Water Tower Research Publishes Initiation of Coverage Report on Standard Lithium Ltd., “Striving to Become Domestic Lithium Supplier from Arkansas Brine”

December 18, 2023, ST. PETERSBURG, FL – Water Tower Research (www.watertowerresearch.com) has published an Initiation of Coverage Report on Standard Lithium Ltd. (TSXV: SLI) titled, “Striving to Become Domestic Lithium Supplier from Arkansas Brine”. The report can be accessed here.

Standard Lithium, a near-commercial lithium development company, is advancing lithium extraction projects in Southern Arkansas and East Texas, which could position the company as a major domestic lithium supplier. SLI’s projects will extract lithium from brine produced from the Smackover Formation, which is recognized as having among the highest known lithium concentrations in North America. The Smackover Formation has produced oil & gas since the 1920s and brine since the 1950s.

The Phase 1A Project in Union County, Arkansas will recover lithium through a proprietary Direct Lithium Extraction (DLE) process that has been successfully utilized at a Demonstration Plant since 2020. The project will recover lithium from tail brine processed from a bromine-recovery facility that has been producing since 1957. The project aims to produce an average of 5,400 tons/year of battery-quality lithium carbonate (Li₂CO₃) over a 25-year economic life. Pending a positive final investment decision (FID) in 1H24, commercial lithium production could begin in 2026.

The South West Arkansas Project in Columbia and Lafayette Counties is located where the Smackover Formation has some of the highest tested lithium concentrations in North America. Base-case production is targeted at 30,000 tons/year of lithium hydroxide monohydrate (LiOH·H₂O). Pending a positive FID, commercial production could commence in 2027. On October 25, 2023, SLI announced positive test results from three Smackover wells in East Texas. Samples indicated an average lithium grade of 644 mg/L, including one sample at 806 mg/L, representing the highest known sample in North America. The brines also indicated high concentrations of potash and bromine.

A definitive feasibility study (DFS) for the company’s Phase 1A Project was filed October 18, 2023, and a Preliminary Feasibility Study (PFS) for the South West Arkansas Project was filed September 18, 2023. Based on the estimates in the two studies, the projects SLI is advancing to development have a combined pre-tax NPV (8%) of ~US$5.3-US$6.1 billion based on an average lithium selling price of $30,000/ton. Figures for both projects exclude the impact of mineral royalties that have yet to be determined. Phase 1A economics are also subject to brine fees that will be negotiated with LANXESS. The ultimate equity value to SLI shareholders will depend on the final outcome of the remaining economic items to be determined, project financing alternatives, and commercial offtake arrangements.

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Tags: lithium brine, battery minerals, US critical minerals, Arkansas lithium, Smackover brine, Lithium, Grid Storage