Central Puerto: A Strategic Move into Lithium Mining

Central Puerto S.A. (NYSE:CEPU), a leading electricity generation company in Argentina, has taken a significant step in its diversification strategy by announcing a strategic investment in the "3 Cruces" lithium mining project, located in the province of Catamarca. This initiative not only reaffirms the company's commitment to boosting the Argentine mining industry but also positions it as a key player in the value chain of electric mobility and renewable energies.

Central Puerto's investment in the "3 Cruces" project is a strategic move that aligns with its long-term vision for the energy transition. By acquiring a 27.5% stake in the project, the company recognizes its great potential as a future lithium-producing mine in the highest-grade basin discovered in Argentina. This decision is in line with Central Puerto's vision of focusing on export industries that show high comparative advantages and consolidating itself as a key player in the value chain of electric mobility and renewable energies.

The "3 Cruces" project is located in the Province of Catamarca, Argentina, approximately 30 km from the Chilean border and 154 km from Fiambala. The company already owns 100% of a total of 27,540 ha adjacent to the 3Q project of the former Neo Lithium Corp., now Zijin Corporation; and controls another 50,000 ha of neighboring areas. Initial work began in December 2023, with the consolidation of mining rights with its epicenter at the Tres Cruces Volcano and the alluvial cone right next to the Tres Quebradas salt flat.

The preliminary results of geophysics also confirm a geology shared with Tres Quebradas, so high grades and low impurities are expected. This shared geology is expected to result in high grades and low impurities in the "3 Cruces" project, further enhancing its potential.

Fernando Bonnet, General Manager of Central Puerto, stated: "This investment not only represents an important milestone in Central Puerto's growth strategy, but also a unique opportunity to promote the development of the southern region of the Province of Catamarca. The '3 Cruces' project will generate quality employment for the inhabitants of the region, promoting economic and social growth. In addition, as part of this project, we are committed to contributing all our capacity to collaborate in carrying out this project responsibly, respecting the environment and working closely with local communities."

Lithium is a strategic mineral for the future of energy and mobility, and we are convinced that "3 Cruces" has the potential to become a benchmark project for the region. With this initiative, Central Puerto reaffirms its objective of becoming an essential player, as an Argentine company, in the development of mining in the country and as a protagonist in the challenges posed by the energy transition.

Central Puerto's experience in electricity generation and infrastructure development can translate to lithium mining in several ways. The company's experience in resource management, environmental stewardship, financial strength, and strategic vision can all be applied to the lithium mining sector. By leveraging these strengths, Central Puerto is well-positioned to succeed in this new venture.

However, Central Puerto also faces potential risks and challenges in the lithium mining sector. These include environmental concerns and social impact, market volatility and price fluctuations, regulatory and political risks, technological challenges, and geological uncertainties. To mitigate these risks, Central Puerto can implement various strategies, such as conducting thorough environmental impact assessments, engaging with local communities, implementing responsible water management practices, diversifying its investment portfolio, implementing hedging strategies, staying informed about regulatory changes, building strong relationships with stakeholders, and continuously monitoring and evaluating the project's progress.

In conclusion, Central Puerto's strategic investment in the "3 Cruces" lithium mining project is a significant step in its diversification strategy and positions it as a relevant player in the lithium mining industry. By leveraging its experience in electricity generation and infrastructure development, Central Puerto is well-equipped to navigate the challenges and opportunities presented by the lithium mining sector. As the company continues to grow and adapt, it is poised to play a crucial role in the energy transition and the development of the Argentine mining industry.