Grounded Lithium Corp. (TSX-V: GRD) (OTCQB: GRDAF) is pleased to announce the results of our preliminary economic assessment on the first phase 11,000 tonnes per year of battery-grade lithium hydroxide monohydrate production from the Kindersley Lithium Project. We anticipate development of additional phases at the KLP motivated largely by the compelling commercial merits of the economics of the PEA.

Phase 1 KLP Highlights: 

• Generates an after-tax internal rate of return of 48.5% using a realized sales price of USD $25,000/tonne of LHM (flat for the duration of the model) and an after-tax USD $1.0 billion net present value at an 8% discount rate, on a capital investment of USD $335 million;
• Payout of initial capital costs is only 3.7 years inclusive of lead time design and construction of 1.5 years. We anticipate future KLP phases will be materially financed via internally generated cash flow;
• Initial capital estimate of USD $335 million (including USD $45 million for contingencies) delivers a capital intensity of USD $30,500/tonne of LHM for our initial 11,000 tonnes per year project, one of the lower capital intensities of North American lithium from brine projects;
• All-in operating costs are anticipated to be USD $3,899 per tonne of LHM, or USD $42.9 million annually;
• Only 24 of our current 300 sections of lithium rights will be developed in Phase 1 of the KLP. The balance of the sections will support the development of subsequent phases of the KLP; and
• Phase 1 infrastructure investment is expected to underpin capital and operating cost efficiencies for all future phases.

“Grounded is pleased to have achieved another significant milestone in less than three years from incorporation,” commented Gregg Smith, President and CEO. “The independent economic results of Phase 1 of the KLP compare favourably within the lithium mining industry from a CAPEX and OPEX perspective and we believe the results of the PEA bode well for critical future steps, including securing strategic partnerships, off-take agreements, and capital formulation for a commercial project. We now focus our corporate attention on the completion of a field pilot with Koch Technologies Solutions’ extraction process, while at the same time undertaking certain field activities to provide higher certainty on our resources leading to a pre-feasibility study.”

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 prefiltering 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 based on the expected first phase of production at the KLP which is derived from the mineral resource estimate for the KLP set out in Company’s NI 43-101 technical report titled, “NI 43-101 Technical Report: Resource Assessment of the Kindersley Lithium Project in Saskatchewan, Canada for Grounded Lithium Corp. (As of March 15, 2023)” which is available on SEDAR at www.sedarplus.com.

All values reported are in USD unless otherwise noted. The Company will file the PEA on SEDAR (www.sedarplus.com) within 45 days of this press release. 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.

Table 1 – Summary Economics

Capital Costs

Table 2 – KLP Capital Cost Summary

Given the operating conditions, the capital intensity for the KLP is forecasted to be materially lower than some of the other operations in the industry. Capital efficiency is vitally important in projects of this size and the leverage that accrues to project stakeholders due to industry leading capital efficiency ratios directly impact rates of return. These capital estimates will be further refined as the Company moves toward the pre-feasibility and bankable feasibility milestones. These estimates represent a Class 5 engineering cost estimate. We do expect modifications to these estimates with the completion of more precise and detailed engineering.

Operating Costs

Table 3 – KLP Operating Cost Summary

Total operating costs of USD $42.9 million per year, or USD $3,899 per tonne of LHM, are broken out by each major project step and are inclusive of direct and indirect costs. The majority of the operating costs are associated with reagents required within the system and power consumption. For purposes of the PEA, we assumed that sufficient power can be secured from the existing grid structure. However, as we advance the KLP towards commercialization, there is the potential to construct owner secured power options such as a cogeneration unit. This would represent an additional capital charge offset by the benefit of stable, predictable, cost-efficient power supply. Excess power generated from such a unit could be sold into the existing power market to partially offset the operating costs.

Sensitivity Analysis

Table 4 – Economic Sensitivity Summary (USD)

A table similar to Table 4 expressed in Canadian dollars can be found on the Company’s website. A detailed future pricing study for lithium chemicals was not completed for the PEA. The average price used for future sales of battery-quality LHM was developed by reviewing pricing data generated from reliable sources as reported in publicly disclosed data collected from peer companies.

The future average selling price of USD $25,000/tonne for LHM is consistent with that used in publicly released economic assessments of other lithium projects in recent history. Current spot pricing for battery-grade lithium products average greater than USD $40,000/tonne, therefore the potential upside leverage to KLP economics is noteworthy.

Sensitivities demonstrate that the KLP is expected to provide torque to the upside upon any potential future increase in underlying commodity prices. With the demand for critical minerals expected to exceed world supply, the low-cost structure of the KLP is expected to provide elastic returns to the upside. The low-cost structure of the KLP was a key determinant in the Company focusing on the KLP area, since during downturns in commodity cycles, low-cost operations provide projects with improved price resilience.

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 Technical Report. The Company’s PEA reports a Phase 1 NPV₈ after-tax of US$1.0 billion with an after-tax internal rate of return 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. and 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.

Certain data verification, exploration information and other disclosure regarding the mineral resources data contained in this press release is included in the Technical Report.

Market Support Agreement

The Company has transitioned its market making services to Red Cloud Securities Inc. Red Cloud will provide these services for trading on the TSX Venture Exchange in accordance with the TSXV policies, for the purpose of maintaining an orderly market. The Company will engage Red Cloud on a month-to-month basis for a fee of $5,000 cash per month. Red Cloud and GLC are unrelated and unaffiliated entities. Red Cloud will not receive shares or options as consideration. Red Cloud or affiliate(s) of Red Cloud currently hold 145,834 common shares and 2,326,137 broker warrants of GLC received in consideration for services previously performed for GLC. The capital used for market making will be provided by Red Cloud.