E3 Lithium (ETL) - H2 Pilot Plant Aims to Prove Process Viability, Plus PFS Q4

E3 Lithium Ltd. is an Alberta-based and TSX-V-listed lithium resource and technology company. The company has an asset portfolio consisting of approximately 24.3 million tons of lithium carbonate equivalent (LCE) in the inferred category. E3 Lithium Ltd. has a goal of producing high-purity, battery-grade lithium products in one of the best mining jurisdictions in the world.

The company on the 2^nd of February 2023 provided an update regarding its planned Lithium Ion-Exchange (Li-IX) pilot plant which is envisioned to be constructed at its Clearwater lithium project. The planned Li-IX pilot plant is on schedule to start operation in Q3 2023, with the company proceeding with the Front-End Engineering and Design (FEED) study of the Li-IX pilot plant. The Li-IX pilot plant is aimed at testing direct lithium extraction at a larger scale under real-world operating conditions and will provide the company with further insight into the drilled wells of the project.

E3 Lithium Ltd. plans to construct the Li-IX pilot plant at the first well on its Clearwater project. The relevant required licensing documentation has been submitted by the company and is under review by the Alberta Energy Regulator.

The company has the necessary funds in place for the construction of the Li-IX pilot plant, which is estimated to cost between CAD$ 4 million and CAD$ 6 million. The funds include the non-dilutive support from Alberta Innovates of CAD$ 1.8 million as well as the Canadian government’s strategic innovation fund (SIF).

E3 Lithium Ltd. also aims to publish a pre-feasibility study (PFS) of the envisioned commercial Lithium Ion-Exchange operation by the end of 2023, with the initial works of the PFS already underway.

Share price and Pilot Plant

E3 Lithium Ltd. has a share price which averages between CAD$ 2 and CAD$ 3. Chris Doornbos the CEO and the Founder of the company explains that before the company’s CAD$ 2 and CAD$ 3 share price, its share price was between 30 and 50 cents. Doornbos explains that the company’s value had a drastic change upon the publishing of the Clearwater project’s preliminary economic assessment (PEA) and that he believes that the planned Li-IX pilot plant of the company will have an effect on its share price in the coming days.

“E3 has sort of been hovering around the CAD$ 2 to CAD$ 3 range, a big step change from prior to that where we hovered around the 30 to 50 cent range. That catalyst was really driven by our Preliminary Economic Assessment that demonstrated to the market that this had incredible value potential. I think the pilot is another big de-risking step like the PEA was for us. We’ve been working on technology; we’ve been planning for this pilot for years now. And what it really does for the company is it truly de-risks a big portion of what we’re up to here.”

The company on the 2^nd of February 2023 provided an update regarding its planned Lithium Ion-Exchange (Li-IX) pilot plant which is envisioned to be constructed at its Clearwater lithium project. Doornbos explains that E3 Lithium Ltd. has confidence in its envisioned pilot plant, with the company believing the planned technology will be successful.

“I think it's what the market is also waiting for to see that this technology is going to take Lithium out of the brines at this scale. From the perspective that we have, we wouldn't be going to pilot if we didn't believe the technology was working. So we have a lot of confidence internally and we will be demonstrating that confidence obviously, with the success of this pilot in Q3 of this year.”

The planned Li-IX pilot plant is on schedule to start operation in Q3 2023, with the company proceeding with the Front-End Engineering and Design (FEED) study of the Li-IX pilot plant. The Li-IX pilot plant is aimed at testing direct lithium extraction at a larger scale under real-world operating conditions and will provide the company with further insight into the drilled wells of the project.

“We're demonstrating about 60%, 65% of the operations that will run commercially. We have a well that we drilled this past summer so the first Lithium well was drilled in Alberta. I'm very excited about that. We're now converting that into where the pilot will operate. The brine will be coming from a location in the aquifer where we plan to run our first commercial plant.”

Pilot plant costs and timeframe

E3 Lithium Ltd. has the necessary funds required for the construction of the Li-IX pilot plant, which is estimated to cost between CAD$ 4 million and CAD$ 6 million. Doornbos explains that the large margin of error (plus/minus CAD$ 1 million) is due to some of the costs not yet known and others that have been much less than anticipated.

