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Permalink Reply by Skip Peel - Mineral Consultant on July 18, 2024 at 1:03

Pantera broadens land coverage in Arkansas Smackover lithium brine play

Special Report July 17, 2024 Stockhead

 Pantera is the largest acreage holder in the Smackover area outside of the majors. Pic: Getty Images

• Pantera Minerals has added another ~3700 acres to its lithium brine project
• Its total landholding in the Smackover now covers almost 26,000 acres
• The company is preparing for the first re-entry test well

Special report: Pantera Minerals has added an additional ~3700 acres to its lithium brine project in the prolific Smackover Formation, boosting its total landholding to an impressive 25,998 net acres.

Arkansas’s Smackover region has a long history of oil production, which means it hosts many historical producing wells that have been plugged and abandoned after the reservoir or part of the reservoir they serviced became depleted.

For Pantera (ASX:PFE), the only listed junior in the area, these wells represent a massive opportunity to carry out exploration at a much lower cost, compared to other lithium brine areas, as re-entering an existing well can be done quickly and cheaply.

The Smackover’s prospectivity is best demonstrated by the quality of resource majors it has attracted with big names such as ExxonMobil, Albemarle, Standard Lithium and Tetra all developing potentially multi-billion-dollar projects to supply the burgeoning lithium market.

Arkansas itself benefits from a well-established oil and gas industry, exceptional logistics and transportation links, and a proactive, supportive state government.

PFE has been carefully building up its acreage to position the asset as a commercially viable lithium brine project.

Largest acreage holder in the Smackover

PFE is now the largest acreage holder outside of the majors in the Smackover area after increasing its landholding by 16.7% to almost 26,000 acres.

The project benefits from a crucial partnership with a commercial abstract company, underpinned by a 50,000-acre Exclusive Abstract Agreement.

This Exclusive Abstract Agreement facilitates access to comprehensive mineral ownership records, ensuring precise identification of owners and facilitating accurate execution of leases with the rightful mineral rights holders.

In the United States, the separation of mineral rights from surface rights underscores the importance of examining records dating back to the 1800s for precise ownership confirmation.

Pivotal advantage

PFE says the agreement confers a pivotal advantage, enabling the project to efficiently obtain accurate mineral ownership information for the project area, setting it apart from competitors.

“Our exclusive abstract agreement has continued to deliver with over 25,998 acres now under lease in America’s new ‘Lithium Capital’ as other groups in the play now surround us to the east, north, northwest and west of our acreage position,” PFE executive chairman Barnaby Egerton-Warburton says.

“This, alongside the strategic advancements in the area and the future construction of a large-scale processing facility by Exxon underscores the potential of the Smackover Formation.”

 

PFE’s increase in acreage size and proximity to other lithium brine projects. Pic: Pantera Minerals

Next on the cards

PFE’s partnership with global technology company SLB (NYSE: SLB) and the imminent arrival of the advanced subsurface modelling will accelerate the explorer’s progress as it prepares for the first re-entry test well.

In the meantime, the company continues to grow its project through the acquisition of additional acreage.

This article was developed in collaboration with Pantera Minerals, a Stockhead advertiser at the time of publishing.

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Permalink Reply by Skip Peel - Mineral Consultant on July 24, 2024 at 14:29

International Battery Metals (IBAT) Commences Operations of World’s First Commercial Modular Direct Lithium Extraction (DLE) Plant and First Commercial DLE Plant in North America

July 25, 2024

https://batteriesnews.com/international-battery-metals-ibat-commenc...

International Battery Metals (IBAT) Commences Operations of World’s First Commercial Modular Direct Lithium Extraction (DLE) Plant and First Commercial DLE Plant in North America.

 International Battery Metals Ltd. (CSE: IBAT), today announced it has commenced operations of its commercial proprietary modular direct lithium extraction (DLE) plant in Utah – an industry landmark representing the first lithium produced from the only modular DLE operation in the world and the first commercial DLE operation in North America.

The commercial facility outside Salt Lake City, Utah, is co-located at the operations of US Magnesium LLC (US Mag) and is extracting lithium from a byproduct magnesium chloride/ lithium chloride brine derived from historic magnesium production. IBAT’s modular DLE system, currently situated on about one-acre, is in production and providing lithium chloride to U.S. Mag. The next step for IBAT is to expand production by installing additional columns on the same DLE modular platform with a target of significantly increasing capacity.

