Standard Lithium stock surges after finding ‘highest grade brine’ in Arkansas

One sample from the south west Arkansas project returned 581 mg/L lithium.

Standard Lithium’s (TSXV: SLI) resource definition work at its South West Arkansas project has returned sampling results similar to those seen in Texas. One sample had 581 mg/L lithium, which the company said, to its knowledge, represents the “highest confirmed grade” in Arkansas brines.

In March, 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/L lithium.

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

Robinson said the preliminary economic assessment (PEA) for the SWA project used a conservative assessment of the lithium brine grades across the project area, yet it still yielded “very attractive project economics” with an after-tax net present value of $1.97 billion and internal rate of return at 32% (using an 8% discount rate).

The lithium brine resource, which was last updated in 2021 to consider the potential unitized area of production, contains a total of 1,195,000 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 preliminary feasibility study (PFS), the company kicked off a drilling program at SWA to gather the necessary resource data to update on the project economics. The drilling, which will include both new and pre-existing wells, is expected to continue through the second quarter of 2023.

There were approximately 2,444 pre-existing already drilled into the subsurface in the general SWA project area, most of which were deep enough to penetrate the upper Smackover formation.

The recent infill drilling work to further define the lithium resource, according to Robinson, has resulted in a marked upside 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.

“In our experience, the grade of lithium in brine used for direct lithium extraction 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 PFS,” Robinson said.

Shares of Standard Lithium surged 15.3% by 12:10 p.m. EDT. The lithium developer has a market capitalization of C$922 million ($683 million).