Production drilling starts at Arizona Lithium project

Arizona Lithium (ASX: AZL; US-OTC: AZLAF) announced on Monday the commencement of production drilling at its Prairie project in Saskatchewan.

The project, located in the Williston Basin of Saskatchewan, utilizes conventional oil and gas drilling and completion methods to access lithium-rich brine from aquifers about 2.3 km underground.

The commencement of drilling operations on Pad #1 marks the beginning of Canada’s first commercial lithium production plant, the miner said.

“These are very deep holes being drilled by a heavy duty oil drilling rig. It will take over 40 service providers and hundreds of people to execute a drilling and completion program like this,” Arizona Lithium’s managing director, Paul Lloyd said.

The drilling start comes as momentum builds for lithium brine projects on the Prairies, despite a drop in lithium prices since last July. EMP Metals (CSE: EMPS; US-OTC: EMPPF) is also advancing a lithium brine project in Saskatchewan, along with E3 Lithium (TSXV: ETL; US-OTC: EEMMF) and Volt Lithium (TSXV: VLT), in neighbouring Alberta. Arizona Lithium is also the only company in the brine space on the Prairies to advance its project to the prefeasibility stage.

The drilling program, covering three pads, will extend over the next few months. Production and disposal testing of the wells on Pad #1 is scheduled to start in June. The initial phase will involve drilling vertical wells to explore the Souris River and Dawson Bay formations for commercial viability.

The Prairie lithium project holds 4.5 million indicated tonnes lithium carbonate equivalent (LCE) grading 106 mg of lithium per litre, and 1.8 million inferred tonnes LCE, at 101 mg per litre, according to a pre-feasibility study released last December.  

Shares of Arizona Lithium rose 4.1% to A2¢ on Monday, giving the company a market capitalization of A$134.2 million ($121.8 million).