Lithos Group Ltd. (LITS:CBOE.CA; LITSF:OTCMKTS; FSE:YU8; WKN:A3ES4Q) provided a Q3/24 corporate and operational update highlighting the company's innovation and progress with its proprietary technologies, noted a news release.
"Our achievements this quarter are just the beginning of a transformative period for Lithos," Chief Executive Officer Scott Taylor said in the release. "As demand for lithium continues to grow with the global push towards electric vehicles and renewable energy storage, we are confident that our innovative technologies position us to become a key player in meeting that demand sustainably."
During the quarter, Lithos' testing of its AcQUA™ technology carried out in partnership with SQM (SQM:NYSE), or Sociedad Quimica y Minera de Chile, one of the world's largest lithium producers, showed that impurities like magnesium, boric acid, calcium and sulfates were removed from the brine and high-purity lithium was recovered. This process is critical to producing battery-grade lithium.
"This validation from an industry giant, which has tested nearly every direct lithium extraction (DLE) technology available, speaks volumes about our competitive edge," Taylor said in the release.
AcQUA™ is a patent-pending, hybrid, electro-pressure membrane process that increases lithium concentration without the use of fresh water or harmful chemicals. To protect its intellectual property regarding this process, Lithos recently filed a special petition with the U.S. Patent and Trademark Office requesting they speed up issuing the patent, "Electro-Pressure Membrane Method for Recovery and Concentration of Lithium from Aqueous Sources."
Another Innovative Solution
Another development covered in the update is that Lithos recently developed a second innovative and proprietary technology, TiERRA™, garnered contracts with two customers for this solution and is looking to monetize it immediately. The technology affords companies a significant environmental and technological benefit and creates another revenue stream for Lithos.
TiERRA™ is a post-DLE solution to one of the industry's biggest challenges, which is how to responsibly re-inject spent brine without continuously depleting freshwater resources. With this technology there is no need to use fresh water, lessening the environmental impact of lithium extraction and making DLE operations more economically viable.
"TiERRA™ is like a turbocharger for the DLE process, recycling and conditioning spent brine so it can be re-injected at scale, effectively closing the loop in the extraction process," Taylor described.
Currently, Lithos is working with two multinational corporations in the specialty chemicals and mining industries, which have chosen AcQUA™ for pretreatment testing and are considering TiERRA™ for fluid re-injection at scale. Also, the company is in advanced discussions with several large lithium producers and companies in the DLE technology space.
Lithos secured Phase 2 funding through the U.S. Department of Energy's FASTRACK program to further validate AcQUA™ and TiERRA™. Now the company is pursuing a multimillion-dollar Phase 3 commercialization grant it would use to accelerate deployment of its two solutions at its customers' lithium projects.
An Eye To Sustainable Production
Headquartered in Vancouver, British Columbia, Lithos Group aims to "become the global standard in economically efficient, sustainable lithium production," the company said. Its patented-pending AcQUA™ technology spans the whole value chain from the conditioning and pretreatment of raw brines, the primary bottleneck, through the DLE phase to the polishing and purification of battery-grade lithium feedstock. About 70% of global lithium resources are hosted in brine.
Lithos has two fully operational facilities, a 4,000-square-foot laboratory in Denver, Colo., and a 55,000-square-foot complex, permitted to produce pilot-scale lithium hydroxide, in Bessemer, Ala.
Batteries To Drive Sector Growth
The global lithium market is forecasted to more than triple in value by 2033, reaching US$28.45 billion (US$28.45B) from US$9.86B this year, Precedence Research wrote on Sept. 10. This reflects a compound annual growth rate of 12.5% during the forecast period.
Global demand for the critical metal is projected to continue climbing steadily until at least 2035, Statista data show, to 3,829,000 metric tons of lithium carbonate equivalent from 917,000 metric tons in 2023.
Precedence Research attributed the projected growth to increasing demand for lithium batteries in various industries. Marin Katusa of Katusa Research pinpointed electric vehicles (EVs) and battery storage as the primary key drivers. All major electric vehicle batteries require lithium, about 1.55 pounds per kilowatt hour of battery capacity, on average, he noted. Global battery cell manufacturing capacity is expected to hit 7.2 terawatt hours in 2030, more than triple its capacity in 2023.
"I think the data speaks for itself that there's more growth and opportunity on the horizon," Katusa wrote.
Another major catalyst, noted Katusa, "for the U.S.-friendly lithium sector" is the country's policy regarding foreign entities of concern (FEOCs), entities owned or controlled by, or subject to the jurisdiction of, certain countries, which today are China, North Korea, Russia, and Iran. This mandates that EVs will not qualify for the EV tax credit if any of the vehicle's battery components came from an FEOC (as of 2024) or if any of the applicable critical minerals came from an FEOC (starting in 2025).
Despite increasing demand and all stages of new lithium projects coming online, the global lithium market is headed toward a supply deficit, which could happen as soon as 2025, Jacob White with Sprott Asset Management told Stockhead on Aug. 9. Meanwhile, lithium prices may have hit their bottom. This is good news for investors, noted White, not just in lithium miners but also in companies throughout the supply chain.
The Catalysts
The key ongoing catalysts for Lithos are additional contracts for its technologies and further validation of the same from industry leaders, Taylor noted in the release.
"We are moving closer to our goal of becoming a commercial services company that not only extracts lithium but does so in a way that safeguards the environment for future generations," the CEO added.
Snapback Rally Predicted
Technical Analyst Clive Maund has an Immediate Strong Buy on Lithos stock because its charts show it is on the precipice of a snapback rally during which the price jumped initially to the CA$0.45−0.50 range, he wrote in an Aug. 21 report. This reflects a 275−317% upside from the company's current share price, lower now than it was then.
Maund explained that what is happening with the stock is unusual in that the price keeps dropping slowly yet the accumulation line keeps plowing ahead, "creating a positive divergence that promises a reversal into a major bull market." Thus, he recommended investors add to their positions and stay long in Lithos.
Ownership and Share Structure
The company said that about 60% of Lithos is held by insiders and management. According to Reuters, this includes CEO Scott Taylor, who has 14.19%, Independent Director Michael Westlake, who has 0.71%, and Independent Director Kevin McKenna, who has 0.05%.
About 27% of the company is held by strategic entities. The rest is retail.
Lithos has a market cap of CA$20.7 million and about 84.62 million shares outstanding. Its 52-week range is CA$0.98 to CA$0.20.
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