E3 shares rally on lithium production update

E3 Lithium Ltd. [ETL-TSXV, EEMMF-OTC, OU7A-FSE] shares rallied Monday after the company released an update from its Clearwater project in Alberta, saying it has successfully produced lithium carbonate. It described the development as the last major step in a conventional process before conversion to battery quality lithium hydroxide monohydrate (LHM).

The shares advanced on the news, rising 7.1% or 26 cents to $3.93 on volume of 279,740. The shares are currently trading in a 52-week range of $3.68 and $1.74.

E3 is a company that sees opportunity in Alberta’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 Alberta’s previously untapped lithium resources. The company’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.

Commissioning of its DLE field pilot plant is progressing, the company said Wednesday. It anticipates beginning operations soon and will update the market as soon as commissioning is complete.

The company previously outlined a measured and indicated resource of 16 million tonnes of lithium carbonate equivalent (LCE) as well as an inferred resource of 900,000 tonnes of inferred resources in Alberta.

On Wednesday the company said the test work used concentrate generated from brines located at E3 Lithium’s Clearwater Project Area, produced during the DLE testing completed in preparation for the pilot plant.

E3 said it has engaged a major lithium refining technology and equipment vendor to develop the downstream lithium production processes in preparation for the upcoming pre-feasibility study. The testing was conducted to treat a sample of concentrate, or eluate, produced by DLE technology.

It said the test program has successfully progressed through the coarse purification and concentration phases, and the eluate has been converted to lithium carbonate. The final steps include further downstream polishing to achieve the desired purity and then conversion of the carbonate into battery-grade LHM.

As the pilot plant produces more concentrates, E3 Lithium will be creating more carbonate and LHM for commercial development purposes.

“Producing high quality carbonate from our Leduc brines with a major equipment vendor is an incredibly exciting milestone for the company,’’ said E3 President and CEO Chris Doornbos. “While downstream lithium refining processes are already commercially operating, demonstrating the success of these processes on E3 Lithium’s brine provides more certainty for our commercial processes.

E3 is positioned to meet global demand for lithium after being awarded $27 million from the government of Canada’s Strategic Investment Fund in 2022. The company also executed a US$5 million strategic agreement with Imperial Oil Ltd. [IMO-TSX], representing the first investment in lithium from a global energy industry leader.