Lithium Company Looking to the Future

Grounded Lithium Corp. (GRD:TSX.V; GRDAF:OTCQB) released financial and operating information from Q1 of 2023.

The company has a number of events on the horizon, including the conclusion of its DLE technology evaluation and selection and delineation drilling on the company's projects. Additionally, the company recently brought on Koch Technology Solutions as a Lithium extraction provider.

Overview and Koch Agreement

Grounded Lithium has released financial and operating results from Q1. This 3-month period ended on March 31, 2023. On January 5, 2023, the company received a receipt for the filing of the short-form prospectus for its non-brokered private placement of 12 million special warrants of the company. This is for gross proceeds of CA$3 million, completed on November 4, 2022, qualifying 12 million common shares and reserving for insurance 12 million warrants at an exercise price of 50 cents, expiring on November 4, 2024. On March 13, 2023, the company signed a lithium processing test work program assessment with Koch Technology Solutions (KTS).

Under the Koch agreement, the company's brine was processed using KTS's proprietary Li-Pro technology at a KES location in Pickering, Ontario, in order to determine the efficacy of Li-Pro for direct lithium extraction (DLE). On March 16, 2023, the company closed its acquisition of an additional 33 sections (8,498 hectares) of acreage contiguous to the company's existing landholdings in the Kindersley lithium project (KLP) in Western Saskatchewan.

The purchase price was US$428,328 and was composed of cash consideration of US$178,328 and the issuance of 779,557 shares at a deemed value of US$250,000. On March 21, 2023, the company signed a second lithium processing test work program assessment to conduct lithium extraction testing on brine sourced from the KLP.

"This is because most companies operating in this sector are based in South America and rely on evaporation ponds to extract lithium, whereas Grounded Lithium plans on utilizing an emerging technology called Direct Lithium Extraction (DLE)," Mark Zaret of Spartan Fund Management said.

In a press release dated May 25, 2023, the company announced it had reached an agreement with Koch Technology Solution that it will act as the company's lithium extraction provider. Observed lithium extraction recovery rates from KLP brine averaged 98% over multiple passes. The technology also rejected other key ions found in Kindersley Lithium Project (KLP) brine deposits with observed rejection factors of 99%.

The company received a proposal from KTS to provide Li-Pro technology under a staged evaluation program that would last several months to determine more extensive extraction results over the long term. KTS will also assist in the preparation of a detailed feasibility-level engineering solution using the Li-Pro technology in a full-scale central processing facility to evaluate overall project commerciality.

Lithium Sees Growing Demand

Analysts from Citi believed that lithium prices would not see a downturn anytime soon. EV sales are expected to rise, and spot lithium has rebounded from a low period in April to US$28,000 per ton. Various governments, including India and South Korea, are looking to bolster lithium as they try to move towards an environmentally friendly future. Korea, in particular, has constructed infrastructure and procurement systems that support lithium inside of the country.

As EVs see sustained demand, car companies, such as Ford Motor Company, are also looking to get into the market. Ford recently struck a deal with the lithium company Albemarle to supply 100,000t of lithium that will go towards the creation of approximately 3 million Ford EV batteries. Ford and Albemarle are also exploring avenues to develop a closed-loop solution for lithium-ion battery recycling in an attempt to keep lithium mined from unaudited sources out of their pipeline. As consumers grow more concerned about energy consumption related to car ownership, car companies are approaching lithium providers in an attempt to close the gap.

Catalysts

Mark Zaret of Spartan Fund Management listed Grounded Lithium as a point of interest. According to Mark, "This is because most companies operating in this sector are based in South America and rely on evaporation ponds to extract lithium, whereas Grounded Lithium plans on utilizing an emerging technology called Direct Lithium Extraction (DLE)." As a company on the cutting edge, it has the potential to be more efficient than traditional evaporation methods. 

Grounded Lithium just concluded the company's DLE technology and evaluation and selection process. The company intends to release results from its maiden preliminary economic assessment by the end of Q2 of 2023. Delineation drilling will occur on the company's land base through a combination of new wells and re-entries of existing wells in order to provide greater certainty on the lithium resources in place.

The objective of this is to reclassify a portion of the company's inferred and indicated lithium resources. The company, upon conclusion of the DLE selection process, will process, engineer, plan, permit, and construct a field pilot to assess the long-term efficacy of the company's selected extraction and refining process flow sheet. 

Ownership and Share Structure

Management and insiders own 14% of the company, according to Reuters. Richard Gregg Smith owns 3.06% with 2.13 million shares, Greg G. Phaneuf owns 2.1% with 1.45 million shares, and Lawrence Patrick Joseph Fisher owns 1.27% with 0.88 million shares. Wayne Gaskin owns 2.4% with 1.67  million shares. Mark Grant McMurray owns 0.34% with 0.24 million shares, John David Wright owns 0.28% with 0.19 million shares, Dale Shipman owns 0.2% with 0.18 million shares, and Geoff Speers owns 0.2% with 0.18 million shares.

As for institutions, Carret Asset Management LLC owns 0.02% with 0.02 million shares. Total institutional ownership is 17%

According to Market Watch, the company has a market cap of CA$11.83 million. There are 69.7 million shares outstanding, with 39.3 million free-float traded shares. They trade in the 52-week range between CA$0.17 and CA$0.50.

Important Disclosures:

1. Grounded Lithium Corp. are billboard sponsor(s) of Streetwise Reports and has paid SWR a sponsorship fee between US$3,000 and US$5,000. 
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Grounded Lithium.
3. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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