Co.'s Q3/24 Notable for Tech Innovation, Validation

Source: Streetwise Reports 09/25/2024

These achievements pertain to the company's proprietary methods for sustainable lithium mining. Learn why one analyst rates the stock Immediate Strong Buy.

Lithos Group Ltd. LITSF provided a Q3/24 corporate and operational update highlighting the company's innovation and progress with its proprietary technologies, noted a news release.

"Our achievements this quarter are just the beginning of a transformative period for Lithos" Chief Executive Officer Scott Taylor said in the release. "As demand for lithium continues to grow with the global push towards electric vehicles and renewable energy storage, we are confident that our innovative technologies position us to become a key player in meeting that demand sustainably."

AcQUA™ Technology Validated by Industry Giant

A highlight of the quarter was the successful testing of Lithos' testing of its AcQUA™ technology, conducted in collaboration with Sociedad Quimica y Minera de Chile SQM, one of the world's largest lithium producers. The technology demonstrated its ability to remove impurities like magnesium, boric acid, calcium, and sulfates from the brine, resulting in high-purity, battery-grade lithium.

"This validation from an industry leader that has tested nearly every direct lithium extraction (DLE) technology available solidifies our competitive edge" Taylor said.

The AcQUA™ process is a patent-pending, hybrid, electro-pressure membrane method that enhances lithium concentration without requiring freshwater or harmful chemicals. Lithos has taken steps to protect its intellectual property by petitioning the U.S. Patent and Trademark Office to expedite the issuance of this vital patent.

Introducing TiERRA™ Technology: A Game-Changer for Sustainability

In addition to AcQUA™, Lithos has introduced a second breakthrough technology: TiERRA™, which is designed to address one of the most pressing challenges in the lithium industry — responsible re-injection of spent brine without depleting freshwater resources. TiERRA™ offers a post-DLE solution that allows brine to be re-injected at scale, reducing environmental impact and enhancing the economic viability of lithium extraction.

"TiERRA™ acts like a turbocharger for DLE processes, recycling and conditioning brine to close the loop in lithium extraction" Taylor explained.

Lithos is already working with two multinational corporations in the specialty chemicals and mining sectors that are testing AcQUA™ and considering TiERRA™ for large-scale re-injection projects.

Securing Funding for Commercial Expansion

Lithos secured Phase 2 funding through the U.S. Department of Energy's FASTRACK program to further validate AcQUA™ and TiERRA™.

Now the company is pursuing a multimillion-dollar Phase 3 commercialization grant it would use to accelerate deployment of its two solutions at its customers' lithium projects.

An Eye To Sustainable Production

Headquartered in Vancouver, British Columbia, Lithos Group aims to "become the global standard in economically efficient, sustainable lithium production" the company said. Its patented-pending AcQUA™ technology spans the whole value chain from the conditioning and pretreatment of raw brines, the primary bottleneck, through the DLE phase to the polishing and purification of battery-grade lithium feedstock. About 70% of global lithium resources are hosted in brine.

Lithos has two fully operational facilities, a 4,000-square-foot laboratory in Denver, Colo., and a 55,000-square-foot complex, permitted to produce pilot-scale lithium hydroxide, in Bessemer, Ala.

Batteries To Drive Sector Growth

The global lithium market is forecasted to more than triple in value by 2033, reaching US$28.45 billion (US$28.45B) from US$9.86B this year, Precedence Research wrote on Sept. 10. This reflects a compound annual growth rate of 12.5% during the forecast period.

Global demand for the critical metal is projected to continue climbing steadily until at least 2035, Statista data show, to 3,829,000 metric tons of lithium carbonate equivalent from 917,000 metric tons in 2023.

Technical Analyst Clive Maund explained that what is happening with the stock is unusual in that the price keeps dropping slowly yet the accumulation line keeps plowing ahead, "creating a positive divergence that promises a reversal into a major bull market." Thus, he recommended investors add to their positions and stay long in Lithos.

Precedence Research attributed the projected growth to increasing demand for lithium batteries in various industries. Marin Katusa of Katusa Research pinpointed electric vehicles (EVs) and battery storage as the primary key drivers.

All major electric vehicle batteries require lithium, about 1.55 pounds per kilowatt hour of battery capacity, on average, he noted. Global battery cell manufacturing capacity is expected to hit 7.2 terawatt hours in 2030, more than triple its capacity in 2023.

"I think the data speaks for itself that there's more growth and opportunity on the horizon" Katusa wrote.

Another major catalyst, noted Katusa, "for the U.S.-friendly lithium sector" is the country's policy regarding foreign entities of concern (FEOCs), entities owned or controlled by, or subject to the jurisdiction of, certain countries, which today are China, North Korea, Russia, and Iran. This mandates that EVs will not qualify for the EV tax credit if any of the vehicle's battery components came from an FEOC (as of 2024) or if any of the applicable critical minerals came from an FEOC (starting in 2025).

Despite increasing demand and all stages of new lithium projects coming online, the global lithium market is headed toward a supply deficit, which could happen as soon as 2025, Jacob White with Sprott Asset Management told Stockhead on Aug. 9. Meanwhile, lithium prices may have hit their bottom. This is good news for investors, noted White, not just in lithium miners but also in companies throughout the supply chain.

The Catalysts

The key ongoing catalysts for Lithos are additional contracts for its technologies and further validation of the same from industry leaders, Taylor noted in the release.

"We are moving closer to our goal of becoming a commercial services company that not only extracts lithium but does so in a way that safeguards the environment for future generations" the CEO added.

Snapback Rally Predicted

Technical Analyst Clive Maund has an Immediate Strong Buy on Lithos stock because its charts show it is on the precipice of a snapback rally during which the price jumped initially to the CA$0.45−0.50 range, he wrote in an Aug. 21 report. This reflects a 275−317% upside from the company's share price at the time of the report, lower now than it was then.

Maund explained that what is happening with the stock is unusual in that the price keeps dropping slowly yet the accumulation line keeps plowing ahead, "creating a positive divergence that promises a reversal into a major bull market." Thus, he recommended investors add to their positions and stay long in Lithos.

Ownership and Share Structure

The company said that about 60% of Lithos is held by insiders and management. According to Reuters, this includes CEO Scott Taylor, who has 14.19%, Independent Director Michael Westlake, who has 0.71%, and Independent Director Kevin McKenna, who has 0.05%.

About 27% of the company is held by strategic entities. The rest is retail.

Lithos has a market cap of CA$20.7 million and about 84.62 million shares outstanding. Its 52-week range is CA$0.98 to CA$0.20.

Important Disclosures:

1. Lithos Group Ltd. has a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay 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 Lithos Group Ltd.
3. Doresa Banning wrote 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.