TETRA TECHNOLOGIES, INC., ANNOUNCES COMPLETION OF TECHNICAL RESOURCES STUDY FOR THE ARKANSAS LITHIUM AND BROMINE BRINE UNIT
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Insights
The completion of the Technical Resources Study for TETRA Technologies' Evergreen Brine Unit signifies a considerable advancement in the company's resource assessment capabilities. The delineation of measured, indicated and inferred resources for bromine and lithium provides a clearer picture of the potential scale of these assets. The substantial increase in estimated lithium resources, noted as exceeding expectations and potentially representing the richest lithium brine resource in the U.S., could position TETRA as a significant player in the lithium market. This is particularly relevant given the growing demand for lithium in battery production and energy storage solutions.
The report's findings may lead to a reassessment of the company's asset valuation and future revenue projections. The potential for over 50 years of production based on current estimates could attract long-term investors seeking exposure to commodities critical for the transition to low carbon energy. However, the conversion of resources to reserves is contingent on achieving an 80% ultimate recovery rate, which is not guaranteed. Investors should monitor the progression of the front-end engineering and design (FEED) study and subsequent economic analysis for a more comprehensive understanding of the project's viability.
Investors should note the strategic implications of TETRA Technologies' resource report, particularly the estimated volumes of bromine and lithium suggesting extensive production capabilities. The company's intention to publish an economic analysis post-lithium FEED study completion could provide critical insights into the project's profitability and impact on the company's financial health. The acquisition of a 120-acre plant site within TETRA's existing mineral leases indicates proactive steps towards operational readiness, which may enhance investor confidence in the project's execution.
Moreover, the mention of a joint venture partner for the operation of the bromine and lithium plants introduces the possibility of shared investment and risk, as well as potential synergies. The market will likely respond to these developments based on the perceived strength of the partnership and the strategic fit with TETRA's expansion into low carbon energy markets. It is crucial for investors to consider the capital expenditure requirements and the timeline for the transition from resource estimation to actual production.
TETRA Technologies' report underscores the company's pivot towards the low carbon energy sector, leveraging its expertise in chemistry and mineral resources. The focus on lithium and bromine is timely, as these elements are critical for energy storage technologies and are expected to see increased demand in line with the global shift towards renewable energy sources. The SK-1300, NI-43-101 or JORC-compliant technical report summary standards followed by TETRA ensure a level of credibility and transparency in resource reporting that is valued by stakeholders.
The company's collaboration with RESPEC and Lonquist for the completion of the report reflects a commitment to utilizing high-quality technical support, which could enhance the reliability of the estimated resource quantities. The potential for TETRA to contribute to the energy storage market with its TETRA PureFlow® product and its partnership with CarbonFree for carbon capture utilization and storage technology further illustrates the company's strategic alignment with industry trends towards sustainability. Stakeholders should assess how these initiatives might influence TETRA's market positioning and competitive advantage in the evolving energy landscape.
The Report estimated that the Evergreen Brine Unit contains the following:
- 1,413,000 tons of elemental bromine consisting of approximately:
- 329,000 tons of Measured Resources
- 543,000 tons of Indicated Resources
- 541,000 tons of Inferred Resources
- 137,000 tons of lithium consisting of approximately:
- 32,000 tons of Measured Resources
- 53,000 tons of Indicated Resources
- 52,000 tons of Inferred Resources
Using a conversion factor of 5.323 to convert elemental lithium to lithium carbonate equivalent (LCE) it is estimated to contain in total 729,251 tons of LCE.
Mineral resources are estimates and therefore, inherently imprecise, and dependent upon a number of assumptions, which are further discussed in the Report. The resources estimates and brine ownership percentages in the Report are consistent with and assume completion of existing contractual obligations. The entire Report is available on TETRA website at: Investor Relations - Presentations (tetratec.com)
Following the drilling and completion of a second test well within the Evergreen Brine Unit and utilizing information available from Standard Lithium wells near the Evergreen Brine Unit, the Report was completed and compiled by RESPEC Company LLC ("RESPEC") with geological and reservoir technical support provided by Lonquist Engineering ("Lonquist"). RESPEC is a leading consulting firm to the mining & energy, water and natural resources industries. Lonquist is a leading petroleum engineering, underground storge engineering and reservoir engineering firm. The second test well was completed in August 2023 and provided additional reservoir information, including lithium and bromine fluid analysis, reservoir pressures and thickness, porosity, and permeability, amongst other information to meet the higher quality resource standards in this Report. An extensive well test was also completed on the well which provided brine deliverability information consistent with the planned and modelled flow rates from future production wells.
