Standard Lithium’s March 31 cash at $15.7 million, shares up

Standard Lithium Ltd. [TSXV-SLI; FSE-S5L] reported its financial and operating results for the fiscal third quarter ended March 31, 2024.

“In Q3, Standard Lithium continued to execute on our strategic plan, responsibly and efficiently advancing our projects,” stated Robert Mintak, CEO. “While the lithium sector has experienced challenges over the past year, we see positive indicators pointing toward stability, and the fundamentals of the lithium market remain strong. This presents a timely moment to showcase our strengths: a strong asset base, favourable jurisdictions and an industry-leading direct lithium extraction platform.

“This transformative partnership with Equinor, a global energy company and recognized leader in renewables and low-carbon solutions, validates our strategic path to leverage our Smackover resources and become a globally significant contributor within the lithium market. It strengthens our finances, provides essential expertise, manages risk and accelerates our progress towards this goal, unlocking long-term value for our shareholders.”

Salah Gamoudi, chief financial, stated: “Since joining the company, we’ve prioritized financial efficiency, by securing capital that was minimally dilutive to our shareholders, but allowed us to ensure project continuity throughout our pursuit of securing a strategic partnership. This approach perfectly aligns with the transformative partnership we’ve secured with Equinor. It enables us to advance our projects in the most value-accretive way for our shareholders while minimizing dilution, cost of capital and meaningfully lowers future capital requirements. To further take advantage of this momentum, we recently established an office in Austin, Texas. This move enables us to attract top energy sector talent and allows us to best serve our field and plant employees and communities.”

Highlights of the third fiscal quarter ended March 31, 2024: Installed the first commercial-scale direct lithium extraction (DLE) column in partnership with Koch Technology Solutions (KTS). The company installed a commercial-scale DLE column at its demonstration plant near El Dorado, Arkansas. The column is a Li-Pro lithium selective sorption (LSS) unit supplied by KTS. The company intends to test and derisk the LSS unit for commercial use at its Smackover projects.

Advanced the South West Arkansas project (SWA) with engineering firm selection. The company selected Ausenco Engineering Canada ULC to lead the front-end engineering design (FEED) and the definitive feasibility study (DFS). The company is now progressing SWA through FEED and DFS.

The company continued an at-the-market offering program during the fiscal third quarter, issuing a total of 1,284,300 common shares on the TSX Venture Exchange and 6,609,000 common shares on the NYSE American LLC, providing gross proceeds of $2.4-million and US$9.5-million, respectively. For the nine months ended March 31, 2024, the company issued 1,384,400 common shares on the TSX Venture Exchange and 7,936,159 common shares on the NYSE American LLC, providing gross proceeds of $2.7-million and US$12.3-million, respectively.

Cash and cash equivalents and working capital of $15.7 million and $7.7 million, respectively, as of March 31, 2024. The company has no term or revolving debt obligations as of March 31, 2024.

Highlights subsequent to the third fiscal quarter ended March 31, 2024: The company announced outstanding results from successful commissioning of first commercial-scale DLE column at demonstration plant near El Dorado, Arkansas. The company reported that during a representative period of continuous operation, the commercial-scale column exceeded design parameters, achieving an average lithium recovery of 97.3% and rejecting, on average, over 99% of key contaminants. To the best of the company’s knowledge, the Li-Pro LSS unit is the only commercial-scale DLE unit operating in North America.

Equinor acquired interest in South West Arkansas and East Texas projects for total project-level investment of $160-million. On May 7, 2024, Equinor ASA, an arm’s-length party, acquired an interest in two Standard Lithium subsidiaries, one of which holds Standard Lithium’s South West Arkansas project and the other the East Texas properties. Pursuant to the terms of the transaction, Equinor acquired a 45-per-cent interest in each of the subsidiaries for an initial cash payment of US$30 million to Standard Lithium and the commitment to invest up to an additional US$130 million as follows: Equinor to solely finance the first US$40 million of development costs at the South West Arkansas project, after which all additional capital expenditures will be financed on a pro rata basis.

Equinor to solely finance the first US$20 million in exploration and development costs at the East Texas properties, after which all additional capital expenditures will be funded on a pro rata basis.

Standard Lithium will receive up to US$70 million in milestone payments associated with the South West Arkansas project and East Texas subject to final investment decisions being made by certain dates.

The company’s interim financial statements and management’s discussion and analysis for the third quarter 2024 ended March 31, 2024, are available on the company’s website and on SEDAR+ and EDGAR.

Standard Lithium is a leading near-commercial lithium development company focused on the sustainable development of a portfolio of lithium-brine-bearing properties in the United States. The company’s signature projects, the Phase 1A project and the South West Arkansas project, are located on the Smackover formation in southern Arkansas, a region with a long-standing and established brine processing industry. The company has also identified a number of highly prospective lithium brine project areas in the Smackover formation in East Texas and began an extensive brine leasing program in the key project areas. In addition, the company has an interest in certain mineral leases located in the Mojave Desert in San Bernardino County, California.

In early trading, shares of Standard Lithium gained $0.42 to $2.59.