“So the actual budget we have is about CAD$ 5 million but there are a couple of costs that we think we can save. And there are a couple of costs that we haven’t quite nailed down to a level that we are confident in, so we put a range just to be safe to give the market a bit of a perspective of what it could be and it could be between CAD$ 4 million and CAD$ 6 million but our actual cost estimate that we have from the design we’ve done is CAD$ 5 million, so we just put some error bars effectively on it.”

E3 lithium Ltd. is well financed to accommodate either end of its price spectrum. The company is fully funded to complete the construction of the LI-IX Pilot plant according to Doornbos and has been able to source funds from various sources including, non-dilutive support from Alberta Innovates of CAD$ 1.8 million as well as the Canadian government’s strategic innovation fund (SIF).

“At the end of 2022, we had roughly about CAD$ 12 million to CAD$ 3 million in the bank. We were awarded the Strategic Innovation Fund which is 34% of our project costs. Now that's retroactive back to August 21 so we expect somewhere between CAD$ 3 million and CAD$ 4 million claims coming in. We have warrants being exercised and all those will be out of warrants on February 8^th. We expect some capital to come in from that. As well, we have Alberta Innovates and there are funds coming in from that. The pilot cost itself is probably today about 40 to 45% covered by grant funding. Our other piece of that is, it's about CAD$ 2.7 million.”

2023 timeframe

E3 Lithium Ltd. has an eventful 2023 set out, with the company planning to release announcements throughout the year approaching the commencement of its LI-IX pilot plant. One of the first announcements, according to Doornbos, will be the receival of the necessary permits for the operation of the pilot plant.  

“In terms of the timeframe, there's a couple of really big announcements that are going to come prior to the pilot. The first one is more talking about the licence that we've applied for which we expect to get sometime in the next couple of months and then the mobilisation of some of the equipment coming to the site. That really means that we're alive and we're moving this.”

Doornbos explains that the permit for the pilot plant will be based on the company’s drill permit for the Clearwater project.

“We have a licence to drill the well that we drill and we're converting that licence to be able to operate the pilot. And that's the stock standard processing Alberta that you go through and we've applied for that. That's pending right now and we do expect to see it in the next couple of months.”

Another announcement by the company to watch out for according to Doornbos is its publishing of its KPIs. The Key Performance Indicators (KPIs) are quantifiable measuring criteria used by operations to test the performance of an operation.  

“The next announcement you're going to see from us is talking about the KPIs. We mentioned in the news announcement that we're likely to test multiple systems. And whenever we decide we're going to test out in the field, we're going to outline with a bit more detail to the market prior to going out there. And KPI, a key performance indicator, what we expect it will look like and what we want to see that we need to see for the commercial design.”

Future

E3 Lithium Ltd. plans to publish an updated mineral resource estimate of the Clearwater project in the near future according to Doornbos. The company has an expansion plan set out which will be implemented towards its goal.

“Measured and Indicated which is an increase in confidence of the reservoir and the resource that we have. That's hopefully coming on in Q1 and you need that to do the Pre-feasibility because you need to book the reserve and you need Measured and Indicated to do that. So that's a big next step forward.”

The company also aims to publish a pre-feasibility study (PFS) of the envisioned commercial Lithium Ion-Exchange operation by the end of 2023, with the initial works of the PFS already underway.

“The Pre-feasibility is underway right now so part of the Pre-feasibility is exactly what you're talking about. You're doing trade-off studies of what you want to deploy, and what technologies that are currently underway. We expect to have the Pre-feasibility out by the end of this year.”

The company has launched various studies it is actively underway, which are planned to be incorporated into the PFS.

“The staff here at E3 are busy designing the rest of the plant at a Pre-feasibility level. So all of the other optionality studies as well that need to happen are happening in the background today and those will get published in the Pre-feasibility when it’s out.”

Doornbos believes that the company’s planned initiatives in 2023 will systematically add to the company’s share price value. He believes that the commencement of the pilot plant, the increase in the project’s resources and the planned pre-feasibility study’s publishing will see that 2023 is a pivotal year for the company.

“I think that it's rare that you see companies’ re-rate overnight on one single announcement. I think that you're going to see this progression of rerate happen over the year as we get closer to that pilot and then start the pilot and then complete it. Some of the other things like the M&I, I mean that that is going to be a fundamental change in terms of the confidence of this resource. When we start talking about battery-grade hydroxide being produced, I think all of these things are going to incrementally impact the value of this company.”

To find out more, go to the E3 Lithium website