E3 Lithium Advances Alberta DLE project with over $45M Total Funding and Government Support

• E3 Lithium is developing a lithium project in Alberta, Canada, repurposing historic oil assets to extract lithium from brine, with planned production by 2027-2028 and a measured and indicated resource of 16 million tonnes of lithium carbonate equivalent.
• The company has adjusted its strategy to build in phases, starting with 10,000-12,000 tonnes annually instead of 32,000 tonnes as previously planned, focusing initially on lithium carbonate production rather than hydroxide to reduce capital requirements.
• E3 has secured $23 million in cash and $37 million in federal and provincial grants, benefiting from a 30% Investment Tax Credit (ITC) on capital expenditure from the Canadian government.
• The company employs Direct Lithium Extraction (DLE) technology with operating costs of $6,200 per tonne against current market prices of $10-12,000 per tonne.
• E3 is actively seeking strategic partnerships from four sectors (automotive, battery, oil and gas, or mining companies) to help finance project development, aiming to avoid equity dilution in the project financing phase.

E3 Lithium represents a significant development in North America's critical minerals landscape, advancing a Direct Lithium Extraction (DLE) project in Alberta, Canada. The company is repurposing historic oil assets to create what could become one of North America's largest lithium production facilities, with operations targeted for 2027-2028.

Financial Position and Government Support

E3 has secured a strong financial foundation with $23 million in cash and $37 million in federal and provincial grants. Significantly, the company qualifies for Canada's 30% Investment Tax Credit on capital expenditure, substantially reducing the project's financing burden.

Resource Scale and Technical Foundation

The company's resource base stands at 16 million tonnes of lithium carbonate equivalent (LCE), measured and indicated - a scale that CEO Chris Doornbos notes is

"five times more measured and indicated resource than the rest of Canada's resources put together."

This positions E3 as a potential major player in the North American lithium supply chain. The project utilizes DLE technology, which the company has been developing since 2017. Doornbos explains:

"Direct lithium extraction is not that complicated and it's not new. Doing it for lithium is new. But the process operations around it are not new - it's solid liquid handling."

Strategic Development Approach

The company has modified its development strategy, opting for a phased approach starting with 10,000-12,000 tonnes annually instead of the initially planned 32,000 tonnes. This adjustment, along with focusing initially on lithium carbonate rather than hydroxide production, reduces capital requirements and implementation risk.

With projected operating costs of $6,200 per tonne against current market prices of $10,000-12,000 per tonne, the project demonstrates robust economics even in the current depressed lithium price environment. Doornbos notes:

"When you look at the risk in mining, the percentage of projects, the percentage of new finds or exploration projects that make it to final mining are very small. But on the other side of that is that those projects that get to mine, there's a huge value accretion that happens."

Strategic Partnership Potential

E3 is actively engaging with potential strategic partners across four sectors: automotive, battery, oil and gas, and mining companies. The company aims to secure project-level investment rather than corporate equity investment, targeting partners who can bring both capital and strategic value.

Despite current market softness, recent strategic moves by major players like Rio Tinto's acquisition of Arcadium and GM's investment in Thacker Pass suggest growing institutional confidence in the lithium sector. E3's scale and advanced development status position it well to benefit from this trend.

The project also benefits from Alberta's established regulatory framework for resource extraction, with the project falling under oil and gas regulations rather than mining regulations. This could potentially streamline the permitting process compared to traditional mining projects.

Conclusion

E3 Lithium represents a convergence of several key factors attractive to investors in the critical minerals space: scale, strong government support, technical validation, and strategic positioning in the North American market. The company's phased development approach and focus on strategic partnerships demonstrate a pragmatic path to production.

Key differentiators include resource scale that supports multiple projects, strong financial position with significant government backing, technical de-risking through years of development, and its strategic location in established energy jurisdiction.

Investment Thesis for E3 Lithium

• E3 controls North America's largest lithium resource with 16M tonnes LCE of measured and indicated resources, providing scale for multiple potential projects and establishing the company as a dominant player in the Canadian lithium sector.
• The company's strong financial foundation includes $60M in secured funding and a 30% Investment Tax Credit on capital expenditure, while maintaining competitive operating costs of $6,200/tonne, positioning it well for project development without significant dilution.
• By leveraging Alberta's established energy infrastructure and regulatory framework, E3 benefits from reduced capital requirements, streamlined permitting processes, and strategic proximity to North American battery manufacturers and auto producers.
• The company's DLE technology has been validated through years of development since 2017, with an experienced technical team preparing to demonstrate commercial viability through a pilot plant, significantly de-risking the technical aspects of the project.
• As an early mover in North American lithium supply, E3 is well-positioned to attract strategic partnerships across automotive, battery, mining, and energy sectors, while its scale and location provide optionality for multiple revenue streams and expansion opportunities.

Macro Thematic Analysis

The lithium sector is experiencing a fundamental shift driven by geopolitical realignment and energy security concerns. While current market conditions show softened prices, structural drivers for domestic lithium production in North America remain robust. Key macro factors include:

1. Supply Chain Regionalization: Growing Western emphasis on reducing dependency on Chinese processing capacity (currently 70-80% of battery-grade lithium).
2. Policy Support: Significant government backing through direct funding and tax incentives, reflecting critical mineral status.
3. Demand Diversification: Beyond EVs, growing recognition of lithium's role in grid storage and broader energy transition.
4. Market Bifurcation: Potential emergence of separate pricing mechanisms for Western vs. Chinese markets, potentially supporting higher prices for Western producers.

Key Takeaway

While market conditions remain challenging, the company's robust fundamentals and strategic positioning suggest potential for significant value creation as North American lithium supply chains develop. The involvement of major industry players in the sector and growing policy support provide additional validation of the broader opportunity.

The success of E3's approach could provide a template for future development of North American lithium resources, particularly in repurposing existing oil and gas infrastructure for critical mineral production.