John Burba, founder and chief technology officer of IBAT, said:

This achievement is momentous for IBAT and a harbinger for an industry-transformation to significantly boost lithium production on a more cost-effective and sustainable basis, clearing a path for supplies of lower-priced, high-quality lithium for EV batteries and large-scale grid backup battery installations.

“This kicks off a U.S. lithium production renaissance and creates the potential for a sea change in global lithium supplies.”

This milestone is a culmination of over four decades of John’s work in lithium extraction, including the invention of the first lithium absorbent, used in the world’s first DLE plant at Hombre Muerto in Argentina for FMC Technologies, which has been in continuous production since 1998.

This breakthrough is expected to reshape the lithium industry due to several advantageous of IBAT’s patented technology:

• Speed to market: The modular design can bring lithium to market in approximately 18 months, from the time construction is initiated at a fabrication facility to the time of production onsite, compared to several years’ time (5-7 years) for a conventional stick-built DLE plant at a location.
• Low cost: Expected to be among the lowest capex and opex in the industry.
• Scalable, agile and brine agnostic: The modular system’s small footprint can be installed at a variety of lithium brine resources around the world, including formations with active or inactive oil and gas operations. The system is easily scalable by adding modules for expansion.
• High-quality lithium: IBAT’s DLE technology selectively extracts lithium ions via absorption with a proprietary crystal structure, resulting in a lithium-chloride solution with the requisite feedstock purity to produce battery-grade lithium. The technology has been independently verified by SLR and Mehos Consulting to extract more than 97% of available lithium from Smackover brine.
• Sustainability: IBAT’s proprietary absorbent does not require chemicals in the extraction process. The technology extracts lithium from brine sources and returns the lithium-depleted brine back to its source. Due to the plant’s advanced water recovery rate of up to 98% of water recycled, IBAT’s technology is highly protective of sensitive water resources, based on Smackover brine testing by SLR and Mehos.

At the Utah operation, upon acceptance testing IBAT will receive royalties from US Mag from lithium sales as well as payments for equipment rental based on lithium prices and performance.

This operational milestone follows the recent appointment of incoming IBAT CEO Iris Jancik, who starts in her new role mid-August to lead the company’s commercial expansion. To build out its operations, IBAT is in discussions with large industrial companies, including automakers, as well as oil and gas majors and brine-resource owners.

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Permalink Reply by Skip Peel - Mineral Consultant on July 26, 2024 at 10:25

Big Oil seizes lithium opportunities   

Posted By: Colin McClelland July 26, 2024

Mining companies could benefit in cash and technology as major fossil fuel companies such as ExxonMobil (NYSE: XOM), Occidental Petroleum (NYSE: OXY) and Equinor (NYSE: EQNR) invest in lithium, a potential lifeline amid the battery metal’s low prices and oversupply.

ExxonMobil, which has produced some lithium in a pilot project, signed a preliminary agreement last month to send lithium to South Korea-based SK On, a battery maker that’s building plants to supply Hyundai and Ford in the United States. That followed the oil giant’s US$100-million purchase of drilling rights on 485 sq. km of lithium brine assets in Arkansas’ Smackover Formation from Galvanic Energy.   

Also in June, Occidental Petroleum said it’s forming a joint venture with a unit of Warren Buffett’s Berkshire Hathaway (NYSE: BRK.B) to produce battery-grade lithium from the brine of 10 geothermal power plants in California. It’s begun feasibility testing.   

Chevron (NYSE: CVX) says it’s exploring lithium extraction, and Reuters reported the third-largest petroleum company by market value was speaking with International Battery Metals (CSE: IBAT; US-OTC: IBATF) about licensing brine technology.  

Norwegian state oil company Equinor said in May it could pay as much as US$133 million for a 45% stake in Standard Lithium’s (TSXV: SLI) projects in Arkansas and Texas. Standard started a commercial-scale demonstration plant in April. Vulcan Energy Resources (ASX: VUL) told The Northern Miner by email it has oil majors, but wouldn’t say which ones, investing in its €1.3 billion ($2 billion) Zero Carbon lithium project in Germany.   

