloride equivalent⁽¹⁾ with high potential for deep brines.

• Rio de la Sal — rights to alluvial waters, surface flow and runoff from Pedernales salar at lower elevations

Additional Brine Projects with High Lithium Potential (all in Region III)

• Lagunas del Jilguero — small existing lake with deep brines undrilled

• La Laguna — small existing lake with deep brines undrilled

• Salar de Piedra Parada — significant work done in 1990s on precious metals

• Laguna Escondida

• Salar Ignorado

⁽¹⁾ See NI 43-101 Technical Report filed on SEDAR on June 14, 2010, here:  http://www.sedar.com/search/search_form_pc_en.htm (search for "Pan American Lithium") for more information

⁽²⁾ Salico has been granted contractual rights to extract and exploit lithium, light metals and commercial salts with respect to Salar Piedra Parada; Salico was conveyed senior mineral concessions at Piedra Parada on over 2,100 hectares, and also received overstaked concessions on 1,500 additional hectares at Piedra Parada which are subject to the senior rights of a third party