Share Purchase Plan to Fund Prairie Direct Extraction Development
Arizona Lithium (ASX:AZL) is launching a $2 million share purchase plan (SPP) to advance its Prairie direct extraction project in Saskatchewan, Canada. The funding will support the construction of a proof-of-concept facility and the engineering and design of the company’s first production pad, marking a crucial step toward phase 1 lithium production.
Unlike a placement for institutional investors, Arizona Lithium has opted to offer shares to loyal shareholders, allowing them to participate ahead of key milestones that could significantly enhance the company’s value.
Strategic Growth for Prairie Direct Extraction Project
The Prairie direct extraction project is a key focus for Arizona Lithium, with upcoming milestones including:
- The start of construction toward commercial production.
- Strategic offtake and financing agreements.
- Updates on the Koch direct lithium extraction (DLE) unit.
- A reworked exploration plan for its Big Sandy lithium project in Arizona.
Eligible shareholders can purchase up to $30,000 in fully paid ordinary shares at $0.006 per share, with two free attaching options for every three shares purchased, exercisable at $0.012 and expiring three years from issuance.
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Arizona Lithium Directors and Major Shareholders Show Strong Support
All Arizona Lithium directors have committed to taking up their full $30,000 entitlement, and the company has confirmed that most of its larger shareholders intend to do the same.
Managing Director Paul Lloyd emphasized the importance of the capital raise in progressing the Prairie direct extraction project:
“Importantly, the commencement of the proof-of-concept commercial-scale facility at the Prairie project and construction at Pad #1 will add significant value to the company.”
He also highlighted strong interest from potential strategic partners, with Arizona Lithium having sent product samples to multiple global and Fortune 500 companies.
“The more we develop out the project, the closer we get to landing a transformational partnership with one of these entities,” Lloyd added.
Major Cost Savings and Phased Development Plan
Arizona Lithium recently updated its phased development plan for the Prairie direct extraction project, significantly reducing initial capital expenditure. The project’s starting CAPEX has been cut from US$290 million to just US$22 million, with plans to produce 150 tonnes per annum (tpa) of lithium carbonate equivalent using advanced direct lithium extraction (DLE) technology from U.S. sector leader Koch.
The company believes that proof-of-concept production at Pad #1 can be rapidly scaled across other sites successfully drilled and de-risked last year.
Regulatory Approvals and Lithium Resource Potential
The Prairie direct extraction project is well-positioned for development, with key regulatory approvals already secured:
- A critical water license.
- Approval for facility construction.
- Consent from oil and gas operators for the disposal of lithium-depleted brine.
Arizona Lithium’s fully owned project spans over 390,000 acres of mineral rights, with a 6.3 million-tonne lithium carbonate equivalent (LCE) resource.
Beyond Saskatchewan, Arizona Lithium also holds assets in Arizona and New Mexico, positioning the company for future growth as lithium prices show early signs of recovery.
Looking Ahead: Key Developments to Watch
With strong shareholder backing, a clear development roadmap, and increasing interest from strategic partners, Arizona Lithium is poised to make significant strides in its Prairie direct extraction project.
The success of the proof-of-concept facility will be a crucial milestone, potentially unlocking further investment and commercial-scale lithium production in North America.
