Arizona Lithium all-in on Saskatchewan Prairie Lithium project as it sells its Arizona project

BY BRIAN ZINCHUK

PERTH, AUSTRALIA – Arizona Lithium is selling its namesake property to go all-in on its Prairie Lithium project at Torquay, Saskatchewan.

If that sounds a little complicated, it’s because it is. Arizona Lithium is a Perth, Australia-based lithium developer. (Australia is a major lithium producer). Their initial project was the “Big Sandy Lithium Project,” in Arizona, hence the company name. It is in that state the company has been working to develop a sedimentary lithium mine. In December, 2022, the company purchased Emerald Park, Saskatchewan-based Prairie Lithium Corporation, who drilled the first targeted lithium well in Canada in the fall of 2021. That deal was for total consideration of approximately C$70.6 million, consisting of C$40.0 million in cash and 500.0 million common shares of AZL at a deemed price of C$0.0612 per share based on the 10-day VWAP of AZL’s shares.

The Prairie Lithium project is based on using a process known as “Direct Lithium Extraction” (DLE) to produce concentrated lithium from sedimentary brines. The concept relies on existing oil and gas technology and services for all of its subsurface and most of its surface facilities. The key distinctions are the DLE process, and the final product – saleable lithium vs crude oil, and dramatically less environmental impact with minimal surface disturbance compared to a sedimentary mine.

In addition to the Big Sandy mine project, Arizona Lithium had also built its “Lithium Research Centre” at Tempe, Arizona. It, too is part of the deal.

Arizona Lithium has continued to advance its Saskatchewan project, drilling six wells on three pads near Torquay, Saskatchewan, in 2024. The company had previously said it is on a path to small-scale commercialization in the short term, if the funds could be raised to support it. But development at Big Sandy has been slow, to say the least, prompting the company to make the announcement on July 8 that it would be going all-in on the Prairie Lithium project.

“Arizona Lithium Limited (ASX: AZL, AZLO, OTC: AZLAF), a company focused on the sustainable development of the Prairie Lithium Project is pleased to announce that is has entered into agreements where on completion it will raise cash proceeds of US$5 million (approximately A$8 million) by selling the Big Sandy Lithium Project and the Lithium Research Center,” said the company’s press release.

It continued, “The strategic sale and non-dilutive fundraising effort, combined with a recently announced Share Purchase Plan that was oversubscribed and raised approximately A$4.25 million, will help to fund the development of the Prairie Lithium Project, that now becomes Arizona Lithium’s 100 per cent core focus.

“While the Big Sandy Project remains a competitive lithium sedimentary project by resource metrics, the development hurdles encountered over the past five years are in stark contrast to the expedited permitting and production opportunities of the Prairie Lithium Project in Saskatchewan, Canada. The company believes that the lithium sedimentary resource at Big Sandy should continue to be developed for the economic benefit of the region and the betterment of battery material supply chains in the United States. Given the regulatory environment, the development of the project may take an unforeseen amount of time, and therefore, the company believes the team at Arizona Lithium can continue to focus its efforts and capital in the near-term producing asset on the Prairie Lithium Project. On 19 May 2025, Arizona Lithium announced it had received approval for Phase 1 production at the Prairie Lithium Project from the Ministry of Energy and Resources in Saskatchewan. The company looks forward to more positive news on the Prairie Lithium Project in the coming months.”

Arizona Lithium had previously said it had hoped to begin small-scale commercial production of lithium as early as late 2025, but depressed lithium prices since then have been a factor in that development. With slim prospects of seeing revenue coming from Big Sandy any time soon, the decision was made to focus on the most expedient path to revenue generation.

Arizona Lithium Managing Director Paul Lloyd said in the release, “This agreement is transformational for Arizona Lithium and the decision was not taken lightly by myself and the Board of Directors. As a company we had two world class assets – the Prairie Lithium Project and the Big Sandy Lithium Project. A company of our size is best placed focusing on and funding one key asset and the choice for us was a hard one but an obvious one given the Prairie Lithium Project is deep into its development and years closer to first production. We look forward to creating shareholder value and wealth as a fully focused lithium development company.”

As for the sale, AZL and Big Sandy Inc, are the seller parties and Big Sandy Lithium, LLC and Advanced Lithium Research Center, LLC (indirect subsidiaries of Navajo Transitional Energy Company, LLC) as the buyer parties, for the consideration of USD$5 million.

The Mining Services Agreement entered into between the Arizona Lithium and NTEC on 8 March 2024 will terminate on closing and the remaining AZL shares subject to escrow will be released as full and final reimbursement for expenditures incurred by NTEC towards unsatisfied milestones which exceed the value of the shares released from escrow, according to the release.

“NTEC will remain AZL’s largest shareholder and will benefit from the fast tracking of the Prairie Lithium Project,” the release said.

“AZL retains its main undertaking, being the Prairie Lithium Project, therefore the sale of Big Sandy is not required to be subject to shareholder approval,” the release added.

Prairie Lithium Corp. was founded and helmed by Zach Maurer, originally from Weyburn. He remains involved as executive director of Arizona Lithium, and has been heading up efforts in Saskatchewan. Maurer accompanied Premier Scott Moe in a recent trade mission to Washington this past spring which included a focus on critical minerals.

Upon closing of the deal, which is expected imminently, Arizona Lithium will no longer be operating in its namesake state. However, no mention was made of renaming the company, and doing so with a publicly listed company can be costly and time consuming. So as it stands now, the Australian company named for an American State will focus 100 per cent on its Saskatchewan project.