Arizona Lithium raises $11m to advance Prairie towards commercial production

Arizona Lithium sells non-core Prairie project acreage to Homestead Energy for $11m
Sale includes data associated with the project acreage
Proceeds will be used project towards commercial lithium production in 2025

Special Report: Arizona Lithium’s coffers are now bulging with an additional $11m through the sale of non-core acreage and data from the Prairie lithium brine project in Saskatchewan, Canada to Homestead Energy.

Importantly for the company, the ~40,000 acres of Crown Mineral Title and ~11,000 acres of Freehold Mineral Title sold to Homestead – a privately owned and operated oil and gas company – represents just a small, undeveloped part of the 390,000 acres covered by the Prairie project.

Arizona Lithium (ASX:AZL) adds that the sale of the non-core acreage will not impact its near-term development plan for the project where the first disposal well was recently installed on Pad #1.

Prairie currently has a resource of 6.3Mt lithium carbonate equivalent including 4.5Mt LCE in the higher confidence indicated category and is winding its way towards lithium production next year.

The sale and ongoing development of Prairie comes as Rio Tinto (ASX:RIO) confirmed rumours that it had made a non-binding takeover offer for big producer Arcadium Lithium (ASX:LTM).

Sale acreage and data coverage area (outlined in blue). Pic: Arizona Lithium

Advancing development

“The sale of non-core acreage and data is an effective and efficient capital management tool as it provides $11 million to the company without diluting shareholders,” managing director Paul Lloyd said.

“The land component of the transaction is only a small part of our existing 390,000 net acres we held prior to the transaction.

“Proceeds from the transaction will be used to advance the development of our core acreage and undertake more work towards the stated goal of commercial production at the Prairie lithium project in 2025.”

Transaction details

The sale consists of three separate agreements – the sale of the non-core acreage, the sale of the associated data, and an agreement to hold the funds in escrow.

AZL notes that the sale proceeds are divided equally between the sale of the acreage and for the licensed data, which includes any new data created or acquire from signing to December 31, 2025.

It added that the funds will be held in escrow until both companies give written notice to the escrow agent.

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.