‘Makes sense’

“The move into lithium makes a lot of sense for these large international energy companies,” Rhidoy Rashid, a senior associate at London-based data and analysis firm Energy Aspects said by email. “Unlike some other niche metals, lithium is relatively abundant, so the resource needed to match rising demand for batteries is there, it just needs to be efficiently extracted. The expertise these companies can bring may also help to ramp up lithium supplies from areas where it was previously uneconomic to extract the metal.”   

Oil companies are investing exclusively in brine projects (as opposed to hard rock) that may use direct lithium extraction (DLE), which resembles pumping crude in some aspects. They’re tapping their own core capabilities in subsurface exploration, drilling and chemical processing. They have much deeper pockets with market values that dwarf their mining cousins. Their diversification into green metals can help lift a mining sector that attracted stock market investors when the metal price was high but have since abandoned it.

“Oil companies offer the technology and skills need to identify, characterize and produce lithium-bearing brines from deep underground,” Terry Braun, president of North American operations for SRK Consulting, said by email. The firm has 45 offices globally and has operated in more than 150 countries.  

“The challenge of economically extracting a marketable lithium product once the brine is at the surface is formidable,” Braun said. “Even with the technical expertise of most major oil companies.” 

US$1-billion move

ExxonMobil is aiming to supply enough of the battery metal to power 1 million vehicles by 2030. It has said a “material” part of its US$20-billion budget for low-carbon projects through 2027 will be spent on lithium.  

“It has to be over US$1 billion if it is going to be material,” chairman and CEO Darren Woods said on an April 30 conference call. “We are looking at very large markets into the billions.”   

Lithium brines are often found in depleted oil wells, like the Leduc field in Alberta where E3 Lithium (TSXV: ETL; US-OTC: EEMMF) is advancing its US$2.5-billion Clearwater project on Canada’s largest resource of the battery metal. The project between Calgary and Edmonton could produce 32,250 tonnes a year of lithium hydroxide monohydrate over half a century, according to a prefeasibility study issued on June 26.  

ExxonMobil’s Canadian subsidiary, Imperial Oil (TSX: IMO), has invested $6.4 million for stock and warrants equal to 4.3% of E3.  

There is only one commercial DLE operation so far outside of China after companies struggled to lower costs and improve technologies. Arcadium Lithium (NYSE: ALTM; ASX LTM) has been using DLE at its Hombre Muerto operations in Argentina since the 1990s. Most brine operators like Albemarle (NYSE: ALB) and SQM (NYSE: SQM) the world’s two largest lithium producers, use traditional evaporation ponds.   

Pros and cons

However, DLE is gathering pace because it can produce lithium in hours or days vs months or years on a fraction of the land and process brines with lower lithium concentrations.   

US Magnesium is using DLE from International Battery Metals for a project in Utah and CleanTech Lithium (AIM: CTL) started a DLE pilot plant in Chile. In Canada besides E3, Volt Lithium (TSXV: VLT), EMP Metals (CSE: EMPS; US-OTC: EMPPF) and LithiumBank Resources (TSXV: LBNK; US-OTC: LBNKF) have all started DLE testing.   

These operations, which in E3’s case, would siphon lithium-laden water from the same wells that used to produce oil, then pump it back into the reservoirs after extracting the battery metal. Even permit requirements and the separation process using water and reinjecting it into wells are more akin to the oil industry than hard rock mining.   

However, some experts have expressed concerns about the environmental impact of oil companies extracting lithium, likening the process to fracking because it injects liquid underground that could potentially enter water supplies. Marco Tedesco, a climate scientist at Columbia University, has said high water usage and potential pollution are linked to DLE. Some environmentalists have criticized oil companies for greenwashing their operations.   

“It pains us to even cover a company like ExxonMobil, as its history in environmentalism is as filthy as the oil it drums up,” Scooter Doll at energy transition website Electrek wrote when the oil giant started lithium drilling. “While this is welcomed news to an extent, it’s not difficult to see the motive behind ExxonMobil’s expansion into lithium, and it sure as hell isn’t about saving the planet.”  

