DLE Co. Announces Strategic Investment To Deploy Extraction Tech

Source: Streetwise Reports 05/03/2024

Volt Lithium Corp. VLTLF aims to become North America's first commercial producer of lithium hydroxide and lithium carbonates from oilfield brine. Read to see what experts are saying about this company's stock.

Volt Lithium Corp. has announced a strategic investment of US$1,500,000 by a company with operations in the Delaware Basin in West Texas, U.S.A., with the purpose of deploying a field unit.

This field unit will produce lithium hydroxide monohydrate using Volt's direct lithium extraction (DLE) technology and will build on work already done by Volt at its permanent Demonstration Plant in Calgary, Alberta.

Its Delaware Basin project is located in one of the largest conventional oil and gas-producing basins in North America. It produces approximately 10.9 million barrels of water every day through the production of oil and gas.

The strategic investment will be completed through a non-brokered, private placement with the investor. Under the private placement, 6,818,182 units of Volt will be issued at a price of US$0.22 per unit for an aggregate consideration of US$1,500,000 and is expected to close on or about May 1, 2024.

Each unit will consist of one common share in the capital of the company and one-half of one common share purchase warrant. Each warrant will be exercisable into one common share at a price of US$0.35 per warrant share.

Of the investment, President and CEO Alex Wylie said: "We are very pleased to be collaborating with this operator to deploy Volt's field unit in the Delaware Basin. Volt has spent the past several months working with this operator to ensure the successful extraction of lithium from this operator's brine at our Demonstration Plant."

Spotlight on Volt

According to its website, Volt Lithium Corp is a "lithium development and technology company aiming to be North America's first commercial producer of lithium hydroxide and lithium carbonates from oilfield brine."

It explains that its strategy is "to generate value for shareholders by leveraging management's hydrocarbon experience and existing infrastructure to extract lithium deposits from existing wells, thereby reducing capital costs, lowering risks, and supporting the world's clean energy transition."

The company's President, CEO, and Director, Alex Wylie, has "a proven track record of founding and building successful high-growth resource-based businesses" while Chief Financial Officer Morgan Tiernan offers "10+ years of tax and financial reporting experience for private and public entities."

Volt Lithium's Board of Directors also has a lot to offer in terms of experience within the sector. Director Warner Uhl has over 30 years of experience as a senior mining professional, "working in executive management with mining, construction, and engineering companies."

As Chair of the Board, Lt. General (ret'd) Honourable Andrew Leslie uses his "extensive U.S./Canada cross border relations experience."

Volt's Board of Directors has over 130 years of experience in total in relevant sectors.

Lithium Is Key for a Greener Future

Lithium is used in the production of lithium-ion batteries. As most plug-in hybrids and all-electric vehicles use these batteries, it's clear that more lithium is needed as more people choose to move to greener vehicles.

CarbonCredits predicts that global demand for lithium will surpass 2.4 million metric tons by 2030, which is double the 2025 forecast. The publication also noted that Goldman Sachs is maintaining "a pessimistic outlook for lithium prices in 2024" and is projecting "further declines compared to current levels." It puts the decline down to an oversupply of lithium this year.

Technical Analyst Clive Maund considers Volt Lithium as an Immediate Strong Buy, writing that "Volt's technology opens the door to a symbiotic relationship with any number of oil companies who can partner with it to produce lithium in a manner that is profitable for both parties."

Stockhead recently reported on a supposed upcoming explosion of demand for electric vehicles (EVs) in China "if the Chairman of Chinese EV-making titan BYD is to be believed." Stockhead also went on to note that "both futures and spot lithium pricings have staged a slight recovery after a bit of a recent dip" but maintained that "it's all looking a tad unpredictable at the moment."

As for Volt Lithium's part in a greener future, it notes that lithium extraction from oilfield brines is an emerging, high-growth industry. To its knowledge, the company is the "only lithium extraction company targeting [the] sector that has successfully extracted lithium from oilfield brines." After completing a pilot program, it announced up to 90% extraction capabilities using the company's technologies.

Companies like EXXON XOM and Chevron CVX have also both recently announced that the extraction of lithium from oilfield brines will "become a future core competency once technology is commercialized."

As Volt Lithium points out, extracting from oilfield brines will have a "first mover advantage in North America, as infrastructure is in place, fields are permitted, and lithium is produced today from the brines; it's just not currently being extracted."

Volt's Recent Progress

The company closed a round of financing towards the end of last year and hoped to "significantly advance the business" with a number of key deliverables, including a published PEA, improvements to key technologies, and the completion of a permanent pilot.

In February 2024, the company announced it had been able to cut operating costs by 64% on its Rainbow Lake property.

What The Experts Are Saying

The experts agree that the future looks exciting for Volt. Michael Ballanger of GGM Advisory Inc. explained in a January newsletter that he changed Volt Lithium's rating to a Buy because of a research report from Wood Mackenzie, reposted in The Wall Street Journal, which mentioned "forecasting a glut of lithium . . . to continue for several years."

Ballanger also noted that "lithium darlings that were market darlings a year ago, such as E3 Lithium Ltd. and Patriot Battery Metals Inc. are now in full "crash" mode."

Technical Analyst Clive Maund also considers Volt Lithium as an Immediate Strong Buy, writing in a February article that "Volt's technology opens the door to a symbiotic relationship with any number of oil companies who can partner with it to produce lithium in a manner that is profitable for both parties." He also mentions the recent signing of a cooperation agreement with Alberta-based oil and gas producer Cabot Energy.

Maund wrote that while "oilfield lithium brine is often at low concentrations . . . Volt has developed the technology to profitably extract it."

Ownership and Share Structure

Refinitiv provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 15.54% of the company. According to Refinitiv, James Alexander Wylie owns 8.73% of the company with 11.38 million shares, Martin Scase owns 4.94% of the company with 6.44 million shares, Warner Uhl owns 0.88% of the company with 1.15 million shares, Maury Dumba owns 0.49% of the company with 0.64 million shares, Morgan Tiernan owns 0.39% of the company with 0.50 million shares, and Kyle Robert Hookey owns 0.11% of the company with 0.14 million shares.

Refinitiv reports that institutions own 1.84% of the company, as Eagle Claw Investments Pty. Ltd. owns 1.07% of the company with 1.40 million shares, and U.S. Global Investors, Inc., owns 0.77% of the company with 1.00 million shares.

According to Market Watch, the company has 137.1 million shares outstanding and a market cap of CA$37.79 million. It trades in the 52-week range between CA$0.29 and CA$0.30.

Important Disclosures:

1. Volt Lithium Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Volt Lithium Corp.
3. Lauren Rickardwrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

Contributing Author Disclosures

1. Author Certification and Compensation: [Clive Maund of clivemaund.com] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing this article. Maund received his UK Technical Analysts' Diploma in 1989. The recommendations and opinions expressed in this content accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed.

Clivemaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.