Standard Lithium is working with LANXESS in a phased approach as per terms of a binding memorandum of understanding, to develop commercial opportunities related … Under the terms of the offering, the Vancouver-based development company issued 15.6 million common shares at a price of $2.20 each. On average, I estimate those projects have been pushed back 18–24 months due to a lack of funding, and more recently, uncertainty around a critical presidential election (the less mining-friendly candidate won) and social unrest/protests in Chile. Note, the current share price is C$0.91. We're doing sophisticated chemistry to produce a chemical that goes into batteries. Compare up to five different prices over a selected period of time in Price Book. Peter Epstein of Epstein Research outlines the latest from this firm operating in Nevada, which is set to release a PFS in the fourth quarter. Prices for lithium, a key metal used in the production of batteries, soared amid a demand shock while the drive to electrify transportation gathered pace. His background is in company and financial analysis. E-mobility is one possible way to contribute to a more sustainable future. Standard Lithium Arranges C$5 Million Convertible Loan Financing Source: The Critical Investor for Streetwise Reports (11/05/2019). Resources: A New Gold Prospect + Manganese Trading + Li Extraction Technology, Source: Peter Epstein for Streetwise Reports (12/11/2019), Standard Lithium Arranges C$5 Million Convertible Loan Financing, Source: The Critical Investor for Streetwise Reports (11/05/2019), PGE Projects in Brownfields of Montana and Yukon Raise Expectations for Junior Miner, Source: Maurice Jackson for Streetwise Reports (10/29/2019), Standard Lithium in Final Stages of De-risking New Recovery Method; Giant JV Partner Could Fully Fund Capex When Successful, Source: The Critical Investor for Streetwise Reports (09/25/2019), First Cobalt, Last Man Standing in North American Cobalt Sector, Source: Peter Epstein for Streetwise Reports (09/05/2019), Cypress Development Makes Lithium Flow Sheet Enhancements, Source: Peter Epstein for Streetwise Reports (09/04/2019), Lithium Explorer Advances Nevada Project, To Publish Prefeasibility Study in Q4/19, Standard Lithium Remains on Course to Production in 24–30 Months, Source: Peter Epstein for Streetwise Reports (08/29/2019). Successful operation of the technology at pre-commercial continuous scale has directly extracted lithium from brine in Arkansas and produced a purified, concentrated intermediate product (LiCl solution) which has been converted to better than battery … PGE Projects in Brownfields of Montana and Yukon Raise Expectations for Junior Miner Source: Maurice Jackson for Streetwise Reports (10/29/2019). Find all your saved comparisons here. That's a critical part of the whole story. You can enter a maximum of 5 recipients. The environmentally friendly process eliminates the need for evaporation ponds and reduces processing time from 12–18 months to a matter of hours, while, at the same time, greatly increasing lithium recovery rates. [ER] is not responsible under any circumstances for investment actions taken by the reader. LANXESS expects initial findings with regard to … Peter Epstein of Epstein Research profiles a company that is reinventing itself as moderately diversified battery metals company. Germany-based Lanxess operates three plants for the production of bromine products in El Dorado. The Critical Investor delves into a lithium company's financing and its implications. According to its spring 2019 prospectus filing, Standard will own at least 30% of project economics and perhaps up to 40%, depending on various factors that have not been made public. They have extensive and sophisticated sales networks to sell specialty chemical products. Eighteen months ago it was closer to 10x. By NOT falling behind, Standard has caught up to Lithium Triangle projects, and could be in production ahead of the pack. Standard Lithium Ltd., a leading next-generation lithium producer, has reportedly signed a Memorandum of Understanding (MoU) with a global specialty chemicals industry major LANXESS Corporation and its US affiliate - Great Lakes Chemical Corporation. But fresh production from a plethora of new projects has since halted the gains, with prices having slipped lower in recent months. Through recent work, the company determined the best methods for its requisite lithium recovery, concentration and leaching processes. An agreement with Glencore enabling advancement of recommissioning and expansion plans for the junior's cobalt refinery makes First Cobalt a good bet for investors, according to Peter Epstein of Epstein Research. Standard Lithium installed a direct lithium extraction demonstration plant at Lanxess’ South Plant facility in southern Arkansas in December 2019. Building demonstration plant at Lanxess Project site After Standard Lithium (TSXV: SLL) (OTCQX: STLHF) (FRA: S5L) managed to arrange a C$5M (US$3.75M) convertible loan and guarantee agreement with Lanxess on October 30, 2019, management hasn’t been sitting on its hands. Therefore, the pro forma Enterprise Value (EV) [market cap + debt – cash] with shares currently at C 0.91 is about C$82 million. If true, the company is pretty far along in having meaningfully de-risked the project. That, or be a cornerstone order in future capital raises. On October 30, Standard Lithium Ltd. (TSXV: SLL) (OTCQX: STLHF) obtained a C$5 million five-year loan, at just 3% interest from strategic partner Lanxess. Image courtesy of Standard Lithium. All rights reserved. Readers should take note of EBITDA margins among producers, averaging 29%. COPYING AND DISTRIBUTING ARE PROHIBITED WITHOUT THE PERMISSION OF THE PUBLISHER, All Steel First prices, news and market analysis can be found here on www.metalbulletin.com. Standard Lithium has paid an initial US$3,000,000 reservation fee to LANXESS to secure access to the tail brine, with additional fees and obligations in the future subject to certain conditions. Learn more about Fastmarkets’ lithium pricing methodology and read the latest lithium price spotlight here. Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. For now, Standard has gathered the data to underpin production costs. 2) The following companies mentioned in the article are billboard sponsors of Streetwise Reports: None. Standard Lithium and global specialty chemical company Lanxess AG have signed both a binding Memorandum of Understanding (MOU) and a general Joint Venture (JV) term sheet agreement for a contemplated commercial production of battery-grade lithium compounds from brine extracted from the Smackover Formation in south Arkansas. In the chart below, one can see that a sample of lithium producers is trading at an average EV to trailing 12-month revenue multiple of 7.5x. Lithium Explorer Advances Nevada Project, To Publish Prefeasibility Study in Q4/19 Source: Streetwise Reports (08/30/2019). Want to be the first to know about interesting, Standard Lithium Demo Plant Operating Soon, First Production in 2022, Standard Lithium Ltd. (SLL:TSX.V; STLHF:OTCQX). Standard Lithium in Final Stages of De-risking New Recovery Method; Giant JV Partner Could Fully Fund Capex When Successful Source: The Critical Investor for Streetwise Reports (09/25/2019). About Standard Lithium Ltd. Standard Lithium said Tuesday that it has completed a successful start-up of its industrial-scale Direct Lithium Extraction Demonstration Plant at Lanxess’ South Plant facility near El Dorado. The Lanxess Smackover lithium project is expected to produce up to 209,000 tonnes of battery-grade lithium a year. Finished lithium products will be used internally for testing, and, more importantly, will provide Lanxess proof of concept for its final investment decision. Arkansas is an advantageous place to launch their technology. All lithium carbonate, lithium hydroxide and lithium spodumene prices are available in our Battery Raw Materials Market Tracker. Cypress Development Makes Lithium Flow Sheet Enhancements Source: Peter Epstein for Streetwise Reports (09/04/2019). Commercial production is expected to commence in 2022 with full phase 1 production of 9,700 tonnes Lithium Carbonate Equivalent (LCE)/year (2,910 tonnes LCE net to Standard) reached in 2023. The chart below shows revenue scenarios for 2024 (after phases 1 and 2 are fully online). Peter Epstein is the founder of Epstein Research. New results include long, high-grade polymetallic intervals. Standard Lithium has developed an innovative method for the extraction of high-purity lithium directly from brine. For the past year, I've been saying that the company should be able to reach commercial production with fairly minimal equity dilution. Under certain circumstances, Standard's interest in the project and its economics can be increased from 30% to up to 40%. Millennial Lithium: Full Speed Ahead Source: Peter Epstein for Streetwise Reports (01/22/2020). The loan represents another important milestone and clear vote of confidence in Standard Lithium, the JV project in southern Arkansas, and a very impressive management and technical teams led by Robert Mintak and Dr. Andy Robinson. Then, management believes a final JV agreement with Lanxess Corp. will be signed. In working on a broad, indicative valuation range, I assume 20 million shares get issued between now and year-end for a pro forma total of ~117,500,000. