Arizona Lithium Advances Dual Lithium Projects with Innovative DLE Technology

Arizona Lithium Ltd

• ASX Code: AZL
• Market Cap: $45.62M
• Shares on Issue (SOI): 4,561,814,528
• Cash: $2.29M (as of 31 December 2024)

Summary of the Announcement

Arizona Lithium Ltd has unveiled its recent progress in advancing two major lithium projects in North America. The company is set on strengthening its presence in the rapidly expanding lithium market, primarily driven by the global shift towards electric vehicles (EVs) and renewable energy storage systems. With a diversified portfolio that leverages both lithium brine and sedimentary resources, Arizona Lithium is well-positioned to address the increasing demand for high-purity lithium. The announcement highlights strategic initiatives, technical advancements, and clear milestones that outline the journey towards scalable production and enhanced economic viability.

Summary of Key Developments

Arizona Lithium Ltd is making significant inroads in the lithium sector with a clear focus on innovative extraction techniques and robust resource bases. The company’s approach is two-pronged:

• It is developing the Prairie Lithium Project in Saskatchewan, Canada, which is designed to harness the advantages of Direct Lithium Extraction (DLE) from an expansive brine resource.
• It is also advancing the Big Sandy Project in Arizona, USA, which explores sedimentary lithium resources that are bolstered by promising partnership opportunities.

This balanced strategy not only diversifies risk but also aligns with the growing technological and market trends in the lithium industry.

What are the Key Features of the Prairie Lithium Project?

The Prairie Lithium Project is among the flagship developments of Arizona Lithium Ltd and offers several noteworthy advantages:

1. Expansive Resource Base: The project covers 345,000 acres with a substantial brine resource base, providing a strong foundation for long-term production.
2. Advanced Extraction Technology: The utilisation of Direct Lithium Extraction (DLE) is a game-changer. This method allows for faster processing times and minimises environmental impact by reducing the need for large evaporation ponds.
3. Feasibility and Cost Efficiency: A Preliminary Feasibility Study (PFS) estimates the operating cost at USD $2,819 per tonne of lithium carbonate, positioning the project as one of the more cost-efficient operations globally.
4. Modular Design for Scalability: With a focus on scalable production, the project’s design allows for incremental growth, making it adaptable to the evolving market demand.

The innovative approach and significant resource volume render the Prairie Lithium Project a pivotal element in the company's overall strategy.

How Does the Big Sandy Project Drive Value?

The Big Sandy Project, located in the heart of Arizona, stands out due to its strategic location and resource potential:

• Resource Estimate: The project boasts an inferred and indicated resource of 320,800 tonnes of Lithium Carbonate Equivalent (LCE) from just 4% of the total property area, indicating vast untapped potential.
• Strategic Partnerships: Collaborating with the Navajo Transitional Energy Corporation (NTEC) has bolstered the project’s development by leveraging regional expertise and established infrastructure.
• Ongoing Validation: Bulk sampling and metallurgical tests are actively underway, further confirming the viability and future scalability of the project.

This project is perfectly positioned to benefit from proximity to key markets and essential infrastructure, enhancing its attractiveness to investors looking for long-term value in a stable jurisdiction.

Understanding Direct Lithium Extraction (DLE)

Direct Lithium Extraction (DLE) is central to Arizona Lithium’s innovative extraction strategy. By bypassing traditional evaporation methods, DLE technology offers several advantages:

1. Faster Processing Times: Lithium extraction using DLE can occur in hours rather than the months or years required by conventional methods.
2. Reduced Environmental Impact: DLE minimises land use by eliminating the need for extensive evaporation ponds and supports freshwater conservation through recycling and use of alternative water sources.
3. Operational Efficiency: The compact facility setup inherent to DLE operations results in a smaller surface footprint while maintaining a high extraction efficiency.

For investors, this technology not only reduces operational risks but also significantly enhances the financial and environmental sustainability of the projects.

What are the Future Plans & Timelines?

Arizona Lithium has clearly mapped its future with ambitious yet achievable milestones for both the Prairie Lithium and Big Sandy Projects. The company’s roadmap includes:

Prairie Lithium Project Milestones

• Q1 2025: Release of updated resource estimates incorporating data from recent drilling campaigns.
• Q2 2025: Commencement of facility construction at Pad #1, which will include critical production wells and disposal infrastructure.
• Q3 2025: Well commissioning at Pad #1 to support the initial phase of brine production.
• Q4 2025: Commissioning of the commercial DLE unit, with first production targeted for December 2025.

