Grounded Lithium Reports First Quarter 2024 Financial and Operating Results

Rhea-AI Summary

Grounded Lithium Corp. (OTCQB: GRDAF) reported its financial and operating results for Q1 2024. Key highlights include a net comprehensive loss of CAD 507,607, a significant improvement from the CAD 1,682,288 loss reported in Q1 2023. The company also announced entering into agreements with Denison Mines Corp., which are expected to fund a field pilot for the KLP project. Operating cash flow used was CAD 411,756, down from CAD 1,730,836 in the same period last year. Capital expenditures saw a disposition of CAD 800,000. The company's working capital surplus was CAD 303,222, down from CAD 890,061 a year earlier. Shares outstanding increased to 78,279,227 from 69,656,423. Further details can be found in their financial statements and management's discussion on their website or sedarplus.ca.

Positive

• Net comprehensive loss reduced to CAD 507,607 from CAD 1,682,288 year-over-year.
• Operating cash flow used decreased to CAD 411,756 from CAD 1,730,836.
• Agreement with Denison Mines expected to provide sufficient funding for KLP project field pilot.
• Capital expenditures turned into a disposition of CAD 800,000.
• Shares outstanding increased to 78,279,227 from 69,656,423, indicating potential investor confidence.

Negative

• Working capital surplus declined to CAD 303,222 from CAD 890,061 year-over-year.
• Funds flow used in operations was CAD 467,640, down from CAD 1,473,056 but still negative.
• Increase in shares outstanding could lead to shareholder dilution.

Financial Analyst

The financial results indicate a significant reduction in net comprehensive loss from 1,682,288 in Q1 2023 to 507,607 in Q1 2024, representing an improvement in the company's financial health. Notably, cash flow used in operating activities also decreased from 1,730,836 to 411,756, which reflects better operational efficiency. However, the working capital surplus dropped from 890,061 to 303,222, which could raise liquidity concerns if the trend continues.

The capital expenditures saw a significant shift, with a negative capital expenditure of 800,000, which likely indicates asset disposals rather than traditional capital investment. While this reduces immediate financial strain, it may affect long-term growth prospects. Analyzing these changes, it seems the company is focusing on short-term financial stabilization, possibly at the expense of longer-term investment.

For investors, the reduced losses and operational cash outflows are positive signs pointing towards better financial management. However, the drop in working capital and the capital expenditures strategy need careful monitoring as they may impact the company's ability to fund future projects and growth.

Market Research Analyst

The agreement with Denison Mines Corp is a strategic move, potentially providing substantial funding for the field pilot of the KLP project. This partnership can be seen as a validation of Grounded Lithium Corp's projects and technological potential, which might drive investor confidence. The commitment from Denison to advance the project on a priority basis and possibly provide additional capital during the earn-in period is significant. This could lead to accelerated project timelines and enhanced project viability.

From a market perspective, partnerships like these often lead to positive sentiment and can influence stock prices favorably. They also provide a strategic advantage, leveraging Denison's expertise and resources. Investors should be optimistic about this collaboration as it may mitigate some financial risks and provide a clearer path to project advancement.

Nonetheless, the long-term success hinges on the outcomes of the pilot and subsequent evaluations. Investors should look for updates on these milestones to gauge the real impact of this agreement on the company’s future.

Energy Sector Analyst

The financial and operational update reflects broader industry trends where companies are striving for operational efficiency and securing strategic partnerships to remain competitive. The lithium sector is notably volatile but holds substantial growth potential owing to the increasing demand for batteries in electric vehicles and renewable energy storage solutions.

Grounded Lithium's strategy to secure funding through partnerships rather than traditional financing routes could provide a competitive edge by reducing financial pressures and aligning with experienced industry players. This approach could enable the company to focus resources on technology and project development, key for long-term success in the energy sector.

However, it’s important to monitor how these partnerships progress, as delays or underperformance in the pilot could dampen prospects. For retail investors, the company’s efforts to improve financial health and secure strategic partnerships are promising, yet they should remain aware of the inherent sector risks and the need for continuous technological and operational advancements.

CALGARY, AB, May 22, 2024 /PRNewswire/ - (TSXV: GRD) (OTCQB: GRDAF) - Grounded Lithium Corp. ("GLC" or the "Company") announces our financial and operating results for the three month period ended March 31, 2024.  Selected financial and operational information is set out below and should be read in conjunction with the Company's March 31, 2024 financial statements and the related management's discussion and analysis, which are available for review at www.sedarplus.ca or the Company's website at www.groundedlithium.com.

First Quarter 2024 Financial and Operational Highlights

• On January 16, 2024, the Company announced the entering of a series of agreements with Denison Mines Corp (TSX: DML; NYSE American: DNN) ("Denison"), highlighted by the Earn-In Agreement (the "Agreement").  The Agreement is expected to provide more than sufficient funding for a field pilot (the "Pilot") for the KLP which both the Company and Denison (collectively, the "Parties") plan to advance on a priority basis.  Beyond the Pilot, Denison may also provide further capital during the earn-in period to fund other activities as necessary to drive the overall KLP value such as further technical evaluations and studies, drilling, sampling and expenditures to maintain the KLP lands in good standing.

