Arizona Lithium eyes early cashflow after wrapping up flow testing at another Prairie pad

Arizona Lithium has completed flow testing of well #3 at Pad #1 of its Prairie lithium project in Canada.

The company aims to bring one pad online at a time in an attempt to generate early cashflow. Pic: Getty Images

• Arizona Lithium wraps up lithium brine flow testing at Prairie Pad #1

• Pad #1 is one of three initial locations detailed in the Prairie PFS

• Drilling wells on each pad is key on the path to production

Special Report: Arizona Lithium has completed flow testing of well #3 at Pad #1 of its Prairie lithium project in Canada, in the mining friendly Williston Basin region.

The company plans to pursue a sustainable approach to a 6000tpa lithium carbonate equivalent development.

It will boast strong environmental credentials, aiming to use less fresh water, land and produce less waste.

This work was focused on additional testing of the recently discovered Dawson Bay and Souris River Lithium Formations, with grade and flow rates expected to be released to market next month.

Arizona Lithium (ASX:AZL) is planning to produce its first lithium products as soon as next year.

Testing wells ahead of development

The company is taking a derisked approach to developing the project in a tough lithium market, bringing one pad online at a time in an attempt to generate early cashflow.

The plan is to convert this well into a future production well at Pad #1, with each pad estimated at a net present value of ~US$150m.

Arizona has recently announced the completion of drilling on Pad #2 and the clearing of the well pad at Pad #3 – following a similar pattern to clear, drill, complete and test wells ahead of commercial development.

“The completions at Pad #1 highlight our ability to drill wells and complete them across our project,” managing director Paul Lloyd said.

“The team has been focused and efficient at getting the work permitted, getting the pads cleared, drilling wells and completing wells. All of this has been done expeditiously and are all important steps ahead of production of lithium products in 2025.”

Notably, the company is well funded to focus on well development, with cash already received from the recent non-core acreage sale that raised A$11 million in non-dilutive capital.

Prairie will also be the beneficiary of up to $21.6m of royalty credits under a scheme from the Saskatchewan Government to encourage the commercialisation of by-products and waste products from oil and gas resources.

This article was developed in collaboration with Arizona Lithium, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.