Big Sandy Project Milestones

• Q1 2025: Continued resource and metallurgical testing at the Lithium Research Centre in Tempe, Arizona.
• Ongoing in 2025: Expansion of resource delineation through additional drilling and bulk testing to better define high-grade lithium ore areas.

An overview of the project milestones is summarised here:

What Underpins the Investment Thesis?

The investment proposition for Arizona Lithium Ltd is built on several compelling factors:

Diversified Project Portfolio

• Dual-Resource Strategy: By targeting both brine and sedimentary resources, the company diversifies its operational risk and maximises exposure to different aspects of lithium production.
• Scalability: The modular design of the Prairie Lithium Project and the expansive potential of the Big Sandy Project provide a robust framework for scaled production that is responsive to market demands.

Partnership Strengths

• Collaborations with Established Entities: The deployment of Koch Technology Solutions’ Li-Pro DLE technology shows market confidence in Arizona Lithium’s technical capabilities. Additionally, the partnership with Navajo Transitional Energy Corporation (NTEC) underscores a strong regional engagement that supports project development.
• Local Expertise and Infrastructure: Partnerships offer not just technical support but also vital local insights, which are essential in navigating regulatory frameworks and ensuring timely project execution.

Economic Viability

• Project Economics: Notably, the Prairie Lithium Project’s PFS indicates a post-tax Net Present Value (NPV8) of USD $312 million and a post-tax Internal Rate of Return (IRR) of 20.4%. Furthermore, the total Capex is estimated at USD $290 million, which is achieved by leveraging a cost-efficient, modular approach.
• Operating Costs: With an operating cost of USD $2,819 per tonne of lithium carbonate, the project stands out among its peers in terms of cost efficiency.

These factors collectively strengthen the company’s investment thesis, making Arizona Lithium an attractive opportunity for long-term investors keen to participate in the global lithium supply chain.

Why Should Investors Follow This Company?

Arizona Lithium Ltd presents a robust case for investment for several key reasons:

• Scalable Production: With clear milestones and a modular design, both projects are set to deliver scalable lithium outputs.
• Technological Advancement: The integration of DLE technology marks a significant upgrade in extraction methods, ensuring both quicker turnaround and minimal environmental footprint.
• Strategic Partnerships: Collaborations with industry leaders like Koch Technology Solutions and NTEC provide the necessary technical and regional support.
• Market Opportunity: The company is positioned to meet the rising demand driven by the transition to renewable energy and the rapid growth of electric vehicles.
• Resource Expansion: Both projects have ample untapped areas, suggesting the possibility of further resource enhancements as exploration continues.

Key Takeaway: Arizona Lithium Ltd is at the forefront of a dynamic industry, with strategic projects and cutting-edge extraction technology that position it as an important player in the future global lithium market.

Additional Considerations

• Exploration Upside: There is significant potential for increased resource discovery in both projects, which can further enhance project scalability.
• Innovative Research: With its active Lithium Research Centre in Arizona, the company is dedicated to continuous improvement in extraction techniques and recovery rates.
• Geographical Advantage: Operating in Saskatchewan, Canada, and Arizona, USA, Arizona Lithium benefits from favourable regulatory frameworks, advanced infrastructure, and close proximity to growing battery production hubs.
• Sustainability Focus: The emphasis on technologies that minimise environmental impact, such as DLE, enhances the company’s appeal in an era where sustainability and responsible mining are crucial.

In summary, Arizona Lithium Ltd’s comprehensive approach—combining robust project fundamentals with technological innovation and strategic partnerships—creates a compelling investment outlook. Investors are likely to find confidence in the company’s ability to deliver both financial returns and sustainable development, securing a valuable position in the evolving lithium market.

Ready to Explore the Future of Lithium Investment?

Dive deeper into Arizona Lithium's innovative lithium projects and discover why this ASX-listed company is poised to become a key player in the global renewable energy transition. Visit Arizona Lithium's official website to access exclusive project details, investor presentations, and strategic insights that showcase the company's potential for growth in the rapidly expanding lithium market. Don't miss your opportunity to understand how Arizona Lithium is redefining lithium extraction with cutting-edge Direct Lithium Extraction technology and a robust two-project portfolio in North America.