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. Peter Epstein of Epstein Research provides an update on a company with a lithium project in Arkansas. Now might be a great time to be looking at lithium juniors, some of which could see a considerable bounce back in their share price along with lithium prices. Although a run-rate of 100-150 tonnes LCE/year is not much by commercial standards, it's impressive as far as pilot plants go. The Company is also pursuing the resource development of over … Standard Lithium’s plan is to start with what’s already there: in this case, bromine waste brine. When fully commissioned, the DP will continuously process an input "tail-brine" flow of ~50 gallons per minute. At a 5x EV/2024 revenue multiple—on revenue from selling lithium @ US$12,000/tonne—the indicative per-share value discounted back four years is C$2.45. Southern brine plant at the Lanxess project in Arkansas. We're at the point where we're going to be the U.S. hub for it. The direct lithium extraction demonstration plant is expected to produce up to 150 tonnes of lithium a … The author is wholly responsible for the validity of the statements. Drilling Confirms, Extends PGE Mineralization at Montana Project Source: Streetwise Reports (01/22/2020). Source: Peter Epstein for Streetwise Reports (01/22/2020), Drilling Confirms, Extends PGE Mineralization at Montana Project, A.I.S. .The key element is our growing partnership with German specialty chemicals giant Lanxess, a company with 73 chemical plants around the world employing tens of thousands. Get a sample report here. Either way, it seems Standard Lithium is positioned well these days. The Company is also pursuing the resource development of over … Standard could now be just two years from initial production of lithium products. You can opt out of these emails at any time. Perhaps half of the projects on the drawing board, (PEA-stage or further advanced) 2–4 years ago are no longer serious contenders. Standard Lithium said it paid an initial $3m reservation fee to Lanxess to secure access to the tail brine, with additional fees and obligations in the future subject to certain conditions. Standard Lithium Remains on Course to Production in 24–30 Months Source: Peter Epstein for Streetwise Reports (08/29/2019). 1) Peter Epstein's disclosures are listed below. A complete list of all Fastmarkets MB's metal, steel and scrap prices, contained within our pricing analysis tool, Price Book. The pair aims to eventually produce lithium — a key component of electric vehicle batteries — on a … My only issue with Standard Lithium is the valuation at $229M - only owning only 50% (once Lanxess earns in) of the project. I think E3 Metals (EEMMF) provides much larger upside at … Get the Latest Investment Ideas Delivered Straight to Your Inbox. As can be seen, the range of per-share values is wide; from C$1.30 to C$5.14. How much revenue (net to Standard Lithium) might be possible upon achievement of phases 1 and 2? The goal of the agreement, which may lead to a joint venture, is to develop commercial opportunities related to the production, marketing and sale of battery grade lithium products. Find all your bookmarked prices here. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Standard Lithium’s proprietary LiSTR Direct Lithium Extraction technology will be used to extract lithium from waste brine (tail brine) that is a byproduct of existing bromine production facilities run by Lanxess in south Arkansas, to produce battery-quality lithium chemicals. On February 26, 2020, the company announced that an ongoing capital raise, intended to raise C$6M, was closed at … British-native, Canadian resident (and Burnley fan) Andy Robinson is the president and chief operating officer of Standard Lithium, the Vancouver company working with Lanxess … [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Standard Lithium, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. If Lanxess is willing to invest today, at PEA-stage, with dismal lithium market sentiment, I imagine they might be willing to invest again in 2020 or 2021. The technical and economic feasibility of the project is under examination. At the time this interview was posted, Peter Epstein owned shares of Standard Lithium, and the Company was an advertiser on [ER]. Germany-based Lanxess operates three plants for the production of bromine products in El Dorado. All rights reserved. Standard Lithium is currently up 2.35 per cent to $2.61 per share; Standard Lithium (LSS) has raised more than C$34.5 million to support ongoing work programs at its Lanxess Project in southern Arkansas. Standard is trading at 20% of its 30% share of the after-tax NPV. As can be seen, it's a fairly significant structure. The bromine is extracted from the brine produced at the site, which also contains lithium. Under the proposed terms of the joint venture, Lanxess would contribute lithium extraction rights and grant access to its existing infrastructure to the joint venture. The DP is assembled on-site; commissioning started in December. The loan is convertible into 6,251,250 common shares, with 3,125,625 three-year warrants attached. Lanxess … A pilot facility was set up on the plant premises and commissioned at the beginning of March 2020. In addition, the amount of additional equity capital required to reach that critical point could be only C$20 million. VANCOUVER, British Columbia, Dec. 18, 2020 (GLOBE NEWSWIRE) -- Standard Lithium Ltd. 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