E3 Lithium [ETMC-TSXV, EEMMF-OTC, OU7A-FSE] shares were active Friday after the company said it has started drilling its first lithium evaluation well in Alberta. It said the well will be completed in E3â€™s Clearwater Project area, east of the town of Olds, Alberta.
Drilling operations are expected to be completed by mid-July, after which a service rig will be moved onsite to commence testing of the formation to verify brine chemistry and flow rates.
E3 shares advanced on the news, rising 3.9% or 10 cents to $2.64 on volume of 431,190. The shares are currently trading in a 52-week range of $3.49 and $1.59.
E3 is a company that sees opportunity in Albertaâ€™s depleted oil and gas reserves. The technology it is testing will, if successful, extract lithium from brine in old wells, material that could eventually find its way into the batteries that power electric vehicles.
Brines (in salt ponds) and spodumene (hard rock) represent the two main sources of commercial lithium production.
E3 says it has developed Direct Lithium Extraction (DLE) technology that connects conventional oilfield and lithium processing, unlocking Albertaâ€™s previously untapped lithium resources. The companyâ€™s goal is to commercialize its global-scale lithium resource and deliver zero carbon emissions, battery grade, lithium products to the growing electric vehicle supply chain.
Back in April, 2021, the company said it had received a government grant of $1.8 million from Alberta Innovates that will assist in funding its pilot plant. This funding, the company said, would support the demonstration of E3â€™s technology by progressively scaling it up from the lab prototype to a field pilot.
The company controls 250,000 acres in south central Alberta, and claims to have outlined 7.0 million tonnes of inferred lithium carbonate equivalent. It hopes to produce 20,000 tonnes of battery-quality lithium monohydrate annually through a multi-step process that uses ion exchange to extract lithium out of oil and gas brine.
The lithium is then further refined, fed into electrolyzers to produce an even more pure lithium hydroxide solution, crystallized into lithium hydroxide salts and finally ready to be transported for sale.
E3 has said it has achieved proof of concept and just needs to achieve proof of scale.
Meanwhile, on Friday, the company said lithium concentrations and production testing will help to validate E3â€™s geological model and support upgrades of its resources to indicated and measured. This work will support commercial development and the basis for the pre-feasibility study.
â€œWe are very excited about drilling and completing the first well in Alberta specifically targeting lithium,â€™â€™ said E3 CEO Chris Doornbros