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TICKERS: GRD; GRDAF

Lithium Explorer Expands Land Package, Grows Resource
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The accretive acquisition just closed, but the company already defined a resource on its new 8,500 hectares, noted a Red Cloud Securities report.

Grounded Lithium Corp. (GRD:TSX.V; GRDAF:OTCQB) expanded the land package at its flagship Kindersley lithium brine project in Saskatchewan by 8,498 hectares (8,498 ha) with the purchase, now closed, of 33 sections, reported Red Cloud Securities mining analyst Koby Kushner in a March 17 research note. Grounded now holds the mineral rights on 86,229 ha of property in the province.

"This new acquisition has turned out to be accretive as the company was quickly able to define a resource on the new ground by leveraging its knowledge of the surrounding project area," Kushner wrote. "It is also a testament to management's ability to move fast."

The Alberta-based lithium explorer offers investors an attractive potential return. The difference between its current share price, of CA$0.36, and Red Cloud's target price on it, CA$0.90 per share, represents a possible 150% gain. Grounded is a Buy.

Kushner presented the key information about Grounded Lithium's property transaction.

Boost to Project Resources

The acquisition added about 482,000 tons of lithium carbonate equivalent (LCE) to Kindersley's Inferred resources and took the project's total resources to about 4,200,000 tons (4.2 Mt) of LCE, noted Kushner. This represents a 13% resource growth.

Accordingly, Red Cloud increased its middle case resource estimate to 4.7 Mt of LCE, up from 4.2 Mt. (Its upper case, unchanged, is about 6.5 Mt LCE.)

Low Price Paid

Also of note, Kushner wrote, is that Grounded Lithium bought the land "on the cheap" for CA$425,000. This equates to about CA$50 per hectare, about half of what other land in the area has sold for. Also, the added LCE resources imply an acquisition price of about CA$0.88 per ton of LCE, which is much lower than the company's current valuation of CA$5.50 per ton of LCE.

Leader of the Pack

Kushner pointed out that Grounded now owns the largest lithium resource in Saskatchewan, having surpassed that of Prairie Lithium with its recent land acquisition.

Further, Prairie Lithium is being taken out for CA$70 million (CA$70M), nearly three times Grounded's current market cap of CA$25.1M.

What to Watch For

Grounded has several possible stock-moving events expected this year, Kushner noted, as it advances Kindersley toward commercialization. Currently, the company is seeking direct lithium extraction partners.

"The winning technology will form the basis of [Grounded's] maiden preliminary economic assessment in Q2/23 and also inform the pilot plant in Q4/23," wrote Kushner.

Ongoing catalysts include more land buys and more lithium well testing.


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Disclosures:
1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Grounded Lithium Corp. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

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Disclosures For Red Cloud Securities, Grounded Lithium Corp., March 17, 2023

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