Standard Lithium Reports Fiscal Second Quarter 2024 Results, Schedules Investor Update Call
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Insights
Standard Lithium's recent financial and operating results reflect a strategic positioning within the lithium market, which is crucial given the commodity's pivotal role in the transition to renewable energy and electric vehicles. Analyzing the company's financial health, it is evident that the absence of long-term debt and a positive working capital position offer a competitive edge, especially in a sector where project capital intensity is high. The company's approach to an at-the-market offering program as a financing strategy is noteworthy. This method can provide flexibility in capital raising without the need to commit to large blocks of funding that might dilute shareholder value excessively. However, the reliance on such a program can also introduce volatility in share price and raise concerns about potential dilution if used extensively.
The strategic partnership and off-take agreement discussions are particularly significant as they can secure future revenue streams and provide validation of the project's viability. This is critical for investor confidence, especially in an industry where project development timelines can be protracted. The company's emphasis on non-dilutive financing options suggests a commitment to preserving shareholder value while advancing project development, which could be seen as a positive signal to the market.
From a financial perspective, Standard Lithium's report of no debt obligations and the maintenance of cash reserves are indicative of prudent financial management. The company's strategic use of an at-the-market (ATM) program to address short-term financing needs allows for incremental capital raising, which can be less disruptive to the market compared to larger, one-time offerings. The ATM program's success, reflected in the proceeds reported, is a testament to investor confidence, although the modest size of the proceeds suggests a conservative approach to its use.
Standard Lithium's appointment of experienced executives in key financial and development roles is a proactive step towards enhancing its strategic and operational capabilities. The backgrounds of these executives in oil and gas and investment banking, respectively, could bring valuable cross-industry experience to the lithium sector, potentially translating into innovative financing strategies and robust project development plans.
The lithium sector's dynamics, as outlined by Standard Lithium's CEO, underscore the importance of geopolitical stability and policy support in project differentiation. The company's focus on the Smackover region, with its high lithium brine values, not only positions it advantageously within North America but also within the global energy sector's shift towards sustainable resources. The identification of a globally-significant lithium brine asset in East Texas with high lithium concentrations could have a substantial impact on the supply chain, particularly for the United States, which is increasingly focused on securing domestic sources of critical minerals.
Furthermore, the progression of the South West Arkansas Project and the filing of the Phase 1A's Definitive Feasibility Study are crucial steps in de-risking the projects and moving closer to commercial production. The involvement of a company like Ausenco in the FEED and DFS stages and the engagement with Citi for strategic financing and partnerships, are indicative of the project's advancing maturity and the company's commitment to adhering to industry best practices in project development.
Company Continues to Advance Strategic and Commercial Discussions; Reports No Debt Obligations and Cash On-Hand
VANCOUVER, British Columbia, Feb. 08, 2024 (GLOBE NEWSWIRE) -- Standard Lithium Ltd. (“Standard Lithium” or the “Company”) (TSXV:SLI) (NYSE American:SLI) (FRA:S5L), a leading near-commercial lithium development company, today reported its financial and operating results for the fiscal second quarter ended December 31, 2023.
"In 2023, the lithium sector has been under pressure, with lithium prices experiencing a significant decrease from the all-time highs seen in 2022, a situation compounded by the prevailing interest rate environment and other macroeconomic factors," says Robert Mintak, CEO and Director of Standard Lithium. "Despite the industry-wide market challenge, the long-term fundamentals for lithium continue to be strong, particularly for projects situated in geopolitically stable regions such as the United States, where policy support and other key strategic advantages are enabling for project differentiation. The Smackover region, in particular, is attracting interest from major players in the global energy sector. Discussions around strategic partnerships, joint development opportunities, and long-term off-take are robust and moving forward. In response to these market dynamics, we are taking responsible and appropriate actions that are in the best interests of our shareholders, ensuring that Standard Lithium remains well-positioned to capitalize on what continues to be an exciting sector with extraordinary growth prospects."
Salah Gamoudi, Chief Financial Officer of Standard Lithium added: “Despite a challenging commodity price environment, we expect to sustain our current operations through fiscal year 2024 with our cash available on-hand and the strategic use of our ATM program in place. Our balance sheet remains strong, with no long-term debt obligations and positive working capital, giving us the flexibility and optionality to make prudent, disciplined decisions for our shareholders. We continue to evaluate and pursue attractive, non-dilutive financing options with the guidance of our financial advisors, and as Robert mentioned, we are progressing discussions with potential strategic partners and off-takers. The need for additional capital at this point in our Company’s evolution is natural as we continue to advance our suite of projects in a responsible manner taking into account the various market dynamics, and with a focus on opportunities that are the most value accretive for our shareholders in the long-term.”
Highlights of the Second Fiscal Quarter Ended December 31, 2023
- Appointed key executives to the leadership team to support the Company’s next stage of development and growth. Salah Gamoudi was appointed as Chief Financial Officer and Michael Barman joined as Chief Development Officer. Mr. Gamoudi brings extensive experience from the oil and gas sector, including a transformative tenure at Sandridge Energy that successfully generated significant value for its shareholders. He is expected to lead the financing strategy as well as enhance the Company’s accounting and investor relations functions. Mr. Barman brings nearly 20 years of experience advising senior executives and their boards, most recently serving as Managing Director in Investment Banking at Stifel Nicolaus Canada Inc. (formerly GMP Securities L.P.). He is leading late-stage discussions related to project partnerships and off-take agreements.
