Unlocking Undervalued Lithium Assets: NGEx's Strategic Position in the Vicuña District Amid Global Supply Constraints

Global Lithium Demand and Supply Constraints

The global lithium market is under intense pressure as demand surges to meet decarbonization goals. By 2025, global lithium demand is projected to exceed 1.4 million tons, driven by electric vehicle (EV) battery production and energy storage systemsArgentina to Boost Lithium Production 75% in 2025 [https://discoveryalert.com.au/news/argentina-lithium-production-boost-75-growth-2025/]^[1]. However, supply remains constrained, with Argentina and Chile—the world's top lithium-producing nations—struggling to scale production fast enough to meet demandChile’s Lithium Strategy and Market Outlook [https://www.mining.com/web/chile-lithium-strategy-2025/]^[2]. Argentina, for instance, aims to increase its lithium carbonate equivalent (LCE) output by 75% in 2025, targeting 130,800 tonnesArgentina’s 2025 Lithium Production Targets [https://www.mining.com/web/argentina-lithium-2025/]^[3], while Chile plans to produce 305,000 tonnes in 2025, despite regulatory and environmental hurdlesChile’s Lithium Production and Regulatory Challenges [https://www.bloomberglinea.com/english/these-are-the-41-companies-betting-on-argentinas-lithium-key-export-and-price-forecasts/]^[4].

This supply-demand imbalance has created a fertile ground for undervalued lithium assets, particularly in regions with underexplored potential. While most attention focuses on lithium brine projects in Argentina's lithium triangle (Salta, Jujuy, Catamarca), the Vicuña District in San Juan Province—a hub for copper, gold, and silver—remains an overlooked frontier. Here, NGEx Minerals Ltd. (TSX: NGEX) is positioning itself as a key player, leveraging its high-grade copper-gold-silver projects to unlock synergies with lithium exploration in the district.

NGEx's Strategic Position in the Vicuña District

NGEx's Lunahuasi project, a high-sulfidation copper-gold-silver deposit in the Vicuña District, has emerged as one of the most promising discoveries in the Andes. Since its 2023 discovery, Phase 3 drilling has expanded the mineralized volume to 1.2 km north-south, 1.7 km east-west, and 1.2 km vertically, with the deposit remaining open in all directionsNGEx Reports Q1 2025 Results [https://www.newswire.ca/news-releases/ngex-reports-q1-2025-results-successful-phase-3-campaign-reinforces-lunahuasi-s-unique-potential-867468794.html]^[5]. The project's four distinct mineralization styles—including porphyry copper-gold and high-grade gold veins—position it as a multi-metal district with significant expansion potentialLunahuasi: Phase 3 Drilling Results [https://www.panorama-minero.com/en/news/lunahuasi-phase-3-drilling-continues-to-showcase-significant-grades-and-scale]^[6].

However, NGEx's value proposition extends beyond copper and gold. The Vicuña District, straddling the Chile-Argentina border, is a geological nexus for critical minerals. It hosts world-class projects like Filo del Sol, Josemaría, and Los Helados (owned by NGEx), which are being developed through a 50/50 joint venture between Lundin Mining and BHPVicuña District Development [https://thelundingroup.com/lundin-group-of-companies/reports-from-the-field/vicuna-a-giant-district-in-the-making/]^[7]. Crucially, the district's infrastructure—shared processing plants, power lines, and roads—is being designed to support multiple commodities, including lithium. This cross-commodity synergy is critical, as lithium projects in the region, such as Origen Resources' Los Sapitos brine project, are advancing in parallelOrigen Resources’ Los Sapitos Project [https://origenresources.com/origen-commences-field-work-at-los-sapitos/]^[8].

Phase 4 Exploration at Lunahuasi: Expanding High-Grade Copper-Gold-Silver

NGEx's Phase 4 exploration plan, set to begin in October 2025, will deploy eight drill rigs for 25,000 meters of diamond drilling, focusing on three objectives:
1. Short-range resource definition of high-grade zones (Mars, Saturn, Jupiter).
2. Mid-range step-out drilling to extend mineralized intersections.
3. Long-range exploration to test new components of the systemNGEx Announces Phase 4 Exploration Plan [https://www.newswire.ca/news-releases/ngex-announces-phase-4-exploration-plan-at-lunahuasi-884632197.html]^[9].

This aggressive drilling program builds on Phase 3 results, which included intersections like 27.4 meters at 23.17 g/t Au and 1,619 meters at 0.87% CuEqHigh-Grade Intersections at Lunahuasi [https://ngexminerals.com/news/ngex-reports-2024-results-phase-3-drilling-at-lun-122777/]^[10]. By refining resource estimates and expanding the deposit's boundaries, NGEx aims to de-risk the project for future development, attracting capital in a market increasingly prioritizing multi-metal assets.

Vicuña District's Lithium Potential and Synergies

While Lunahuasi itself is not a lithium deposit, the Vicuña District's lithium potential is gaining traction. Origen Resources, for example, is advancing its Los Sapitos project, where a 2023 geophysical survey identified a deep lithium brine aquifer 482 meters below surfaceLos Sapitos Lithium Brine Discovery [https://mogotesmetals.com/new-claims-in-vicuna-district-exploration-update/]^[11]. Meanwhile, Argentina's government has streamlined regulatory processes and reduced mining royalties to attract lithium investment, with the country aiming to capture 10.5% of the global lithium market by 2025Argentina’s Lithium Market Share Goals [https://www.panorama-minero.com/en/news/argentina-updates-its-mineral-resources-and-reserves-in-lithium-copper-gold-silver-and-uranium]^[12].

NGEx's role in the district's infrastructure development—shared with projects like Filo del Sol and Los Helados—creates indirect exposure to lithium. For instance, the district's planned processing plants and power infrastructure could reduce capital costs for lithium projects like Los Sapitos, enhancing their economic viability. Additionally, NGEx's exploration expertise in the region may lead to future lithium discoveries, either through direct exploration or joint ventures.

Investment Thesis: Undervalued Exposure to Critical Minerals

NGEx's stock trades at a discount to its peers, despite its strategic position in the Vicuña District. With a market cap of ~$1.2 billion (as of September 2025), the company is undervalued relative to its resource base and exploration potential. Key catalysts include:
- Phase 4 drilling results (Q1 2026), which could trigger a re-rating of the project's resource potential.
- Argentina's lithium policy reforms, which may spur cross-border lithium exploration in the district.
- Infrastructure synergies with lithium projects, reducing capital intensity for future developments.

Conclusion

NGEx Minerals is a compelling play on the Vicuña District's multi-metal potential, with its Lunahuasi project serving as a cornerstone for future exploration. While lithium is not its primary focus, the district's infrastructure and geological continuity position NGEx to benefit from Argentina and Chile's lithium booms. For investors seeking undervalued exposure to critical minerals in a supply-constrained market, NGEx offers a unique combination of high-grade copper-gold-silver and indirect lithium synergies.