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Grounded Lithium Files Preliminary Economic Assessment Report for the Kindersley Lithium Project - Phase 1

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Grounded Lithium Corp. (GLC) is pleased to announce the filing of a preliminary economic assessment for the Kindersley Lithium Project, showing a US$1.0 billion after-tax net present value and a 48.5% after-tax internal rate of return. The assessment is based on an annual production of 11,000 tonnes of battery-grade lithium hydroxide monohydrate, using Koch Technologies Solutions' proprietary lithium extraction technology called Li-ProTM.
Positive
  • After-tax net present value of US$1.0 billion with a 4X profitability index
  • After-tax internal rate of return of 48.5%
  • Economic resiliency under a range of key project variables
  • Payout of only 3.7 years, inclusive of a 1.5 year design and construction phase
Negative
  • Inferred mineral resources considered too geologically speculative to have economic considerations applied to them
  • No certainty the results of the Kindersley Lithium Project outlined by the PEA will be realized

CALGARY, AB, Aug. 10, 2023 /PRNewswire/ - (TSXV: GRD) (OTCQB: GRDAF) - Grounded Lithium Corp. ("GLC" or the "Company") is pleased to announce the filing of our preliminary economic assessment titled "NI 43-101 Technical Report: Preliminary Economic Assessment Kindersley Lithium Project – Phase 1 " dated August 9, 2023 and effective as of June 30, 2023 (the "PEA"), further to our news release dated July 26, 2023. The PEA addresses only the first phase of 11,000 tonnes per year of battery-grade lithium hydroxide monohydrate ("LHM") production from the Kindersley Lithium Project ("KLP"). The PEA is available on www.sedarplus.com and on the Company's website at www.groundedlithium.com.  A new corporate presentation detailing the PEA results is also available on our website.

The PEA independently assessed the economics of the KLP-Phase 1 based on a US$25,000 realized sales price per tonne of LHM, the results of which include:

  • After-tax net present value ("NPV") of US$1.0 billion using an 8% discount rate and a capital investment of US$335 million, implying an after-tax profitability index ("PI") of nearly 4X. A PI of nearly 4X suggests a highly accretive project with torque to the upside if current spot prices for battery grade lithium material were modeled;
  • After-tax internal rate of return ("IRR") of 48.5%;
  • Economic resiliency under a range of key project variables such as price, capital intensity and operating costs.  For example, 20% variation in price from US$25,000/tonne LHM to either US$20,000/tonne or US$30,000/tonne of LHM generates after-tax IRRs of 38% and 59%, respectively; and 
  • Payout of only 3.7 years, inclusive of a 1.5 year design and construction phase.  This is extremely rapid given a project of this magnitude and scope.

The PEA is based on the implementation of Koch Technologies Solutions' ("KTS") proprietary lithium extraction technology called Li-ProTM. The Company is working with officials from KTS as well as others within the larger Koch Industries group to develop a field pilot plan with associated commercial terms. The Company will communicate efforts in this regard as they become finalized.  

The PEA presents data provided by several leading experts in their respective fields, namely Sproule Associates Limited, Grey Owl Engineering, Codeco - Vanoco Engineering Inc., Tundra Engineering Inc. and Fracture Modeling Inc. 

Project Summary

The economic analysis of the PEA is based on the following main assumptions:

  • realized sales price of USD $25,000 per tonne of LHM;
  • annual production of 11,000 tonnes per year of LHM;
  • commerciality of KTS' Li-Pro™ lithium extraction technology;
  • minimal pre-filtering expenditures due to the absence of hydrocarbons and H2S;
  • large diameter wellbores to mitigate pressure loss due to friction and permit installation of large volume electrical submersible pumps; and
  • estimated operating and capital costs for the project based on the most current industry data available inclusive of recent strong inflationary pressures on facilities and labour.

The PEA is a preliminary cost estimate and includes inferred mineral resources that are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves under National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"). There is no certainty the results of the KLP outlined by the PEA will be realized.

About Grounded Lithium Corp.

GLC is a publicly traded lithium brine exploration and development company that controls approximately 4.2 million metric tons of lithium carbonate equivalent of inferred resource over our focused land holdings in Southwest Saskatchewan as of the effective date of the PEA. The PEA reports a Phase 1 NPV8 after-tax of US$1.0 billion with an after-tax IRR of 48.5%. 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 Persons and Technical Report

Scientific and technical information contained in this press release has been prepared under the supervision of Doug Ashton, P.Eng., Suryanarayana Karri, P. Geoph., 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. 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. Such statements include, but are not limited to, statements regarding the NPV and IRR of the first phase of production at the KLP, the expected realized sales price of LHM, the capital investment required for the first phase of production at the KLP, the amount of annual production at the KLP, the use of KTS' Li-ProTM lithium extraction technology, the development of a field pilot plan and announcement of same, the payout timing for the first phase of production at the KLP, and GLC's vision of becoming a best-in-class, environmentally responsible, Canadian lithium producer supporting the global energy transition.

Among the important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those indicated by such forward-looking statements are: those assumptions listed under "Project Summary" above, GLC's expectation that our operations will be in Western Canada, 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.

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

FAQ

What are the key findings of Grounded Lithium Corp.'s preliminary economic assessment for the Kindersley Lithium Project? (GLC)

The assessment shows an after-tax net present value of US$1.0 billion, a 48.5% after-tax internal rate of return, and a payout of only 3.7 years, with an annual production of 11,000 tonnes of battery-grade lithium hydroxide monohydrate.

What technology is Grounded Lithium Corp. using for lithium extraction in the Kindersley Lithium Project? (GLC)

The company is using Koch Technologies Solutions' proprietary lithium extraction technology called Li-ProTM.

What are the main assumptions of the economic analysis in the preliminary economic assessment for the Kindersley Lithium Project? (GLC)

The analysis is based on a realized sales price of USD $25,000 per tonne of LHM, annual production of 11,000 tonnes of LHM, and commerciality of KTS' Li-Pro™ lithium extraction technology.

Are there any uncertainties or potential risks associated with the results of the preliminary economic assessment for the Kindersley Lithium Project? (GLC)

Yes, the assessment includes inferred mineral resources that are considered too geologically speculative to have economic considerations applied to them, and there is no certainty the results outlined by the PEA will be realized.

Grounded Lithium Corp.

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