The company said today it had entered into a binding agreement to develop “the world class Maricunga lithium brine project in Chile”, and investors piled into the stock marking it up around 40%.

At the 38c the stock was trading at late today, those that participated in LPI’s IPO last month were showing a paper profit of nearly 100%.

Maricunga is held by a private Chile company called Minera Salar Blanco (MSB) controlled by Chilean businessman Martin Borda, with LPI to fund exploration and development costs over the next 2.5 years to earn a 50% interest in a company formed by the two to hold the asset.

The aim is to complete a definitive feasibility study in that timeframe.

MNN was unable to reach Holland to ascertain how much it might cost to complete the study.

Maricunga does have an established measured resource of 574,000 tonnes of lithium (estimated after the drilling of 58 holes), with the prospect said to have “characteristics comparable to the world-leading Atacama lithium brine deposit, which sits at the bottom of the cost curve”.

LPI is to provide a $US2 million secured loan to MSB in order to fund initial exploration (16 diamond holes) in September ahead of transaction completion in October. 

Sydney-based Holland was formerly the managing director of Stratum Metals, an ASX-listed junior gold explorer east of Menzies in Western Australia.

Holland led that company from its IPO in 2011 to early 2014.

LPI’s IPO raised $A8 million.

At 38c in late trade the stock was capitalised at $43 million.