E3 Lithium (TSXV:ETL) (OTCQX:EEMMF) finished the production test on its first well at the Clearwater Project Area in the Bashaw district today.
The test was run to confirm the commercial viability from the lithium-rich brine from the company’s resource in the Leduc Reservoir.
“Testing the producibility and injectivity of the Leduc Reservoir within our Clearwater Project Area is an important and necessary step for developing our Aquifer Management Plan. The data we’ve collected are key as we look to upgrade our resources from Inferred to Measured and Indicated. The Aquifer Management Plan builds out our commercial brine production design, which, combined with the upgraded resource, should enable the establishment of a Reserve in Alberta, enabling the province to become a significant lithium jurisdiction,” said Chris Doornbos, president and CEO of E3 Lithium.
E3 Lithium is a development company. E3’s goal is to produce high purity, battery grade lithium products and intends to accomplish this by scaling its DLE technology towards commercialization. The company has access to a total of 24.3 million tonnes of lithium carbonate equivalent (LCE) mineral resources in Alberta. The company’s preliminary economic assessment indicated the Clearwater lithium project has NPV 8 per cent of USD $1.1 billion with 32 per cent internal rate of return pre-tax, and USD $820 million with a 27 per cent internal return rate after tax.
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Lithium and production
The production test involved flowing flowing 400m3/d of brine to surface for five days. The test provided E3 with data to support commercial viability of producing brine from the reservoir. The test confirmed injectivity capacity by reinjecting the brine back into the reservoir, which is part of E3’s sustainability process. Afterwards, the test included re-injecting the produced brine in under two days at 1,200m3/d.
E3 Lithium acquired the Clearwater property gross royalty earlier this month. The royalty was originally negotiated in 2016 during the amalgamation of E3’s permits in the Clearwater project area. The original agreement included the option to purchase the royalty by Sept. 30, 2022. The PEA the company performed in 2022 pegged the royalty at $8.5 million per year. But using today’s lithium prices, the royalty would be higher. Also, that’s why the company decided to acquire the royalty for $800,000.