Oversupply

While companies use long-term metal pricing to gauge project economics, the surge in oil major investing comes as battery-grade lithium carbonate has plunged to around a three-year low. It was US$11,825 a tonne on Friday, down from US$40,675 a year ago, according to The Wall St. Journal. It had been approaching US$76,000 a tonne in January last year.   

“The commercial scale economics for the majority of DLE projects are unknown at the present time,” SRK’s Braun said. “DLE technologies or other non-conventional metallurgical flow sheets present a technical risk that could negatively impact project economics and the ability of the mining company to pay the lender.”  

A glut in lithium is expected to continue for close to a decade even as demand increases because of more electric vehicles hitting the market, analysts at FitchSolutions BMI said on a June 27 webcast. The oversupply will force scores of companies to adopt cost-saving technology like DLE and/or face takeover threats, they said.   

“We expect no return to previous highs for lithium,” Sabrin Chowdhury, head of BMI commodities analysis, said from Singapore. “Prices will remain below the peaks of 2022 and 2023 for at least five to 10 years.”   

Demand

Global lithium production increased 23% last year to 180,000 tonnes, according to Statista. Energy Aspects’ Rashid says oil major investments in lithium are key for the world to meet rising demand and climate-change fighting goals.   

“It is crucial that lithium supplies are unlocked if the world is to keep pace with net zero ambitions,” the analyst told The Northern Miner. “We think global lithium production needs to almost triple by 2030 to keep up with the level of electric vehicle adoption required to maintain pace with decarbonization targets.” 

The lower price has caused some producers such as Albemarle, which has both hard rock and brine operations, to slash costs and delay projects. That could expose some assets to M&A and provide more opportunities for oil companies to invest. Miners may seek out oil companies as their projects face funding and other headwinds.   

Braun says success in DLE technology suits oil companies because of their resources for tests on brines from projects and their capacity to build large projects, starting with DLE pilot programs to assess economic feasibility.  

“Oil companies invest significant capital and time to develop, test and deploy new technologies at commercial scale,” Braun said. “This is a strategic advantage over companies that have less capital or time to prove a commercial scale DLE application.” 

 

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Permalink Reply by Skip Peel - Mineral Consultant on July 30, 2024 at 13:07

Lithium-extraction companies ask Arkansas agency to set royalty rates for mineral-rights holders

Today at 5:20 p.m.  arkansasonline.com

by Ainsley Platt , Aaron Gettinger

The major players in Arkansas' nascent lithium extraction industry filed a joint application with the Arkansas Oil and Gas Commission requesting that it set a royalty for the extraction of lithium from the Smackover brine aquifers.

Click the link at the bottom of this reply to read the application.  Choose 2024 and go the pdf for the September 9 meeting agenda.  Please share this with interested parties.

 

July 26, 2024

Arkansas Oil and Gas Commission

Arkansas Department of Energy and

Environment 5301 Northshore Drive

North Little Rock, AR 72118

 

September 9, 2024 Agenda

RE: ORDER REFERENCE NO. 050-2024-09

https://www.aogc.state.ar.us/hearing/apps.aspx

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Permalink Reply by Skip Peel - Mineral Consultant on Wednesday

Pantera Minerals Signs Rig Agreement for First Smackover Well Test at Lithium Brine Project

From Pantera Minerals  Sep 10 2024

Pantera Minerals Limited ("Pantera"), an Australian-listed mineral exploration company working on projects in Western Australia, is pleased to announce that it has signed a Master Services Agreement (MSA) with Production Services Inc., an oil and gas services company based in Arkansas, to undertake the re-entry of its first well at the Smackover Lithium Brine Project in Arkansas, USA. This marks a significant step in Pantera’s plan to advance its lithium brine exploration efforts in the highly prospective Smackover Formation.

