Standard Lithium Ltd. is pleased to announce that it has entered into a Memorandum of Understanding, with TETRA Technologies, Inc., a NYSE-listed company to secure access to additional operating and permitted land consisting of approximately 12,100 acres in Bristol Dry Lake, and up to 11,840 acres in the adjacent Cadiz Dry Lake, Mojave Desert, California.
As a result, the Company now has access to approximately 48,000 acres of mixed private, patented and placer claim land in the Bristol Dry Lake and Cadiz Dry Lake basins that allows for exclusive lithium brine exploration and processing. The new MoU with TETRA allows for the exclusive right to conduct exploration activities and to enter into a mineral lease to allow production activities for lithium extraction on property held under longstanding mining claims and permits by TETRA (transaction terms described below). In connection with the entering into of the MoU, and in support of the transaction with TETRA, the Company has made a non-refundable deposit of US$100,000.
Standard Lithium CEO, Robert Mintak said “Since day one we have recognized the bigger opportunity with respect to expanding the resource base and strengthening project economics at Bristol Dry Lake by securing the rights for lithium development over the entire basin. By inking an agreement with TETRA, the only other permitted operator in the area, we have now effectively achieved that. This is a significant and strategic move for Standard, but has only been made possible by the excellent relationships we have developed with the permitted brine operators in the region. Gaining access to the adjacent Cadiz Dry Lake operating project is an additional benefit to our relationship with TETRA.”
TETRA currently operates two passive solar evaporation plants in the Mojave Desert area of San Bernardino County, California, which produce liquid calcium chloride from underground brine reserves that are pumped to the surface. The Bristol Dry Lake project is currently permitted for brine extraction and processing activities, has significant production infrastructure in place and is serviced by major highways, power and a dedicated rail siding and loading spur. The Cadiz Dry Lake Property is located approximately 20 km southeast of the Bristol Dry Lake Property and brings the Company’s total project opportunity in the Mojave Desert to approximately 48,000 acres.
Dr. Andy Robinson, President and COO of Standard Lithium said “Three initial grab samples of brine from wells at Cadiz show lithium concentrations in pumped brine ranging between 112 to 139 mg/L. These concentrations from relatively shallow wells suggests that there is a potentially significant lithium brine deposit present in the Cadiz Dry Lake basin. Our technical team is currently performing due-diligence on all available data for the Cadiz Dry Lake basin and will be laying out a plan for new data collection over the coming months. Additional exploration on TETRA’s properties in both Bristol Dry Lake and Cadiz Dry Lake will be performed concurrently with our existing resource definition program, and as such, we should be able to significantly expand our resource base as we move towards producing maiden lithium resource estimates for the Mojave projects.”
Transaction Terms – Option Agreement
Under the terms of the MoU, the parties will negotiate a definitive option agreement (the “Option Agreement”) which will provide Standard Lithium with a period of six (6) years to conduct brine exploration activities (the “Option Period”) on the Bristol Dry Lake Property and/or the Cadiz Dry Lake Property. If during the Option Period, Standard Lithium elects to conduct exploration activities on both Properties, the Company will be required to make a series of cash payments and share issuances to TETRA which will be set forth in the Option Agreement. Any such payments or share issuances will be adjusted in the event the Option Agreement includes only one of the Properties.
Lease Agreement & Royalty
In accordance with the terms of the MoU, at any time during the Option Period, Standard Lithium has the right to exercise the Option, following which the Company and TETRA would negotiate and enter into a lease granting Standard Lithium a period of thirty (30) years of commercial production of lithium from brine produced by the Properties and subject to an annual royalty on the gross revenue derived by Standard Lithium from the sale of lithium resulting from the brine produced from the Properties.
Standard Lithium’s right to conduct exploration activities on the Properties remains subject to the negotiation and finalization of a definitive Option Agreement. Any share issuances contemplated by such an Option Agreement will be subject to the approval of the TSX Venture Exchange and would be subject to statutory restrictions on resale.
Raymond Spanjers, Certified Professional Geologist (SME No. 3041730), is a qualified person as defined by NI 43-101, and has supervised the preparation of the scientific and technical information that forms the basis for this news release. Mr. Spanjers is not independent of the Company as he is an officer in his role as Vice President, Exploration and Development.