Lithium Tech Co. Selected for Next Phase of Chile Project

Mining technology company Lithos Group Ltd. (LITS:CBOE.CA;LITSF:OTCMKTS;FSE:YU8;WKN:A3ES4Q) has been selected by the Chilean National Mining Company (ENAMI) for the next phase of its direct lithium extraction project.

ENAMI had issued a global request for information (RFI) for the project. Lithos showcased the application of its AcQUA™ technology — which allows lithium to be extracted from brine without using water-intensive, environment-damaging evaporation ponds — for the High Andean Salt Flats in the Atacama region.

Results from laboratory tests with brine samples from the project site will be evaluated, along with those of a select few vendors who were invited to ENAMI's technology screening process.

Lithos' "proprietary technology, which eliminates the need for traditional evaporation ponds, aligns with Chile's efforts to minimize environmental impacts and enhance resource efficiency," Lithos said in a release. "Lithos Technology is honored to contribute to this significant project, which aligns with its strategic objectives and the global movement toward sustainable mining practices."

Headquartered in Denver, Colorado, Lithos Group aims to "become the global standard in economically efficient, sustainable lithium production," the company said.

AcQUA™ spans the whole value chain from the conditioning and pretreatment of raw brines, the primary bottleneck, through the direct lithium extraction (DLE) phase to the polishing and purification of battery-grade lithium feedstock. About 70% of global lithium resources are hosted in brine.

Technical Analyst Clive Maund recommended the stock for "immediate purchase" last month after news broke that the company had commenced building a demonstration-scale modular field unit for two Tier 1 lithium producers using AcQUA™.

Maund said the stock was "shaping up for a major bull market."

"This is a big, big deal, for the implementation of Lithos Group's technologies will greatly reduce the threat of contamination by toxic chemicals, massively reduce costs and production time, and as it will largely reduce the use of evaporation ponds, it will slash water consumption dramatically," Maund wrote of Lithos' technology.

"By its very nature, lithium occurs and is produced in arid regions of the world where there is fierce competition for water resources that often becomes a political issue, so the vast reduction of water consumption made possible by Lithos Group's technologies will make it much more possible for lithium producers to work unhindered by friction with locals over water that could lead to serious complications," Maund wrote.

The Catalyst: Boosting Lithium Recoveries

The AcQUA™ modular field until is scheduled for factory acceptance testing in July. Once the system passes factory acceptance testing, it will immediately be deployed to the field for site acceptance testing, Lithos said.

That testing requires 1,500 hours (or about 2.5 months) of operational performance validation with each customer.

"The technology enables lithium brine resource operators to deploy field-ready extraction solutions that will substantially reduce water consumption by recycling upwards of 98% of the input brine water, boost existing production by up to 300% with optimal re-injection, curtail the use of toxic chemicals, cut processing time by more than 90% and substantially eliminate the use of evaporation ponds in the pretreatment and concentration phases of production," Beacon analyst Ahmad Shaath wrote in a January research report.

As for DLE, it could nearly double the production of lithium from brine, Goldman Sachs analysts wrote in a research note. It could boost recoveries to 70−90% from 40−60%, thereby improving project returns.

Lithos has two fully operational facilities, a 4,000-square-foot laboratory in Denver, Colo., and a 55,000-square-foot complex, permitted to produce pilot-scale lithium hydroxide, in Bessemer, Ala. In January, Lithos subsidiary Aqueous Resources applied for a follow-on US$30 million grant from the U.S. Department of Energy (DOE) to expand the Alabama facility. Awardees will be announced this May.

Demand for Element Steadily Rising

An important component of electric vehicle (EV) batteries, lithium is also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.

Demand for the element has been rising steadily since 2020 and is expected to continue to at least 2035, Statista data show. Projections indicate that by then, demand will have reached 3,829,000 metric tons of lithium carbonate equivalent, a 317.5% increase from 917,000 metric tons in 2023.

Similarly, the lithium market is projected to continue growing to US$6.4 billion in value by 2028 from US$2.5 billion in 2023, according to Markets and Markets. This change reflects a 20.4% compound annual growth rate (CAGR).

"The market has observed stable growth throughout the study period and is expected to continue with the same trend during the forecast period," the report said.

Katusa Research purported the lithium market could have a major breakout this year, citing its use in EVs and storage batteries as key drivers. 

"The opportunity in lithium is more electric than ever," Katusa wrote.

Ownership and Share Structure

About 57% of Lithos is held by insiders and management, the company said. According to Reuters, this includes CEO Scott Taylor with nearly 15% or 12 million shares, Independent Director Michael Westlake with 0.73% or 600,000 shares, and Independent Director Kevin McKenna with 0.05% or 40,000 shares.

About 27% of the company is held by strategic entities. The rest is retail.

Lithos has a market cap of CA$49.04 million with about 82 million shares outstanding. It trades in a 52-week range of CA$0.98 and CA$0.51.

Important Disclosures:

1. Lithos Group Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Lithos Group Ltd. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Lithos Group Ltd.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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