Highlights:

• Rig Agreement Secured: Pantera has formalized a rig agreement with Production Services Inc., a company with over 50 years of experience in well servicing in the Arkansas oil and gas sector. Re-entry and testing at the well are expected to commence in mid-October 2024.
• Initial Well Testing: The re-entry test will focus on sampling brine from the upper Smackover Formation to evaluate lithium concentrations. The lithium grade obtained from these samples will provide the most accurate data to date, supporting the Company's resource modelling efforts and guiding the location of a second well.
• Industry Momentum: The Smackover Formation is home to several significant lithium brine projects, including Exxon Mobil's (NYSE: XOM) multi-well lithium exploration campaign and Equinor’s (NYSE: EQNR) recent $160 million investment in the region’s brine projects, underscoring the growing interest in the region.
• Strategic Location: The first re-entry well is strategically positioned to allow for both production and disposal, creating an opportunity for Pantera to operate a pilot plant in 2025.

Barnaby Egerton-Warburton, Executive Chairman of Pantera Minerals, stated: “The Company is extremely excited with the imminent testing of lithium brine grade at its Arkansas Smackover Lithium Brine Project. With the contracting of a work-over rig we are now in the final stages of preparation for our first well. The Company believes the Australian market place is not correctly valuing the potential upside of the Company’s project, but is aware of many corporate eyes on the Company, its project and its progress. The Company continues to see aggressive leasing surrounding its exclusive abstract area and now sees its position surrounded by both large listed and privately funded groups.”

Next Steps:

Pantera will continue to collaborate with SLB on the design of the testing procedure, with the well re-entry scheduled to start later this month. The brine samples obtained will be tested by multiple Direct Lithium Extraction (DLE) technology providers, with a focus on identifying the most efficient method for processing the lithium-rich brine. The results of these tests will inform future exploration and resource definition activities, including the planning of a second well and potential pilot plant operations in 2025.

 

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Permalink Reply by Skip Peel - Mineral Consultant on Thursday

South Arkansas landowners fire back at lithium companies, call proposed royalty structure ‘unlawful’

by Phillip Powell September 12, 2024  arktimes.com

https://arktimes.com/arkansas-blog/2024/09/12/south-arkansas-landow...

Landowners are urging the Arkansas Oil and Gas Commission to throw out five lithium companies’ joint application to establish a royalty ra..., arguing that the companies’ proposal would illegally skirt the state’s rulemaking process.

The lithium industry in Arkansas is just getting off the ground, but property owners are already clashing with companies over how much they should be paid to lease the mineral rights on their land. The five major companies active in the nascent industry — Albemarle Corporation, ExxonMobil, Standard Lithium, Lanxess and Tetra Technologies Inc. — filed a joint application with the Oil and Gas Commission on July 26 to set a royalty rate of 1.82%. The commission, which regulates the developing industry, will consider that application at a meeting on Sept. 24.

The companies cannot move forward with extracting lithium for profit until a royalty rate is set by the commission, but there is considerable distance between the numbers proposed by lithium companies and those proposed by landowners.

In October, when Lanxess and Standard Lithium suggested a rate of 1.25-1.67% for a specific lithium extraction project, landowners countered with a 12.5% rate. The two companies later withdrew their application. They joined with Exxon, Albemarle and Tetra to file the joint application in July, which attempts to set a blanket rate for all operators and all leased lands. 

But in a letter sent Tuesday to the Oil and Gas Commission, a lawyer for the landowners argues the application should be thrown out entirely.

“Yes, we are aware of the objection filed yesterday. We believe it is up to the [Arkansas Oil and Gas Commission] to make a decision as to the merits of the objection,” said Jesse Edmondson, a spokesman for Standard Lithium. “It is our opinion that the application we have filed meets statute requirements, and presents a fair and equitable royalty for all parties.” 

ExxonMobil also defended the joint application.

“[The Arkansas Oil and Gas Commission] is tasked with setting the standard for a fair and equitable royalty structure that appropriately balances the contributions of all parties involved,” a spokesperson said. “The joint proposal that was submitted meets this objective, importantly giving mineral owners a direct benefit from potential lithium development in Southern Arkansas.”

The South Arkansas Minerals Association, a collection of landowners in the area, call the five major companies in the developing industry “the Big Five.” The association mostly represents large, landowning companies, including south Arkansas businesses like Murphy Oil Corporation, Mahony Corporation, Triangle Industries, and others.

