Smackover Lithium Announces Positive PEA for Franklin Project

Smackover Lithium, a partnership between Standard Lithium Ltd. and Equinor, has announced the positive results of a Preliminary Economic Assessment (PEA) for its Franklin project in East Texas. The PEA highlights a robust economic model for the project, with an unlevered after-tax net present value (NPV) of $5 billion and an internal rate of return (IRR) of 24%. The project is expected to produce up to 70,000 tonnes per year of battery-quality lithium carbonate, with an average annual cash operating cost of $4,226 per tonne and an all-in cost of $5,054 per tonne.

The Franklin project, Smackover Lithium’s first defined project in East Texas, is expected to begin initial production in the early 2030s. The project area covers 44,541 hectares (110,064 acres) and has a significant brine resource, with an upgraded and upsized Mineral Resource that includes 1.77 million tonnes of lithium carbonate equivalent (LCE) at an average lithium concentration of 515 mg/L. Additionally, the project has potential value from bromine and potash, with estimated bromide resources of 2.66 million tonnes and potash resources of 15.06 million tonnes.

The PEA leverages the Definitive Feasibility Study (DFS) for the South West Arkansas Project (SWA Project), which informed a 18-month detailed front-end engineering design process. This similarity in brine quality allows for the application of key elements of the SWA Project process flowsheet and costing, accelerating the PEA process for the Franklin Project. The initial capital cost estimate for the wellfield operation and lithium processing facility is $3.5 billion, including a 20% contingency.

Dr. Andy Robinson, President and COO of Standard Lithium, commented, "The Franklin PEA demonstrates the strength of arguably one of the largest and highest-quality lithium brine resources in North America, supporting an attractive standalone lithium operation with additional potential value from bromine and potash. Continued Project definition through our resource development, processing expertise, and mineral leasing activities has resulted in a meaningful increase and upgrade to the Mineral Resource while highlighting very attractive and robust Project economics."

Allison Kennedy Thurmond, VP for US Lithium at Equinor, added, "Advancing the PEA for the Franklin Project is an important step in unlocking the broader lithium potential for our partnership across the region. We are proud of the team’s disciplined execution and hard work to realize the Project area’s potential. These results strengthen our confidence in the opportunity and position us well to progress the next phase of technical work."

The project area is located in east Hopkins, Franklin, and west Titus counties, with the center approximately 4.5 km south of Mount Vernon. The main access to the project site is via Interstate Highway 30, connecting Texas to Arkansas. The project area is also accessible by state highways and the nationwide rail network.

The partnership aims to develop a greenfield lithium extraction and chemicals production facility in the East Texas region. The PEA contemplates annual production capacity of up to 70,000 tonnes of battery-quality lithium carbonate and 1.29 million tonnes of total lithium carbonate production over a 20-year modelled operating life. The project's economics are based on the annual production schedule as set forth in the PEA.

The mineral leasing for the Franklin Project has been ongoing since 2022, covering 44,541 hectares (110,064 acres) with 30,994 gross brine mineral hectares (76,588 gross brine mineral acres) leased by Smackover Lithium. The brine mineral leasing has supported the upgrade of the Mineral Resource, with a total of 1.77 million tonnes LCE at an average lithium concentration of 515 mg/L for 0.59 km³ of brine volume and an additional 2.66 million tonnes of bromide resources.

The partnership is committed to obtaining the necessary permits and managing environmental considerations, including waste management and water management. The Project area has a long history of hydrocarbon development, and the emerging lithium and critical mineral development represents a potential new opportunity for the region.

In summary, the PEA for the Franklin project marks a significant step in the development of a large-scale critical minerals project in East Texas, leveraging established methodologies and a robust resource base to support a strong economic model and potential additional value from bromine and potash.