Standard Lithium stock rises on ‘highest confirmed lithium grade brine’ in Arkansas

Standard Lithium‘s (TSXV: SLI) resource definition work at its South West Arkansas project has returned sampling results of up to 581 mg lithium per litre, which represents the “highest confirmed grade” in Arkansas brines, the company said.

Two months ago, Standard Lithium claimed the “highest confirmed lithium grade brine” in North America from resource expansion work in the East Texas Smackover region, with one sample from of a newly drilled well returning 634 mg lithium per litre.

“We continue to be very pleasantly surprised by the lithium grades sampled from our projects in Arkansas and Texas,” Andy Robinson, president and COO of Standard Lithium, said in a news release.

As noted by Robinson, an October 2021 preliminary economic assessment (PEA) for the South West Arkansas project used a conservative assessment of the lithium brine grades across the project area, yet still yielded “very attractive project economics.” The study forecast an after-tax net present value of US$2 billion and internal rate of return of 32% (using an 8% discount rate).

The lithium brine resource, which was last updated in 2021, is estimated at 1.2 million tonnes of lithium carbonate equivalent in the inferred category. The resource would support a 20-year mine life producing an average of 30,000 tonnes per year of battery-quality lithium hydroxide monohydrate, as outlined in the PEA.

To support a forthcoming prefeasibility study, the company kicked off a drilling program at South West Arkansas to update the project economics. The drilling, which will include both new and the pre-existing wells drilled for oil and gas exploration, is expected to continue through the second quarter of 2023.

Robinson said the recent infill drilling work has resulted in a marked increase to the in-situ lithium grade. The SWA samples were taken from a pre-existing well drilled in the central-eastern portion of the project area.

He explained that: “In our experience, the grade of lithium in brine used for direct lithium extraction (DLE) has a meaningful impact on both capital expenditures and operating costs in connection with the extraction process, so a higher grade typically results in lower overall costs and should have a positive effect on project economics in the forthcoming (prefeasibility study).”

Shares of Standard Lithium surged 15.3% by 12:10 p.m. EDT. The lithium developer has a market capitalization of $922 million.