Arizona clears third pad at Prairie lithium project as it progresses 6000tpa LCE operation

Pad #3 at Arizona’s Prairie project cleared and drilling to commence
Arizona Lithium on track for 6000tpa LCE as outlined in last year’s PFS
Company has target for a total of 12 Pad’s to hit a 24,000tpa LCE production target

Special Report: Construction of Pad #3 has been completed at Arizona Lithium’s Prairie brine project and drilling will commence on it in the coming weeks, as the company eyes a 6000tpa LCE production target.

The pad clearing and well drilling is being completed at pace, with Arizona Lithium (ASX:AZL) recently receiving additional cash from a non-core acreage sale that raised ~$11m in non-dilutive capital.

AZL’s Prairie lithium-brine project is nestled within the Williston Basin of Saskatchewan, Canada, one of the world’s top mining friendly jurisdictions with easy access to key infrastructure including electricity, natural gas, fresh water, paved highways and railroads.

AZL looking to expand

Clearing of Pad #3 will be the last of three pads detailed in the December 2023 preliminary feasibility study, each targeting production of 2000 tonnes per annum of lithium carbonate equivalent.

Three pads cleared means that AZL has line of sight to 6000tpa LCE at Prairie, with each pad coming in at a net present value (NPV) of ~ US$150m.

With the first of three brine pads already drilled, AZL is on target with its de-risking scale-up plan to bring online one pad at a time for early cashflows.

Once the first three pads are constructed and producing, the near-term producer plans to quadruple that to twelve pads to get to a total steady state number of 24,000tpa LCE once in production.

“Having Pad #3 cleared completes our short-term goal of identifying three pad locations for lithium production,” AZL MD Paul Lloyd says.

“We are excited to keep progressing towards our short, medium and long term goals with the ultimate goal being 24,000tpa of LCE production.

“It’s a win for shareholders that we are able to use funds from a non-dilutive acreage sale that raised the company US$11m.”

Battery grade

Prairie is one of two massive lithium resources AZL is planning to develop as the lithium cycle turns alongside its Big Sandy project in Arizona.

Prairie is well advanced, with AZL already proving it can deliver a battery grade lithium carbonate product from the Prairie brine, with the first commercial production well at Pad #1 completed alongside drilling to create disposal and brackish water source wells.

The ASX-listed company is targeting lithium production in 2025 using direct lithium extraction technology, with its late 2023 PFS indicating the project would operate at costs of just US$2819/t on an LCE basis, with total capex for its first phase of US$290m and long-term pricing of US$21,000/t, a figure based on comprehensive analysis by “Mr Lithium” Joe Lowry’s consultancy Global Lithium.

The first pad has already been approved for a $21.6m investment incentive from the Saskatchewan Government’s Oil & Gas Processing Investment Incentive Program, which will provide royalty credits over Prairie’s first three years in production.

This article was developed in collaboration with Arizona Lithium, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.