South West Arkansas Project

The South West Arkansas Project (“SWA Project”) located in southern Arkansas near the Texas and Louisiana borders, is the flagship project of Smackover Lithium, Joint Venture (the JV) between Standard Lithium (55%) and Equinor (45%). The Project is located approximately 15 miles (24 kilometers) west of Magnolia in Columbia County and 7 miles (11 kilometers) south of Lewisville in Lafayette County. 

The SWA Project encompasses approximately 30,000 acres of brine leases in the region, with the initial phase of project development focused on production from the Reynolds Brine Unit. The Reynolds Brine Unit is 20,854 acres and was unanimously approved by the Arkansas Oil and Gas Commission (“AOGC”) and without stakeholders or community objections. (Press Release dated April 24, 2025)

The initial phase of development contemplates production of battery-quality lithium carbonate at annual production capacity of 22,500 tonne with the non-unitized leases in the area providing significant opportunity for future expansion.

Front-end engineering design (“FEED”) was completed in support of a Definitive Feasibility Study (DFS) (Press Release dated September 3,2025) in furtherance of a targeted positive Final Investment Decision prior to the end of 2025.

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Definitive Feasibility Study Highlights

• First production targeted in 2028. Projected initial production capacity of 22,500 tonnes per annum (“tpa”) of battery-quality lithium carbonate (“Li₂CO₃”) for the Project, marking the first commercial lithium production in the Smackover Formation.
• 20-year plus operating life. Detailed Resource and Reserve modelling supports a production plan with average lithium concentration of 481 mg/L, underpinning a minimum 20-year operating life with ample opportunity for significant further expansion.
• Robust project economics. Unlevered pre-tax NPV of $1.7 billion and IRR of 20.2%, assuming a discount rate of 8% and a lithium carbonate price of $22,400/t (average of Fastmarket’s 20-year forward pricing curve for battery-quality lithium carbonate).
• Competitive OPEX. Average cash operating costs of $4,516/t over the operating life and average all-in costs of $5,924/t.
• Total CAPEX of $1.45 billion. All-in Class III capex estimate of $1.45 billion includes a 12.3% Monte Carlo risked contingency. This is informed by an 18-month detailed front-end engineering design (“FEED”) process which has yielded capital definition well beyond typical DFS studies. Conservative adoption of pilot and demonstration plant learnings used in FEED results in improved capital intensity expected on future expansion phases.
• Increased exploration activities support better Resource definition. Since completion of the Prefeasibility Study (“PFS”), the JV has re-entered wells and drilled a new in-fill well to support upgrading the Resource and modeling Proven and Probable Reserves. The Total Measured and Indicated Resource is 1,177,000 tonnes lithium carbonate equivalent (“LCE”) at an average concentration of 442 mg/L for 0.50km³ of brine volume, and Proven Reserves are 447,000 tonnes LCE at an average concentration of 481 mg/L for 0.20km³ of brine volume.
• First commercial Direct Lithium Extraction (“DLE”) in United States. Smackover Lithium is licensing Aquatech’s (formerly Koch Technology Solutions’) Lithium Selective Sorption (“LSS”) process for the initial phase of the Project, which includes performance guarantees. Opportunity exists for further operational and cost improvement on future expansion phases with regional exclusivity for the technology in the Smackover under a joint development agreement (the “Joint Development Agreement”).

 

Annual Production Capacity of Li2CO3	tpa[1]	22,500[2]
Modeled Plant Operating Life	years	20[2]
Brine Flowrate at Start of Production	bbl/d[3]	148,000
Average Brine Flowrate over Modeled Plant Operating Life	bbl/d[3]	168,000
Lithium Grade at Start of Production	mg/L	549
Average Lithium Grade over Plant Operating Life	mg/L	481
Total CAPEX	$ millions	1,449[4,5]
Average Annual Cash OPEX	$/t	4,516
Average Annual All-in OPEX	$/t	5,924[6,7]
Selling Price	$/t	22,400[8]
Discount Rate	%	8.0
Net Present Value (NPV) Pre-Tax	$ millions	1,666
Net Present Value (NPV) After-Tax	$ millions	1,275[9]
Internal Rate of Return (IRR) Pre-Tax	%	20.2
Internal Rate of Return (IRR) After-Tax	%	18.2[9]

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Measured, Indicated and Inferred Resource Estimation^{[1,2,3,4,5,6,7]}

Resource Category	Measured	Indicated	Measured and Indicated
Project Area	Reynolds Brine Unit	Potential Expansion Area	Total
		Upper Smackover
Gross Aquifer Volume, km3 [8]	4.33	2.12	6.45
Net Aquifer Volume, km3 [8]	2.86	1.39	4.25
Average Porosity	11.80%	11.75%	11.79%
Brine Volume, km3 [8,9,10]	0.34	0.16	0.50
Average Lithium Concentration, mg/L	514	293	442
Lithium Resource, thousand tonnes [2]	173	48	221
LCE, thousand tonnes [2,11]	922	255	1,177
Resource Category		Inferred
Project Area	Reynolds Brine Unit	Potential Expansion Area	Total
		Middle Smackover
Gross Aquifer Volume, km3 [8]	4.99	3.00	7.99
Net Aquifer Volume, km3 [8]	0.96	0.61	1.57
Average Porosity	9.05%	9.88%	9.37%
Brine Volume, km3 [8,10]	0.09	0.06	0.15
Average Lithium Concentration, mg/L	452	215	355
Lithium Resource, thousand tonnes [2]	39	13	52
LCE, thousand tonnes [2,11]	210	68	278

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Project Highlights

Strong Federal Government support:

• US$225 million grant from the U.S. Department of Energy’s (“DOE”) Office of Manufacturing & Energy Supply Chains (Press Release dated January 16,2025). The grant will support construction of the initial development of the SWA Project.
• Selected as one of the first critical mineral production projects to be advanced under Executive Order 14241, Immediate Measures to Increase American Mineral Production. This prestigious designation underscores the project’s strategic importance to national security, economic prosperity, and energy independence (Press Release dated April 21, 2025).

Derisking Activities:

• A robust regulatory regime supported by proven, long term brine production in Arkansas provides clarity and regulatory certainty to project execution.  The Project established a royalty for lithium production within the Reynolds Brine Unit (Press release May 29, 2025) to support execution.
• A comprehensive exploration program was completed to delineate the resource, and to understand lithium concentrations and the specific characteristics of the Smackover formation in the project area.

*Drill rig on Lester site located within the Reynolds Brine Unit

• Field Piloting of the selected DLE process validated the current design, demonstrating performance in excess of key performance criteria for SWA Project (Press release March 11, 2025).  The JV, in partnership with Koch Technology Solutions (now Aquatech), successfully completed these final Direct Lithium Extraction de-risking steps for the SWA project , a critical move towards commercialization.  Over a three-month period, the JV and its partners operated an on-site DLE field-pilot plant, where it surpassed key performance criteria and generated large-volume samples of concentrated and purified DLE product to be processed by third-party vendors of lithium carbonate conversion equipment in support of vendor qualification and preparation of offtake samples.

*Field-Pilot DLE Plant