Standard Lithium (TSXV: SLI, NYSE: SLI) shares gained 7% on Friday after its jointly owned United States subsidiary, SWA Lithium, was chosen to enter talks for a funding award of up to US$225 million from the U.S. Department of Energy.
The potential financing is aimed at supporting the construction of the central processing facility for stage one of the South West Arkansas project, located in Lafayette and Columbia counties. Ownership of the project is divided between Standard Lithium holding 55% and Equinor (NYSE: EQNR) with 45%.
The first stage aims to produce 22,500 tonnes of battery-grade lithium carbonate annually, using direct lithium extraction (DLE) technology.
Standard Lithium shares traded at $1.82 apiece on Friday afternoon, valuing the company at $314.4 million. Its shares traded in a 52-week range of $1.45 to $4.85.
The funding could be one of the largest awards ever granted to a U.S. critical minerals project. It is part of the second wave of funding under the Infrastructure Investment and Jobs Act, intended to award US$3 billion to 25 projects for the battery manufacturing sector.
Standard Lithium plans to achieve a total annual output of 45,000 tonnes of lithium carbonate at South West Arkansas, to be developed in two stages of 22,500 tonnes each.
Standard Lithium noted that a definitive feasibility study and front-end engineering design are currently underway to support this expansion.
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