- Released the results of the Company’s fully optimized and proven DLE Process. During a representative period of continuous operation the LiPRO™ LSS achieved an average lithium recovery of
96.1% and rejected, on average, over99% of key contaminants including over95% of boron. - Concluded East Texas drilling program that yielded the highest-ever reported lithium brine values in North America. The Company identified a globally-significant lithium brine asset with confirmed lithium concentrations of up to 806 mg/L and an average grade of 644 mg/L from three newly drilled wells. In addition, the results included highly elevated concentrations of potassium and bromine, demonstrating the potential for significant upside.
- Secured lithium brine production rights on South West Arkansas (“SWA”) Project. The Company exercised it’s option with TETRA Technologies, Inc. and secured exclusive brine production rights on approximately 27,000 net acres of brine leases included within the footprint of the SWA Project. The Company is now progressing SWA through front-end engineering design (“FEED”) and the Definitive Feasiblity Study (“DFS”) stages. Subsequent to the fiscal second quarter-end, the Company selected Ausenco Engineering Canada ULC to lead the FEED and DFS studies for the project.
- Progressed the Company’s first commercial lithium project with the filing of Phase 1A’s Definitive Feasiblity Study. The Phase 1A Project located in El Dorado, Arkansas is expected to initially produce 5,700 tonnes per annum (“tpa”) of battery-quality lithium carbonate over a 25-year operating life.
- Engaged Citi for strategic financing and partnerships for the development of the Phase 1A Project, as well as advancing the South West Arkansas Project and initiatives in East Texas. LANXESS communicated it’s plans to commercialize its role in the Phase 1A Project with agreements under negotiation for brine supply, site lease, and infrastructure services, key to defining the operational framework.
- During the quarter, the Company commenced an at-the-market offering program, issuing a total of 100,100 common shares on the TSX Venture Exchange and 1,326,259 common shares on the NYSE American LLC, providing gross proceeds of Ca
$0.3 million and US$3.3 million , respectively. - The Company has no term or revolving debt obligations as of December 31, 2023.
- Cash and equivalents and working capital of Ca
$15.8 million and Ca$5.7 million , respectively, as of second fiscal quarter end, and in combination with the prudent and strategic use of our at-the-market offering program as a tool to fund any short term financing needs, are expected to sustain the Company through the 2024 fiscal year.
Consolidated Financial Statements
The Company’s interim financial statements and management's discussion and analysis for the second quarter 2024 ended December 31, 2023, are available on the Company's website at https://www.standardlithium.com/ and under the Company’s profiles on SEDAR+ at www.sedarplus.com and EDGAR at www.sec.gov.
Q2 FISCAL RESULTS CONFERENCE CALL AND WEBCAST
The Company will hold a conference call and webcast to discuss its second quarter fiscal results on Monday, February 12 at 11:00 a.m. EST. Access to the call is available via webcast or direct dial. A link to the webcast and direct dial numbers are provided below:
Conference Call and Webcast Details:
Standard Lithium Fiscal Q2 Earnings Call and Webcast
February 12, 2024 11:00 AM (GMT-05:00) Eastern Time (US and Canada)
Participant Information:
North America Toll-Free: (800) 715-9871
UK Toll-Free: +44.800.358.0970
International Toll: (646) 307-1963
Attendee Webcast Link:
https://events.q4inc.com/attendee/233770702
Qualified Person
Steve Ross, P.Geol., a qualified person as defined by National Instrument 43-101, and Vice President Resource Development for the Company, has reviewed and approved the relevant scientific and technical information in this news release.
About Standard Lithium Ltd.
Standard Lithium is a leading near-commercial lithium development company focused on the sustainable development of a portfolio of lithium-brine bearing properties in the United States. The Company prioritizes brine projects characterized by high-grade resources, robust infrastructure, skilled labor, and streamlined permitting. The Company aims to achieve sustainable, commercial-scale lithium production via the application of a scalable and fully-integrated Direct Lithium Extraction (“DLE”) and purification process. The Company’s signature projects, the Phase 1A Project and the South West Arkansas Project, are located on the Smackover Formation in southern Arkansas, a region with a longstanding and established brine processing industry. The Company has also identified a number of highly prospective lithium brine project areas in the Smackover Formation in East Texas and began an extensive brine leasing program in the key project areas. In addition, the Company has an interest in certain mineral leases located in the Mojave Desert in San Bernardino County, California.
Standard Lithium trades on both the TSX Venture Exchange and the NYSE American under the symbol “SLI”; and on the Frankfurt Stock Exchange under the symbol “S5L”. Please visit the Company’s website at www.standardlithium.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release may contain certain “Forward-Looking Statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target, “plan”, “forecast”, “may”, “schedule” and other similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to intended development timelines, future prices of commodities, accuracy of mineral or resource exploration activity, reserves or resources, regulatory or government requirements or approvals, the reliability of third party information, continued access to mineral properties or infrastructure, fluctuations in the market for lithium and its derivatives, changes in exploration costs and government regulation in Canada and the United States, and other factors or information. Such statements represent the Company’s current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.
FAQ
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