Volt Lithium Corp. (VLTLF) has achieved a critical milestone in its journey towards commercial-scale lithium production, successfully installing its first field unit in the Permian Basin, Texas. This unit, capable of processing over 200,000 liters (1,250 barrels) of oil field brine per day, represents a major scale-up from Volt’s previous capacity of 96,000 liters (600 barrels) per day. This announcement firmly positions Volt as a leading contender in the North American lithium market.
The installation of this field unit is not only a significant boost to Volt’s production capacity but also a key component in its strategy to launch full-scale Direct Lithium Extraction (DLE) operations by the end of September 2024. DLE has emerged as a promising solution to meet the surging global demand for lithium, driven primarily by the rapid growth of the electric vehicle (EV) market and the increasing need for energy storage.
The Inflation Reduction Act (IRA) of 2022 has provided a significant boost to the lithium mining sector, with the Department of Energy (DOE) injecting billions of dollars into supporting new energy projects, including lithium mines. This financial support, combined with the IRA’s incentives for domestic metal and mineral extraction, has made lithium mining more profitable and attractive for investors.
Volt Lithium’s focus on DLE positions the company strategically to capitalize on the growing demand for lithium. Analysts predict that over 40 million EVs will be sold annually by 2030, significantly increasing the demand for lithium production. DLE offers a number of advantages, including faster extraction times, potentially reducing production time from 18-24 months down to just one or two days. This efficiency, combined with the potential to improve lithium recovery rates, makes DLE a transformative technology in the lithium sector.
Volt’s recent installation of its field unit in the Permian Basin marks a major step towards full-scale commercial lithium production. The company is on track to begin lithium chloride production by the end of the third quarter of 2024. This will be the first time Volt produces lithium in the field, following two significant scale-ups in the past two months. The company is targeting production of 100,000 barrels per day by mid-to-late 2025.
Volt’s CEO, Alex Wylie, highlights the company’s competitive advantage in terms of cost. He stated that Volt’s cost to produce battery-grade lithium metal is under US$2,900 a ton, a figure that no other North American company can achieve at this scale. By leveraging existing oil and gas infrastructure for lithium extraction, Volt can minimize capital outlay and achieve significant cost savings.
Furthermore, Volt’s local production strategy positions the company to meet North American demand without the financial burden of tariffs imposed on lithium imports from China. This strategy aligns with the growing demand in the electric vehicle and battery sectors, giving Volt a competitive edge in the market.
Analysts are optimistic about Volt’s prospects. 3L Capital highlighted the installation of the field unit as a key catalyst for Volt’s growth. The report projected that Volt could generate US$16.8M in annual operating cash flow at a lithium concentration of 31 mg/L and a lithium hydroxide price of US$20,000/t. At full production, 3L Capital estimates Volt’s valuation could reach US$178M, suggesting a significant upside potential from its current market capitalization.
Technical analyst Clive Maund also expressed a bullish outlook on Volt Lithium, noting the company’s strong technical position and recent consolidation. He rated Volt an Immediate Buy based on its technical indicators.
Volt Lithium’s strategic location, innovative technology, and cost-effective approach have positioned the company as a strong contender in the booming lithium market. As demand for lithium continues to grow, Volt is well-positioned to capitalize on this trend and become a major player in the global lithium supply chain.
