E3 Lithium (TSXV: ETMC; OTC: EEMMF) has been granted a licence for the first brine production well in Alberta. The well will be drilled in the company's Clearwater project area, east of the Town of Olds, for the purpose of evaluating its lithium resource. Drilling is expected to begin before the end of this month, and is targeted for completion by mid-July.
According to E3, an innovator of the direct lithium extraction (DLE) technology, the brine production well will provide critical data such as brine chemistry, lithium concentrations and reservoir characteristics. It plans to use the data collected to support the upgrade of its resource to the indicated and measured category, which will be the basis for a prefeasibility study (PFS).
To date, E3 has outlined a total of 7 million tonnes of lithium carbonate equivalent (LCE) in three resource areas (all inferred), hosted within the Leduc aquifer historically known for its oil and gas development. Together, these resources cover about 34% of the company's permit area in south-central Alberta.
Clearwater represents one of the resource areas, containing 2.2 million tonnes LCE at an average lithium concentration of 74 mg per litre. A preliminary economic assessment was completed for the Clearwater project in 2020, showing an after-tax net present value of US$820 million with a 27% internal rate of return. Production is projected at 20,000 tonnes annually over a 20-year project life.
The purpose of the upcoming drill program is to provide additional data to the aquifer management plan and assist in defining the commercial production network area at Clearwater. "For our company, this represents the next step in our path to commercialization and producing high quality, EV-ready lithium," Chris Doornbos, CEO of E3 Lithium, said.
The company plans on completing and testing a total of three wells at the Clearwater project area.