Standard Lithium Ltd. has issued a statement to what it calls a “false and misleading report” from Blue Orca Capital.
Standard Lithium said the report contains numerous important inaccuracies and misunderstandings which Standard Lithium believes are misleading and clearly intended to benefit Blue Orca Capital, which itself has disclosed that it stands to profit in the event that the stock price of Standard Lithium declines.
Standard Lithium cautions investors not to make decisions based on the report and encourages them to consult credible and informed sources, including Standard Lithium’s filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission prior to making investment decisions.
Standard Lithium said that the report misunderstands the scope of the data reported to the Arkansas Oil and Gas Commission (AOGC).
The Demonstration Plant operated by Standard Lithium, under normal conditions, continuously produces lithium chloride solution, which is then mixed back into the waste brine stream and reinjected back into the geological formation via Lanxess’ existing brine disposal system.
These large volumes of lithium chloride that were produced are not included in the data reported to the AOGC. The company said the only data reported to the AOGC, in compliance with the requirements of the AOGC, were those volumes of lithium chloride solution that were temporarily stored on Standard Lithium’s site and these have no correlation with actual lithium recovery rates observed in the plant.
A portion of this lithium chloride was sent off-site for conversion to lithium carbonate on four separate occasions when conversion work was scheduled. The reported data forms only a small portion of the total lithium chloride recovered in the process.
“Blue Orca Capital’s interpretation of lithium recovery rates is incorrect and underestimates lithium extraction efficiencies. Similarly, the report's claims that recovery is reducing over time also misinterprets the AOGC data. Standard Lithium has only stored lithium chloride product on site when required and the periods when it is stored do not correlate with actual lithium recovery rates observed in the plant at the time,” the Standard Lithium statement said.
The company also issued three “points of clarity” about the Blue Orca Capital analysis.
The lithium chloride solution reported under the category “The output of lithium carbonate, lithium chloride, and lithium hydroxide” on the AOGC website only represents that portion of lithium chloride solution which was temporarily stored on site and not the much larger volume that is continuously reinjected back into the brine formation.
The conclusions of the report prepared by Blue Orca Capital are incorrect and based on misinterpretation of the information and excludes the much large volumes of lithium chloride solution that was produced at the Demonstration Plant.
Blue Orca Capital has opportunistically issued this report with partial and incomplete information and without consultation or clarification by the company.
“The report also fundamentally misunderstands the necessity and purpose of the Demonstration Plant,” the Standard Lithium statement said.
“The Demonstration Plant was designed to continuously process an input tail brine flow of 50 gallons per minute (gpm; or 11.4 m3/hr) which is the equivalent of 100–150 tonnes per annum of lithium carbonate. One of the objectives of the Demonstration Plant to date has been to produce sufficient quantities of solid lithium carbonate product off-site, to validate that battery quality materials can be produced. It has never been the intent to store on-site all of the lithium chloride produced and then convert all of that to lithium carbonate product. The principal purpose of the plant is to optimize the process to allow for design and scale-up of a commercial plant in preparation for a feasibility study.”
“The company is confident in its lithium extraction technology and Demonstration Plant and will maintain its focus on executing its strategic plans and progressing towards definitive feasibility and commercialization at the Lanxess facility. The company will not be providing further comment on the report at this time.”