Volt Lithium Corp. (TSXV: VLT | OTCQB: VLTLF) has announced a strategic investment of US$1,500,000 by a company with operations in the Delaware Basin in West Texas, USA, with the purpose of deploying a field unit.
This field unit will produce lithium hydroxide monohydrate, using Volt’s direct lithium extraction (DLE) technology, and will build on work already done by Volt at its permanent Demonstration Plant in Calgary, Alberta.
Its Delaware Basin project is located in one of the largest conventional oil and gas producing basins in North America. It has approximately 10.9 million barrels of water produced every day through the production of oil and gas.
The strategic investment will be completed through a non-brokered, private placement with the investor. Under the private placement, 6,818,182 units of Volt will be issued at a price of US$0.22 per unit, for aggregate consideration of US$1,500,000 and is expected to close on or about May 1, 2024.
Each unit will consist of one common share in the capital of the company, and one-half of one common share purchase warrant. Each warrant will be exercisable into one common share at a price of US$0.35 per warrant share.
Of the investment, President and CEO Alex Wylie said: "We are very pleased to be collaborating with this operator to deploy Volt’s field unit in the Delaware Basin. Volt has spent the past several months working with this operator to ensure the successful extraction of lithium from this operator’s brine at our Demonstration Plant."
Spotlight on Volt
According to its website, Volt Lithium Corp is a "lithium development and technology company aiming to be North America’s first commercial producer of lithium hydroxide and lithium carbonates from oilfield brine."
It explains that its strategy is "to generate value for shareholders by leveraging management’s hydrocarbon experience and existing infrastructure to extract lithium deposits from existing wells, thereby reducing capital costs, lowering risks and supporting the world’s clean energy transition."
The company’s President, CEO and Director, Alex Wylie, has "a proven track record of founding and building successful high-growth resource-based businesses" while Chief Financial Officer Morgan Tiernan offers "10+ years of tax and financial reporting experience for private and public entities."
Volt Lithium’s Board of Directors also have a lot to offer in terms of experience within the sector. Director Warner Uhl has over 30 years of experience as a senior mining professional, "working in executive management with mining, construction, and engineering companies."
As Chair of the Board, Lt. General (ret’d) Honourable Andrew Leslie uses his "extensive US/Canada cross border relations experience."
Volt’s Board of Directors has over 130 years of experience in total in relevant sectors.
Lithium Is Key For A Greener Future
Lithium is used in the production of lithium-ion batteries. As most plug-in hybrids and all-electric vehicles use these batteries, it’s clear that more lithium is needed as more people choose to move to greener vehicles.
CarbonCredits predicts that global demand for lithium will surpass 2.4 million metric tons by 2030, which is double the 2025 forecast. The publication also noted that Goldman Sachs is maintaining "a pessimistic outlook for lithium prices in 2024" and is projecting "further declines compared to current levels." It puts the decline down to oversupply of lithium this year.
Stockhead recently reported on a supposed upcoming explosion of demand for electric vehicles (EVs) in China, "if the Chairman of Chinese EV-making titan BYD is to be believed." Stockhead also went on to note that "both futures and spot lithium pricings have staged a slight recovery after a bit of a recent dip" but maintained that "it’s all looking a tad unpredictable at the moment."
As for Volt Lithium’s part in a greener future, it notes that lithium extraction from oilfield brines is an emerging, high-growth industry. To its knowledge, the company is the "only lithium extraction company targeting [the] sector that has successfully extracted lithium from oilfield brines." After completing a pilot program, it announced up to 90% extraction capabilities using the company’s technologies.
Companies like EXXON and Chevron have also both recently announced that the extraction of lithium from oilfield brines will "become a future core competency once technology is commercialized."
As Volt Lithium points out, extracting from oilfield brines will have "first mover advantage in North America, as infrastructure is in place, fields are permitted, and lithium is produced today from the brines, it’s just not currently being extracted."
Volt’s Recent Progress
The company closed a round of financing towards the end of last year, and hoped to "significantly advance the business" with a number of key deliverables, including a published PEA, improvements to key technologies, and the completion of a permanent pilot.
In February 2024, the company announced it had been able to cut operating costs by 64% on its Rainbow Lake property.
What The Experts Are Saying
The experts agree that the future looks exciting for Volt. Michael Ballanger of GGM Advisory Inc. explains that he changed Volt Lithium’s rating to a Buy because of a research report from Wood Mackenzie, reposted in the Wall Street Journal, which mentioned "forecasting a glut of lithium…to continue for several years." Ballanger also notes that "lithium darlings that were market darlings a year ago, such as E3 Lithium Ltd. and Patriot Battery Metals Inc. are now in full "crash" mode."
Technical Analyst Clive Maund also considers Volt Lithium as an Immediate Strong Buy, writing that "Volt’s technology opens the door to a symbiotic relationship with any number of oil companies who can partner with it to produce lithium in a manner that is profitable for both parties." He also mentions the recent signing of a cooperation agreement with Alberta-based oil and gas producer Cabot Energy.
Maund writes that, while "oilfield lithium brine is often at low concentrations…Volt has developed the technology to profitably extract it."
Ownership and Share Structure
Volt Lithium is headquartered in Calgary, Alberta.
It has a market cap of CA$26 million, 130,164,922 shares, and 40,778,998 warrants. It has 7,765,000 options.
Approximately 40 million shares, around 30% of the company, is owned by management, directors and insiders. Institutions own 12% of the float.
The company has $7 million in the bank, with a monthly burn rate of $100,000.
It considers equity income asset manager Middlefield, and wealth management firm Backer Wealth as potential sellers.
