Compass Minerals (CMP:NYSE), yesterday announced that "it has identified a lithium brine resource of approximately 2.4 million metric tons lithium carbonate equivalent (LCE) at its active Ogden, Utah, solar evaporation site, including an indicated lithium resource within the ambient brine of the Great Salt Lake."
The company stated that its Ogden facility has produced sulfate of potash (SOP), salt and magnesium chloride products from the North Arm of the Great Salt Lake for more than 50 years. The firm noted that it has always endeavored to responsibly and sustainably manage mineral concentrations in the lake and plans to proceed with a strategic investigation to assess long-term opportunities for developing this newly identified lithium resource to meet the needs of the growing U.S. domestic lithium market.
Compass Minerals' President and CEO Kevin S. Crutchfield commented, "We are aggressively evaluating multiple paths forward for this significant lithium brine resource to optimize shareholder value, in parallel with a reassessment of our current capital allocation strategy…In a market hungry for domestically sourced lithium produced with minimal environmental impact, we believe a sustainable and readily available lithium resource like we have defined at our operations on the Great Salt Lake could be a true differentiator for our company."
The company indicated that an initial resource assessment prepared in order to define the lithium resource at its property showed "a total combined indicated and inferred lithium resources of approximately 127,000 Mt LCE within the interstitial brine (IB) held in the accumulated salt-mass reservoirs at Compass Minerals' Ogden solar evaporation site." In addition, the resource study also identified "an indicated lithium resource of approximately 2.32 million Mt LCE within the ambient brine of the Great Salt Lake," which Compass Minerals stated is readily accessible utilizing its present infrastructure.
The firm noted that following its 18-month review of several direct lithium extraction (DLE) technology providers, it is now involved in the final states of choosing an appropriate and qualified DLE technology partner.
The company stated that it anticipates it will be able produce 20,000-25,000 Mt of LCE of battery-grade lithium annually. The firm added that it expects that as much as 65% of future production will be derived from brine already extracted from the Great Salt Lake stored in various concentrations within its facility's existing magnesium chloride producing ponds, which are cable of returning up to 1,000-1,600 ppm following three years in the solar evaporation process. Compass advised that it is also actively conducting testing through third-party companies to evaluate the potential for conversion options to battery-grade lithium hydroxide.
Compass Minerals is based in Overland Park, Kan., and is a global provider of essential minerals including salt for winter roadway de-icing and other agricultural, consumer, industrial applications and specialty chemicals for water treatment and other industrial processes. The firm's plant nutrition business makes products that improve crop quality and yields while its specialty chemical business focuses on the water treatment industry and other industrial processes. The company stated that "it operates 16 production and packaging facilities with more than 2,000 employees throughout the U.S., Canada, Brazil and the U.K."
Compass Minerals started the day with a market cap of around $2.1 billion with approximately 34.1 million shares outstanding and a short interest of about 2.8%. CMP shares opened 17% higher today at $70.91 (+$10.45, +17.28%) over yesterday's $60.46 closing price and reached a new 52-week high this morning of $72.00. The stock has traded today between $67.38 and $72.00 per share and closed at $68.43 (+$7.97, +13.18%).
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