Portofino Resources Unlocking the Potential of Lithium Brines in Argentina

• Portofino Resources is focused on lithium brine projects in Argentina, primarily the Yergo project. They plan to spin out other assets.
• Yergo has shown high lithium grades of 370 mg/L in sampling.
• Portofino plans a 4-hole drill program by the end of 2022, hoping to outline a 1 million-ton resource.
• Portofino is awaiting the results of a tender process for the Arizaro project. They have done extensive prior exploration work there.
• Comparable lithium brine land valuations are around $2,000/hectare, much higher than what Portofino has paid.
• Portofino believes they are undervalued compared to peers and see an upside as they advance exploration.

Portofino Resources is a Canada-based mineral exploration company focused exclusively on advancing lithium brine projects in Argentina's Lithium Triangle. With lithium demand surging due to electric vehicle adoption, Portofino sees strong potential to create value for investors by systematically exploring and developing its properties in this prolific region.

Flagship Project Advancing Rapidly

The company's flagship project is the Yergo lithium brine project in Catamarca Province. Portofino recently acquired 100% interest in this property after completing an option agreement with a local owner. They moved quickly to consolidate ownership after sampling returned high lithium values up to 370 mg/L, with low impurities.

Yergo covers approximately 2,932 hectares and is located just 9 km southeast of Neo Lithium's Tres Quebradas lithium brine project. This proximity to an advanced project helps derisk Yergo and points to the potential lithium endowment in the area. With promising results from surface sampling and geophysical surveys, Portofino is now moving ahead with drilling at Yergo. They have budgeted an initial 4-hole drill program for approximately $1 million and are targeting a start before year-end 2022.

The goals of this first drill campaign are to confirm the extent and depth of the lithium-bearing aquifers, as well as to collect samples for resource estimation. Management believes that even just these four holes could be sufficient to outline an initial resource of over 1 million tons LCE. In the early stage, a resource of this size would rank Yergo as a top-tier global lithium project.

Further drilling in 2023 aims to expand the size and confidence in the resource, moving Yergo swiftly along the path to development. Portofino's timeline is aggressive, reflecting both the prospectivity demonstrated by initial results as well as the need to advance projects quickly to take advantage of strong lithium market fundamentals.

Additional Upside from Arizaro

Beyond Yergo, Portofino is also awaiting results for the Arizaro lithium brine project in Salta Province, Argentina. Arizaro covers over 2,932 hectares in the heart of the Lithium Triangle.

The company has been conducting exploration at Arizaro on behalf of a provincial mining company, completing geophysics, surface sampling, and trenching. These surveys have outlined a substantial target aquifer. In August 2022, the province opened a public tender process for private companies to partner in the development of Arizaro. By all indications, Portofino is well-positioned to be selected as the winner. An announcement is expected soon following the conclusion of Argentina's national elections.

If successful, Portofino would earn the right to a majority stake in Arizaro. They could then fast-track the project, drawing on the significant prior exploration work. Adding Arizaro to the portfolio would give Portofino two flagship-caliber brine projects in Argentina's most prospective lithium regions.

Strong lithium demand, and low costs are key

Portofino's focus on lithium brines in Argentina provides differentiation versus many junior lithium companies focused on hard rock deposits in other countries. Lithium brines can be lower cost to produce, with fewer technical challenges, and faster development timelines to first production.

The Lithium Triangle spanning Argentina, Bolivia and Chile hosts the world's best lithium brine resources. Argentina offers a mining-friendly environment with clear permitting procedures, as well as low-cost reagents and energy.

Demand for lithium is projected to grow at over 20% per year for the rest of the decade, driven by electric vehicle and energy storage adoption. Supply has struggled to keep pace, with lithium prices recently reaching all-time highs over US$70,000/tonne. While prices have moderated, they remain several multiples above the lows seen just a few years ago. This backdrop points to a strong appetite from potential partners and acquirers for companies that can successfully explore and develop new sources of lithium supply.

Attractive Valuation Versus Peers

Despite the strengths of its projects and lithium market tailwinds, Portofino continues to trade at a modest valuation compared to lithium development peers.

Based on recent land transactions in Argentina's lithium regions, the company estimates its properties are conservatively worth over $2,000/hectare. This implies a valuation of US$10-15 million for its core project areas. With a current market capitalization of only around $11 million, Portofino believes much of this latent value remains to be unlocked.

As exploration results begin to derisk the projects, demonstrate scale potential and ultimately translate into resource estimates, the opportunity for valuation upside is substantial. With lithium demand surging and prices remaining well above historical levels, the opportunity for lithium exploration and development companies is exceptional. By securing district-scale land positions in the heart of Argentina's Lithium Triangle, Portofino Resources is well-positioned to capitalize.

Near-term catalysts from drilling at Yergo and the tender process at Arizaro provide opportunities for investors to start building positions at an early stage. Over the coming 6-12 months, systematic exploration aimed at outlining maiden resources at its projects could propel significant share price appreciation. For risk-tolerant investors, Portofino warrants consideration as an emerging lithium developer likely to attract increasing attention.

• Focused on lithium brine projects in Argentina's Lithium Triangle
• Flagship Yergo project has shown high grades up to 370 mg/L lithium
• Drill program starting at Yergo by year-end to outline initial resource
• Additional potential from the Arizaro project currently in the tender process
• Trading at a discount to comparable lithium brine land valuations