Brady
"As reported previously, the SK-1300 Section 19 Economic Analysis report for bromine was published in early in 2023. The target for completing the lithium front end engineering and design study (FEED) is early 2024. Should these resources be converted to reserves with an estimated
"Once our lithium FEED study is completed, we intend to publish an economic analysis for the brine unit, which will include the lithium economic analysis and an updated bromine economic analysis reflecting the cost synergies of a common plant site infrastructure and operations. We are also pleased to report that we have entered into a commitment, subject to completion of customary due diligence, to purchase approximately 120-acre plant site located within and on the southern side of the additional 35,000 gross acres of mineral leases held by TETRA. The plant site has been chosen to accommodate both the bromine and lithium plants to be operated by TETRA and its expected joint venture partner and is a mile north of the 6,138-acre brine unit."
Company Overview
TETRA Technologies, Inc. is an energy services and solutions company operating on six continents with a focus on bromine-based completion fluids, calcium chloride, water management solutions, frac flowback, and production well testing services. Calcium chloride is used in the oil and gas, industrial, agricultural, road, food, and beverage markets. TETRA is evolving its business model by expanding into the low carbon energy markets with its chemistry expertise, key mineral acreage, and global infrastructure. Low carbon energy initiatives include commercialization of TETRA PureFlow®, an ultra-pure zinc bromide clear brine fluid for stationary batteries and energy storage; advancing an innovative carbon capture utilization and storage technology with CarbonFree to capture CO2 and mineralize emissions to make commercial, carbon-negative chemicals; and development of TETRA's lithium and bromine mineral acreage to meet the growing demand for oil and gas products and energy storage. Visit the Company's website at www.tetratec.com for more information.
Cautionary Statement Regarding Forward Looking Statements
This news release includes certain statements that are deemed to be forward-looking statements. Generally, the use of words such as "may," "see," "expectation," "expect," "intend," "estimate," "projects," "anticipate," "believe," "assume," "could," "should," "plans," "targets" or similar expressions that convey the uncertainty of future events, activities, expectations or outcomes identify forward-looking statements that the Company intends to be included within the safe harbor protections provided by the federal securities laws. These forward-looking statements include statements concerning measured, indicated and inferred mineral resources of lithium and bromine, the potential extraction of lithium and bromine from our Brine Unit, the economic viability thereof, the demand for such resources, the timing and costs of such activities, and the expected revenues and profits from such activities; the accuracy of our resources report and initial economic assessment regarding our lithium and bromine acreage; projections or forecasts concerning the Company's business activities, and statements regarding the Company's beliefs, expectations, plans, goals, future events and performance, and other statements that are not purely historical. With respect to the Company's disclosures of measured, indicated and inferred mineral resources, including bromine and lithium carbonate equivalent concentrations, it is uncertain if they will ever be economically developed. Investors are cautioned that mineral resources do not have demonstrated economic value and further exploration may not result in the estimation of a mineral reserve. Further, there are a number of uncertainties related to processing lithium, which is an inherently difficult process. Therefore, you are cautioned not to assume that all or any part of our resources can be economically or legally commercialized. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of risks and uncertainties, many of which are beyond the control of the Company. With respect to the Company's disclosures of the MOU with Saltwerx, it is uncertain about the ability of the parties to successfully negotiate one or more definitive agreements, the future relationship between the parties, and the ability to successfully and economically produce lithium and bromine from the brine unit. Investors are cautioned that any such statements are not guarantees of future performance or results and that actual results or developments may differ materially from those projected in the forward-looking statements. Some of the factors that could affect actual results are described in the section titled "Risk Factors" contained in the Company's Annual Reports on Form 10-K, as well as other risks identified from time to time in its reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. Investors should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and the Company undertakes no obligation to update or revise any forward-looking statements, except as may be required by law.
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SOURCE TETRA Technologies, Inc.
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