E3 Lithium (TSXV: ETL) (OTC: EEMMF) announced on Monday it has received a $27 million investment from the Government of Canada's Innovation, Science and Economic Development's Strategic Innovation Fund (SIF). The fund's objective is to spur innovation for a better Canada by providing funding for large projects and national innovation ecosystems.
As Alberta's leading lithium developer and extraction technology innovator, E3 Lithium now joins companies such as Rio Tinto (ASX: RIO), Stellantis (NYSE: STLA) and General Motors (NYSE: GM) who have recently received funding under this program.
"E3 Lithium's ground-breaking technology will play an important role in providing large quantities of battery grade lithium to the auto industry while also creating high quality jobs for Canadians. This project will help position Canada as a world leader in batteries and will strengthen the critical minerals sector in the Calgary region," stated François-Philippe Champagne, Canada's Minister of Innovation, Science and Industry.
The SIF investment supports all aspects of E3's resource and technology development including drilling, piloting of the company's proprietary ion-exchange technology for lithium extraction, process development and engineering including downstream lithium hydroxide conversion. The investment also supports additional development testing during the feasibility phase and the engineering and design of a definitive feasibility study.
"The breadth of the development costs this funding covers contributes significantly to the de-risking of our end-to-end project development as we progress towards a commercial facility producing battery grade lithium in Alberta. The Canadian government has committed to supporting the critical minerals supply chain; growing local Canadian supply begins with the raw materials and Alberta has a significant part to play in that future," said Chris Doornbos, president and CEO of E3 Lithium.
All eligible costs under the program are reimbursed to the company at 33.94% up to a total of $27 million. E3 can immediately apply for all eligible expenses as of the initial application date in August 2021, which includes the costs associated with its 2022 drilling program. The first reimbursement from SIF is expected to exceed $4 million.
Since 2017, E3 has secured approximately $35 million to fund its development over the last five years, exclusive of the SIF investment. The SIF investment provides funding stability without share dilution as the company works towards its first lithium production in Alberta.
E3 currently holds one of the largest inferred lithium resources amongst its peers with 24.3 million tonnes of lithium carbonate equivalent, hosted in the world-class Leduc Aquifer. This resource covers just 69% of the company’s permit area in south-central Alberta.
As outlined in E3's preliminary economic assessment, its Clearwater lithium project has an after-tax net present value (discounted at 8%) of US$820 million with a 27% internal rate of return.
Shares of E3 Lithium jumped 16.3% by 12:15 p.m. ET following the announcement, sending the lithium company's market capitalization to $149 million.
THIS ARTICLE WAS ORIGINALLY POSTED ON MINING.COM