Standard Lithium and Lanxess Finalize Plan for First Commercial Lithium Project in Arkansas
February 24 2022 - 7:00AM
Standard Lithium Ltd. (“
Standard
Lithium” or the “
Company”) (TSXV: SLI)
(NYSE.A: SLI) (FRA: S5L), an innovative technology and lithium
project development company, has reached an agreement (the
“
Agreement”), dated February 23, 2022, with its
strategic partner, LANXESS Corporation
(“
Lanxess”), that streamlines and expedites the
plan for development of the first commercial lithium project in
Arkansas, which is to be constructed at an operational Lanxess
facility in El Dorado, Arkansas (the “
Project”).
Under the Agreement, Standard Lithium will control all development
of the Project leading up to and including the completion of the
Front End Engineering Design (“
FEED”) study.
Standard Lithium will hold, at a minimum, a 51% majority equity
stake in the Project and may retain as much as 100% of the Project.
The Company will also retain 100% ownership of its South West
Arkansas Project, all its proprietary extraction technologies,
relevant intellectual property and know-how.
Robert Mintak, CEO of Standard Lithium
commented, “This agreement builds upon the successful working
relationship that has been established between the companies. By
entering into this Agreement, Standard Lithium takes ownership of
the Project and its development timelines with a clear path towards
delivering the first new commercial lithium production in the USA
in over 50 years.1 We have already begun the process of engaging
and integrating the strategic team members to make this project a
success. With the recent investment from our largest
shareholder, Koch Strategic Platforms, we are fully funded to
complete all planned Project milestones leading to a Definitive
Feasibility Study, which is expected to be completed in Q4
2022”.
Key Highlights:
- Standard Lithium will form an
initially wholly-owned company (“Project Company”)
that owns 100% of the Project during pre-FEED and FEED engineering
studies (see news release dated January 20th, 2022). The FEED
engineering will be used to produce a NI43-101 Definitive
Feasibility Study (“DFS”) in Q4 2022;
- Lanxess will, via a series of
commercial agreements, provide the brine supply for the Project,
the Project site lease, and rights of way, infrastructure, and
other services for the Project;
- Standard Lithium will provide a
market fee-based license to the Project Company of its suite of
intellectual property;
- Standard Lithium is able to utilize
its intellectual property, extraction technology and know-how at
its 100% owned South West Arkansas Project, certain other sites in
Arkansas and at all project sites outside of Arkansas, and will
maintain control and ownership over the future development of its
IP portfolio; and,
- Lanxess is obliged to support
development of the Project and upon completion of a DFS, has the
option to acquire an equity interest in the Project Company of up
to 49% and not less than 30%, at a price equal to a ratable share
of SLL’s aggregate investment in the Project Company.
If Lanxess acquires an ownership interest:
- The parties will share the costs of
financing construction of the Project on a ratable basis; and,
- Lanxess will have the right to
acquire some, or all of the lithium carbonate off-take produced at
the commercial plant at market-based terms less a handling
fee.
If Lanxess does not acquire an ownership
interest:
- Standard Lithium will own 100% of
the Project including customary dividends, distribution, or similar
rights;
- Standard Lithium can elicit bids
from other interested parties to buy up to 49% of the Project
Company; and,
- Lanxess will have the right to
acquire some, or all of the lithium carbonate off-take produced at
the commercial plant at a price of market minus up to 20%, to be
agreed by Lanxess and Standard Lithium and taking into
consideration several key commercial agreements (including the
costs of brine supply and disposal for the Project, the Project
site lease cost and rights of way, infrastructure, and other
services for the Project).
The parties have also agreed that development of
the second and third projects on the Lanxess properties will be on
a joint basis and that the parties will perform the same roles
using similar contractual structures as the first Project. Lanxess
will also have the right to purchase the lithium carbonate off-take
from the additional projects upon market-based terms to be agreed
by Lanxess and Standard Lithium, taking into consideration other
commercial agreements required for their development (e.g. site
leases, brine supply/disposal etc.).
AdvisorsStifel Nicolas Canada
Inc. acted as financial advisor to Standard Lithium during
negotiation of this Agreement.
About Standard Lithium
Ltd.Standard Lithium is an innovative technology and
lithium development company. The Company’s flagship project is
located in southern Arkansas, where it is engaged in the testing
and proving of the commercial viability of lithium extraction from
over 150,000 acres of permitted brine operations. The Company
operates its first-of-a-kind industrial-scale direct lithium
extraction demonstration plant at Lanxess’s south plant facility in
southern Arkansas. The demonstration plant utilizes the Company’s
proprietary LiSTR technology to selectively extract lithium from
Lanxess’s tail brine. The demonstration plant is being used for
proof-of-concept and commercial feasibility studies. The scalable,
environmentally friendly process eliminates the use of evaporation
ponds, reduces processing time from months to hours and greatly
increases the effective recovery of lithium. The Company is also
pursuing the resource development of over 30,000 acres of separate
brine leases located in southwest Arkansas, referred to as the
South West Arkansas Lithium Project, and approximately 45,000 acres
of mineral leases located in the Mojave Desert in San Bernardino
County, California.
Standard Lithium is jointly listed on the TSX
Venture Exchange and the NYSE American under the trading symbol
“SLI”; and on the Frankfurt Stock Exchange under the symbol “S5L”.
Please visit the Company’s website
at http://www.standardlithium.com.
On behalf of the Board of Standard Lithium Ltd.Robert Mintak,
CEO & Director
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This news release may contain certain
“Forward-Looking Statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities laws. When used in this news
release, the words “anticipate”, “believe”, “estimate”, “expect”,
“target, “plan”, “forecast”, “may”, “schedule” and other similar
words or expressions identify forward-looking statements or
information. These forward-looking statements or information may
relate to expected development of the Project and future phases,
the timeline for completion of the DFS, negotiation of definitive
documentation with Lanxess, accuracy of mineral or resource
exploration activity, reserves or resources, regulatory or
government requirements or approvals, the reliability of third
party information, continued access to mineral properties or
infrastructure, fluctuations in the market for lithium and its
derivatives, changes in exploration costs and government regulation
in Canada and the United States, and other factors or information.
Such statements represent the Company’s current views with respect
to future events and are necessarily based upon a number of
assumptions and estimates that, while considered reasonable by the
Company, are inherently subject to significant business, economic,
competitive, political and social risks, contingencies and
uncertainties. Many factors, both known and unknown, could cause
results, performance or achievements to be materially different
from the results, performance or achievements that are or may be
expressed or implied by such forward-looking statements. The
Company does not intend, and does not assume any obligation, to
update these forward-looking statements or information to reflect
changes in assumptions or changes in circumstances or any other
events affections such statements and information other than as
required by applicable laws, rules and regulations.
1 See
https://pubs.usgs.gov/periodicals/mcs2021/mcs2021-lithium.pdf
For further information contact:
LHA Investor Relations
David Barnard
+1 415-433-3777
standardlithium@lhai.com
info@standardlithium.com
Twitter: @standardlithium
LinkedIn: https://www.linkedin.com/company/standard-lithium/
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