“As much as everyone would like to see some progress on determining a lithium royalty rate, the Commission cannot grant the application before it,” attorney Alan Perkins, who represents the South Arkansas Minerals Association, wrote in the Tuesday letter. “The Big 5’s coordinated attempt to steamroll a minimal royalty rate through for the entire brine production area irreconcilably conflicts with Arkansas law.”

Joint application illegal, landowners say

The landowners argue that if the Oil and Gas Commission accepts the lithium companies’ joint application, they will be effectively creating a new rule without going through the lengthy “rulemaking” process laid out in state law.

In their joint application, the companies ask the commission to approve an order allowing them to establish one royalty rate for all future lithium extraction in the Smackover formation, a subterranean geological region in south Arkansas.

Perkins cited the Arkansas Administrative Procedure Act, the law that governs actions by state agencies like the Oil and Gas Commission, which defines a rule as any “agency statement of general applicability and future effect.” His argument is that the lithium companies’ joint application would in effect create a rule applied to all potential instances where lithium is extracted and sold in Arkansas.

When state agencies make a new rule to implement a law passed by the Legislature, they must go through a formal process. That process typically requires a series of public notices, hearings and a public comment period, along with legislative review.

“The first application was made in the way it should be made,” Perkins said to the Arkansas Times. “They said we are applying for a royalty for these units and here is our financial information for these units. We were able to analyze that and by using that information, propose what we were proposing as a fair and equitable royalty as opposed to what they wanted to have. In this instance [the joint-application], they’ve not done any of that. They have not designated any specific unit, they haven’t presented any financial information at all in the financial application, and so we were really unable to do that.”

Perkins argues that royalty rates are legally required to be established on a case by case basis, saying “there is no statutory basis” for a joint royalty application that does not consider each company and project separately.

Perkins also said the joint application lacks transparency. Though the lithium companies are asking the Oil and Gas Commission to set a blanket royalty rate, they only included financial information and economic forecasts from one company, Standard Lithium.

“They’ve shown an aversion to sharing their financial projections about how profitable their projects will be, they don’t want to do that,” Perkins said. 

In the joint application, the lithium companies say details concerning their costs, extraction methods and expected sales “constitute valuable trade secrets of [each] company which must not be shared with other Co-Applicants or released into the public domain.”

Standard Lithium is the only lithium company to make a pre-feasibility study or economic projections public so far. In the joint application, only Standard Lithium submitted economic projections and data regarding a specific project.

At the December 2023 Oil and Gas Commission meeting, the commissioners were convinced to table Standard Lithium and Lanxess’ royalty application due to a lack of financial disclosure. Lanxess and Standard Lithium voluntarily withdrew that application in April.

Representatives from Standard Lithium and Exxon told the Arkansas Times they believe in the validity of the joint application. It’ll be up to the Oil and Gas Commission to decide whether Perkins’ legal objections are correct.

How we got here

The heart of the royalty conflict is whether rates will look more like a traditional brine royalty of 1-2%, or if they will be closer to a traditional oil and gas royalty of 11-12%. Standard Lithium has argued to the Oil and Gas Commission that risks associated with the new industry and the expensive, experimental technology used for lithium extraction mean the company cannot afford to pay high royalties to landowners.

From the lithium companies’ perspective, the landowners’ lithium-rich brine by itself is not valuable without their technology. A high royalty rate will stifle their ability to invest in lithium production, they argue. At the December 2023 Oil and Gas Commission meeting, representatives from Tetra Technologies and Standard Lithium said a 12.5% royalty rate would discourage investment and innovation.

The lithium rush in Arkansas is part of the broader transition to renewable energy and efforts to bring control of the supply chain for critical minerals to the U.S. The technology that companies hope to use in south Arkansas has never been used before commercially.

But landowners represented by the South Arkansas Minerals Association want a fair payout. In the letter Tuesday, the group cited several recent examples of Arkansas landowners being offered 10% royalty deals for lithium brine extracted beneath their lands — far more than the 1.82% rate proposed by the lithium companies.

As the Arkansas Times reported a month ago, based on Standard Lithium’s pre-feasibility study, the company expects to receive more than double the return on their investment with their South Arkansas Lithium Project than most mining operations receive, even if the lithium company owed landowners a royalty payout of 12.5%. Standard Lithium is the only lithium company to make a pre-feasibility study or economic projections public so far.

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