(CAD$, except per share amounts and common shares outstanding)
		Three Months Ended March 31,
		2024	2023
FINANCIAL RESULTS
Net comprehensive loss		507,607	1,682,288
Per share - basic and diluted		0.01	0.02
Cash flow used in operating activities		411,756	1,730,836
Per share - basic and diluted		0.01	0.02
Funds flow used in operations		467,640	1,473,056
Per share - basic and diluted		0.01	0.02
Capital expenditures
Capital expenditures (dispositions)		(800,000)	443,637
Liquidity
Working capital surplus		303,222	890,061
Common shares outstanding
Weighted average - basic and diluted		77,126,290	68,603,316
Outstanding, end of period		78,279,227	69,656,423

About Grounded Lithium Corp.

GLC is a publicly traded lithium brine exploration and development company that controls approximately 1.0 million metric tonnes of Measured & Indicated lithium carbonate equivalent mineral resource and approximately 3.2 million metric tonnes of Inferred lithium carbonate equivalent resource over our focused land holdings in Southwest Saskatchewan as per the Company's updated PEA.  The updated PEA, titled "NI 43-101 Technical Report: Preliminary Economic Assessment Kindersley Lithium Project – Phase 1 Update" dated November 7, 2023 and effective as of June 30, 2023, reports a Phase 1 NPV₈ after-tax of US$1.0 billion with an after-tax IRR of 48.5%.  GLC's multi-faceted business model involves the consolidation, delineation, exploitation and ultimately development of our opportunity base to fulfill our vision to build a best-in-class, environmentally responsible, Canadian lithium producer supporting the global energy transition shift.  U.S. investors can find current financial disclosure and Real-Time Level 2 quotes for the Company on https://www.otcmarkets.com/. 

Qualified Person

Scientific and technical information contained in this press release has been prepared under the supervision of Doug Ashton, P.Eng., Alexey Romanov, P. Geo., Meghan Klein, P. Eng., Dean Quirk, P.Eng., Jeffrey Weiss, P.Eng., Chad Hitchings., P.L. Eng., and Michael Munteanu, P.Eng., each of whom is a qualified person within the meaning of NI 43-101.

Forward-Looking Statements

This press release may contain forward-looking statements and forward-looking information within the meaning of applicable Canadian securities laws. The opinions, forecasts, projections and statements about future events of results, are forward looking information, forward-looking statements or financial outlooks (collectively, "forward-looking statements") under the meaning of applicable Canadian securities laws. These statements are made as of the date of this press release and the fact that this press release remains available does not constitute a representation by GLC that the Company believes these forward-looking statements continue to be true as of any subsequent date. Although GLC believes that the assumptions underlying, and expectations reflected in, these forward-looking statements are reasonable, it can give no assurance that these assumptions and expectations will prove to be correct. Such statements include, but are not limited to, statements regarding the internal rates of return and net present values of the KLP, activities funded by Denison to drive the KLP value and GLC's vision of becoming a best-in-class, environmentally responsible, Canadian lithium producer supporting the global energy transition.

Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: GLC's expectation that our operations will be in Western Canada, unexpected problems can arise due to technical difficulties and operational difficulties which impact the production, transport or sale of our products; geographic and weather conditions can impact production; the risk that current global economic and credit conditions may impact commodity prices and consumption more than GLC currently predicts; the failure to obtain financing on reasonable terms; volatility in the trading price of the common shares of the Company; the risk that unexpected delays and difficulties in developing currently owned properties may occur; the failure of drilling to result in commercial projects; unexpected delays due to the limited availability of drilling equipment and personnel; and the other risk factors detailed from time to time in GLC's periodic reports. GLC's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

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SOURCE Grounded Lithium Corp.

FAQ

What were Grounded Lithium's (GRDAF) financial results for Q1 2024?

Grounded Lithium reported a net comprehensive loss of CAD 507,607 and cash flow used in operating activities of CAD 411,756 for Q1 2024.

How has Grounded Lithium's net loss changed compared to Q1 2023?

The net comprehensive loss decreased significantly to CAD 507,607 in Q1 2024 from CAD 1,682,288 in Q1 2023.

What significant agreements did Grounded Lithium enter into during Q1 2024?

Grounded Lithium entered into agreements with Denison Mines, expected to fund a field pilot for the KLP project.

How did Grounded Lithium's working capital change in Q1 2024?

The working capital surplus declined to CAD 303,222 from CAD 890,061 in Q1 2023.

What are the key highlights from Grounded Lithium's Q1 2024 report?

Key highlights include a reduced net comprehensive loss, decreased operating cash flow used, and agreements with Denison Mines for the KLP project.