Milestone Reached in Commercial Direct Lithium Extraction Production Efforts

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Volt Lithium Corp.
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In a milestone in the company's lithium production efforts, Volt Lithium Corp. (VLT:TSV; VLTLF:US; I2D:FSE) has successfully installed its first field unit in the Permian Basin, Texas. The field unit can process over 200,000 liters (1,250 barrels) of oil field brine per day. This represents a major scale-up from Volt's previous capacity of 96,000 liters (600 barrels) per day. This announcement positions Volt as one of North America's leading contenders in commercial lithium production from oil field brine.

As Alex Wylie, president and CEO of Volt Lithium, stated in the press release, "Our team is thrilled to share that we have successfully deployed, installed, and commenced function-testing of the field unit on-site at our strategic partner's Permian basin location in West Texas."

The installation of this unit not only increases production capacity but also serves as a prime cog in Volt's strategic goals of commencing Direct Lithium Extraction (DLE) operations by the end of September 2024.

Looking at Direct Lithium Extraction

Direct lithium extraction (DLE) is a method of extraction that has been positioned as a solution to lithium's increasing global demand. This call for more lithium is largely driven by the electric vehicle (EV) boom and the ever-increasing need for energy storage.

As Energy News reported in July 2024, the Inflation Reduction Act (IRA) provided a significant financial boost to the lithium mining sector, with "the Department of Energy (DOE) Loan Programs Office" injecting "about US$11.7 billion to support new loans for energy projects, including mines for needed metals like lithium." This financial backing has strengthened the sector, which could enable companies like Volt to scale up their operations.

Technical Analyst Clive Maund rated Volt an Immediate Buy based on its recent consolidation and technical indicators.

The IRA has not only provided funding but also "incentivized metal and mineral extraction in the United States and in countries with a U.S. free trade agreement," making lithium mining more profitable and attractive for investors. Additionally, a 2023 IRA impact report from S&P Global cited "aggressive mine capacity additions" for lithium across the U.S., Chile, and Australia, indicating strong global growth in the sector.

Volt Lithium's specific focus on DLE positions it as a key player in addressing the surging demand for lithium, particularly in the EV market. According to Visual Capitalist in June, "over 40 million EVs will be sold annually by 2030," a significant leap from 2022, placing "incredible demand on lithium production." DLE offers faster extraction times, with Value the Markets noting that "DLE can cut production time from 18 to 24 months down to just one or two days," making it a more efficient method to meet the growing market needs. This efficiency could be crucial in helping Volt respond to demand while maintaining profitability.

Moreover, DLE has the potential to improve lithium recovery rates, making it a transformative technology in the sector. This method enhances production capabilities. This technology also aligns with the environmental, social, and governance (ESG) criteria that are increasingly important to investors. DLE's "reduced land and water usage" makes it an attractive option for sustainable lithium extraction, as highlighted by Value the Markets.

Volt Lithium's Catalysts 

Volt Lithium's recent installation of its field unit in the Permian Basin marks a major step forward in its journey toward full-scale commercial lithium production. In a recent call with Streetwise Reports, CEO Alex Wylie confirmed that the company is on track to begin lithium chloride production by the end of calendar Q3 2024. This will be the first time Volt produces lithium in the field, following two significant scale-ups in the past two months.

"We're not going from zero to 100,000 barrels a day; we're scaling up steadily," Wylie said, emphasizing the company's deliberate approach. Volt is targeting production of 100,000 barrels per day by mid-to-late 2025.

Wylie also highlighted Volt's competitive advantage in terms of cost, noting in the Streetwise Reports call, "Our cost to go to battery-grade metal is under US$2,900 a ton, which is something no other company in North America can achieve at this scale." With increasing demand for lithium and potential supply bottlenecks, Volt's strategy to leverage existing oil and gas infrastructure for lithium extraction offers a clear edge, the company noted.

"The oil and gas industries can meet the needs of lithium production for North America without new infrastructure," Wylie added, stressing the minimal capital outlay required for their operations.

The CEO also addressed the rising tariffs on lithium products imported from China during the call. By producing lithium domestically, Volt positions itself to meet North American demand without the financial burden of tariffs. "We're offering a North American solution, which is critical given the 100% tariffs on Chinese lithium," Wylie explained. This local production strategy aligns with growing demand in the electric vehicle and battery sectors, putting Volt in a strong position to disrupt the market with its low-cost, scalable operations.

Analysts Talk Volt Lithium

On August 27, 2024, in a report from 3L Capital, Volt's recent milestones, particularly the installation of its first field unit in the Permian Basin, were highlighted as key catalysts. The unit, with a processing capacity of 200,000 liters per day, marked a significant scale-up, doubling Volt's previous capabilities. The report noted, "Volt anticipates they can generate US$16.8M in annual operating cash flow at a lithium concentration of 31 mg/L and lithium hydroxide price of US$20,000/t." At a full production run rate of 100,000 barrels per day, 3L Capital estimated Volt's potential valuation could reach US$178M, suggesting up to 4x upside from its current market capitalization.

Additionally, the report emphasized that Volt's modular field unit design allows for cost-effective scaling. 3L Capital projected that Volt could achieve commercial production by 2025, stating, "We expect steady processing capacity increases over the next 12-18 months and the capital spend to be spread out." The analysis provided a positive outlook on Volt's ability to quickly enter the market with lithium chloride, potentially reducing operating expenses while still maintaining robust margins. This makes Volt an attractive opportunity as they scale up operations. 

In a separate commentary, Clive Maund, a technical analyst, expressed a bullish outlook on Volt Lithium during a call with Streetwise. Maund noted that Volt had "broken out of a base pattern of approximately a year's duration on strong volume," signaling a strong technical position. He added, "This is viewed as decidedly bullish and as a sign that it will start higher again soon and probably imminently," rating Volt an Immediate Buy based on its recent consolidation and technical indicators.

Ownership and Share Structure

Refinitiv provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 15.54% of the company.

According to Refinitiv, James Alexander Wylie owns 8.73% of the company with 11.38 million shares, Martin Scase owns 4.94% of the company with 6.44 million shares, Warner Uhl owns 0.88% of the company with 1.15 million shares, Morgan Tiernan owns 0.39% of the company with 0.50 million shares, and Kyle Robert Hookey owns 0.11% of the company with 0.14 million shares.

Refinitiv reports that institutions own 1.84% of the company, as Eagle Claw Investments Pty. Ltd. owns 1.07% of the company with 1.40 million shares, and U.S. Global Investors, Inc. owns 0.77% of the company with 1.00 million shares.

According to Market Watch, the company has 140.1 million shares outstanding and a market cap of CA$44.4 million.

It trades in the 52-week range between CA$0.16 and CA$0.49.