Grounded Lithium Announces June Oil Sales and Secures Loans to Fund Oil & Gas Facility Improvements
Rhea-AI Summary
Grounded Lithium (OTC: GRDAF, TSXV: GRD) reported that its partnership’s June oil sales averaged 123 bbl/day, in line with prior volumes, supporting its view of low-decline production with improving netbacks. The company agreed to an unsecured C$106,000 Facility Loan from an arm’s‑length third party, bearing 12% annual interest and repayable in equal instalments over 18 months, to help fund oil and gas facility upgrades.
Total facility upgrade costs are estimated at C$263,000. Part of the balance will be funded by Analogy Capital Advisors’ 40% working interest and a non‑interest‑bearing ~C$86,000 Vendor Loan, repayable by all partners according to their working interests: Analogy Capital 40%, GLC 30%, and the unrelated third party 30%. Following completion, expected in early August 2026, GLC expects to enter processing fee agreements with all partners and potentially third parties, with processing fees first applied to debt repayment and anticipated improvement in operating netbacks.
According to Grounded Lithium, it controls approximately 1.0 million tonnes of Measured & Indicated and 3.2 million tonnes of Inferred lithium carbonate equivalent resources in southwest Saskatchewan. Its updated PEA for the Kindersley Lithium Project Phase 1 shows an after‑tax NPV8 of US$1.0 billion and IRR of 48.5%, and a 2024 agreement grants Denison an option to earn up to a 75% working interest in the project by funding up to $15.15 million.
Positive
- June oil sales averaged 123 bbl/day, consistent with prior reported volumes
- C$106,000 Facility Loan secured to fund oil and gas facility upgrades
- Non‑interest‑bearing ~C$86,000 Vendor Loan reduces financing cost for upgrades
- Processing fee agreements expected after upgrades, with potential third‑party fee income
- Phase 1 PEA NPV8 after‑tax US$1.0 billion with 48.5% IRR
- Denison earn‑in option up to $15.15 million to fund Kindersley Lithium Project
Negative
- Facility Loan interest rate of 12% per annum increases financing cost
- Total facility upgrade cost of C$263,000 requires multiple debt and partner funding sources
AI-generated analysis. How Rhea-AI works. Not financial advice.
The Company also announces that it has entered into an agreement with an arms-length third party to provide loan proceeds of
- Analogy Capital –
40% - GLC –
30% - Unrelated Third Party –
30%
Following completion of the facility upgrades to improve operating cost efficiencies and increase throughput capacity, GLC, as operator, expects to enter into separate processing fee agreements with all working interest partners, with the potential for fees on third party volumes. The facility upgrades are expected to enhance operating netbacks for all partners with processing fee income allocated first to debt repayments. The Company expects that with greater operating efficiencies and lower costs, our payout timelines will accelerate, after which, the Company's share of net operating income will increase significantly. We expect these facility upgrades to be completed in early August 2026.
About Grounded Lithium Corp.
GLC is a publicly traded lithium brine exploration and development company that owns approximately 1.0 million metric tonnes of Measured & Indicated lithium carbonate equivalent mineral resource and approximately 3.2 million metric tonnes of Inferred lithium carbonate equivalent resource over our focused land holdings in Southwest Saskatchewan as per the Company's updated PEA. The updated PEA, titled "NI 43-101 Technical Report: Preliminary Economic Assessment Kindersley Lithium Project – Phase 1 Update" dated November 7, 2023 and effective as of June 30, 2023, reports a Phase 1 NPV8 after-tax of US
GLC's multi-faceted business model involves the consolidation, delineation, exploitation and ultimately development of our opportunity base to fulfill our vision to build a best-in-class, environmentally responsible, Canadian lithium producer supporting the global energy transition shift. U.S. investors can find current financial disclosure and Real-Time Level 2 quotes for the Company on https://www.otcmarkets.com/.
Qualified Person
Scientific and technical information contained in this press release has been prepared under the supervision of Doug Ashton, P.Eng., Alexey Romanov, P. Geo., Meghan Klein, P. Eng., Dean Quirk, P.Eng., Jeffrey Weiss, P.Eng., Chad Hitchings., P.L. Eng., and Michael Munteanu, P.Eng., each of whom is a qualified person within the meaning of NI 43-101.
Forward-Looking Statements
This press release may contain forward-looking statements and forward-looking information within the meaning of applicable Canadian securities laws. The opinions, forecasts, projections and statements about future events of results, are forward looking information, forward-looking statements or financial outlooks (collectively, "forward-looking statements") under the meaning of applicable Canadian securities laws. These statements are made as of the date of this press release and the fact that this press release remains available does not constitute a representation by GLC that the Company believes these forward-looking statements continue to be true as of any subsequent date. Such statements include, but are not limited to, statements pertaining to the anticipated use of proceeds of the Facility Loan, the anticipated cost and timing of completion of the facility upgrades, the expected application and repayment of the Facility Loan and Vendor Loan, the Company's expectation that it will enter into processing fee agreements with the working interest partners and various third parties, the expected amount and duration of any processing fees, the anticipated impact of the facility upgrades on operating netbacks, oil production, net operating income and related economics, the potential for additional oil and gas drilling, the ability of the KLP to become a commercial project, and GLC's vision of becoming a best-in-class, environmentally responsible Canadian lithium producer supporting the global energy transition.
Forward-looking statements are based on a number of assumptions, including assumptions regarding the availability and timing of loan proceeds, the estimated cost and timing of completion of facility upgrades, the ability of GLC and the working interest partners to enter into processing fee arrangements on acceptable terms, the continued production, transportation and sale of oil from the applicable assets, commodity prices, operating costs, processing costs, realized netbacks, the availability of equipment, services and personnel, continued access to infrastructure, the absence of material adverse technical, operational, regulatory or weather-related events, and the continued validity of the Company's current development plans and expectations. Although GLC believes that the assumptions underlying, and expectations reflected in, these forward-looking statements are reasonable, it can give no assurance that these assumptions and expectations will prove to be correct.
Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such statements, including risks relating to the availability and use of loan proceeds, cost overruns, delays in completing facility upgrades, failure to enter into processing fee agreements on expected terms or at all, failure of the facility upgrades to achieve expected improvements in operating netbacks, production or net operating income, reductions in oil prices or realized netbacks, operating interruptions:, unexpected problems can arise due to technical difficulties and operational difficulties which impact the production, transport or sale of our products; geographic and weather conditions can impact the production; the risk that current global economic and credit conditions may impact commodity prices and consumption more than GLC currently predicts; the failure to obtain financing on reasonable terms; the risk that unexpected delays and difficulties in developing currently owned properties may occur; the failure of drilling to result in commercial projects; unexpected delays due to the limited availability of drilling equipment and personnel; and the other risk factors detailed from time to time in GLC's periodic reports. GLC's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof, and the Company does not undertake any obligation to update or revise any forward-looking statements, except as required by applicable securities laws.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
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SOURCE Grounded Lithium Corp.