Future funding for Arizona Lithium’s Prairie lithium brine project in Canada just got a major boost
Its Pad #1 site has been conditionally approved for up to $21.6m worth of investment incentive credits
The Saskatchewan government is behind the incentives scheme and appears to be backing the project in as a major lithium discovery
Special Report: Arizona Lithium has just been conditionally approved for a major Saskatchewan government capital investment incentive of up to $21.6m for its Prairie lithium brine project in Canada.
Arizona Lithium’s (ASX:AZL) Prairie lithium brine project – in the Williston Basin in Canada’s Saskatchewan province – is back in the news today with a major, provincial government-backed capital investment incentive, which will see eligible exploration expenses returned as credits on crown royalties once the development is in production.
This adds further positivity on top of strong recent exploration and drilling updates.
Specifically, the project’s Pad #1 site has been conditionally approved for an investment incentive of up to $21.6m under the Saskatchewan Government’s Oil & Gas Processing Investment Incentive Program (OGPII). More on that in a moment.
Prairie is one of Arizona Lithium’s (ASX:AZL) North American lithium development projects, the other being the Big Sandy project in Arizona.
Recently, Arizona commenced well-drilling and “completion activities” at Pad #1, where Well #1 was drilled into the Souris River Formation being converted into a Duperow Formation production well.
The Souris River Formation – where the 86 mg/L sample was found – directly underlies the Duperow Formation across the entire 391,000 acres of the project area.
The company expects a world-class lithium resource to grow from this discovery, and today’s announced investment incentive only further boosts the economic case for its development.
The investment incentive scheme
The conditionally approved incentive scheme details up to $21.6 million in transferable royalty credits under the OPGII Program, which highlights the province of Saskatchewan’s long-term commitment to bringing new lithium resources into production.
According to details published by AZL this morning, credits can be claimed at a rate of 20% in the first calendar year of operations, 30% in the second calendar year, and 50% in the third calendar year against government royalties.
The company notes that the OGPII incentives will form a crucial part of Prairie’s future funding and development.
OGPII credits are earned on eligible expenditures and can only be claimed once the project becomes commercially operational.
Big opportunity in ‘top-ranked jurisdiction’
Arizona Lithium MD Paul Lloyd provided further context, noting: “Saskatchewan is a top-ranked jurisdiction and is committed to responsible economic development of its resources.
“This conditional approval under the OGPII Program is a testament to how the province works with industry to find solutions to economic growth, and we are grateful to work with the governing bodies and operate our project there.
“This is one of the many development funding tools we have access to, which is a non-dilutive benefit to shareholders.”
AZL’s Prairie Lithium holds a resource of 6.3Mt of LCE, comprised of 4.5Mt LCE Indicated and 1.8Mt LCE Inferred.
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.
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