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Lithium report filed by our international correspondent and roving reporter

Published 02-MAR-2024 10:00 A.M.


13 minute read

I knew this Clint Eastwood type of fellow was the right person to be riding around with.

He’s certainly seen the good, the bad and the ugly in southwest Arkansas.

We’re on a journey from the Little Rock lithium conference room to...

the middle of “nowhere”:

PFE site visit

After day one of the Lithium Innovation Summit we jumped in our trucks and headed down to Smackover to visit a part of Arkansas that few Australians have ever visited.

Smackover, Arkansas was an oil boom town in the 1920s.

From a population of just 93 people in 1920, to 25,000 in 1925 - the discovery of oil transformed the area in just a few short years.

It’s changed a lot since then too - the oil has dried up.

I hope this little pocket of Arkansas will become a “somewhere” again.

Our USA lithium Investment, Panterra Minerals (ASX:PFE) wants to help make that possible.

By pulling lithium bearing brine to the surface from old depleted oil wells in the Smackover Formation, PFE intends to use Direct Lithium Extraction (DLE) technology to produce a product that can then be put into US electric vehicle batteries.

PFE is not alone in this region of Arkansas.

Oil supermajor ExxonMobil knows an opportunity when it sees one - the ~$411BN capped ExxonMobil has invested at least US$100M in a lithium project immediately next door to PFE’s project in this part of southwest Arkansas:

PFE acreage adjacent to Exxon

Exxon drilled its first lithium well late last year in Arkansas - an “appraisal well” which gathers information about underground reservoirs, and sampling the brine from which lithium can be extracted.

Exxon first lithium rig

I’d recently heard from Exxon’s Patrick Howarth who is the company's Lithium Global Business Manager at the Lithium Innovation Summit in Little Rock the day before.

ExxonMobil are ploughing US$20BN into low emissions technologies through to 2027, and intend to make Arkansas a centrepiece of that push:

Exxon Mobil 20BN low emissions

So down to Smackover we went - the area of Arkansas that PFE (and Exxon) are working in.

I rode in the truck with JB, a retired state trooper who is working as a consultant for PFE - personal connections are important when trying to secure leases and mineral rights in this part of the world.

JB knows everyone in the area and is deeply respected by the locals.

Some of the stories from his time working as a state tropper were grizzly, but I didn’t mind.

He’s got the kind of faraway steely gaze, to boot.

It was a 2-3 hour drive and we stopped at a gas station in Fordyce to take a little pit stop.

This is Johnny Cash country - the Man in Black grew up in this part of the world.

Cleve, the land man from Texas who helps with PFE’s land leasing, took a call, and came back with a big smile on his face.

He’d found a hundred dollar bill on the ground behind the massive truck.

A good omen if there ever was one.

PFE’s chairman Barnaby talks with JB about sponsoring the local high school sports team.

We get back in the truck to meet up with an influential local businessman in Camden, Arkansas.

JB tells a story about how the local paper mill shutdown in the area, taking a lot of jobs from the Camden area with it.

Some defence contractors moved in, you could see rockets with American flags in the background on billboards along the highway.

When I got to Camden, I could see that this place needed industry and business badly - hopefully via lithium from the Smackover Formation.

The governor Sarah Huckabee Sanders knows that, and mentioned Camden by name in her speech at the Lithium Innovation Summit.

Dilapidated buildings, empty shop fronts, small town USA has been devastated post-pandemic.

The people are great - but life is hard out here.

What will replace the paper mill...?

Newspapers and printers are out, so paper is out - electric vehicles and batteries are in, so is Arkansas’ lithium in too?

I think it’s in.

We met with someone who wants to make sure that happens at the iconic local restaurant in town - Wood’s Place.

Over quintessential Southern fare like catfish fillets and sweet tea - PFE’s chairman Barnaby and recently appointed director Tim Goldsmith hash it out with the local businessman.

He’s got a direct line to the governor (Sarah Huckabee Sanders) and pulls weight in this part of the world.

Everyone knows everyone.

We take a quick snap outside of Wood’s Place before jumping back in the trucks to get down to Smackover:

PFE chairman

(From left to right: Cleve, our analyst Lachy (me), Tim, Barnaby, JB)

Back on the road, and after about an hour we made it there.

Smackover has one solitary stop light which sits right in the middle of the road (strange) and still clings onto a population of around 1,600:

PFE Smackover

An American flag fluttering in the background lets me know exactly where I am.

Smackover is ticking along a bit better from Camden from what I can tell - JB says there are good schools in the area.

That means better workers for a burgeoning lithium industry nearby.

We stopped by one oil site in the area:

PFE lithium Smackover Formation

After that we make it over to the Arkansas Museum of Natural Resources, which tells the region's boom and bust story in vivid detail...

Rich, poor...renaissance? The Aussies are in town and they want lithium

It’s a grim old day and it's winter in the northern hemisphere.

After driving over to the Arkansas Museum of Natural Resources across town, we open the door and make our way over to the front desk.

The lady behind the counter beams at us, fascinated that Australians are here - feels like a quiet day at the museum.

We’re the only ones there.

After talking for a moment, PFE’s Barnaby gets a cheeky glint in his eye.

There’s a donation box right at the front desk.

Barnaby says to Cleve - “Didn’t you find a hundred dollar bill earlier today?”

Everyone laughs.

So Cleve knows exactly what he has to do now, he whips out the Benjamin Franklin and inserts it in the donation box.

The karmic circle is complete - hopefully it brings PFE good fortune in their efforts to delineate a new lithium resource in the Smackover, right next door to recent entrant Exxon.

We start taking a look around the museum - it's remarkably impressive.

We start in a planetarium type room, which details the history of the Smackover Formation and the various bromine brine finds around the world.

Bromine is an element used in everything from detergents, to plastics and electronics.

Bromine is abundant and still being drawn out of the Smackover Formation - and accounts for a decent chunk of Albemarle's revenue still.

Albemarle is also the largest Western lithium company in the world and retains a big presence in the region.

Bromine has replaced oil as a source of revenue in the Smackover, so it makes sense that the museum leads with this.

The planetarium even includes a set of lights indicating the location of bromine discoveries in Australia...what’s wrong with this photo?

Australia Bromine photo

The Yanks have got Australia the wrong way round... Tasmania is in the bottom left corner, not bottom right corner.

Hopefully if/once PFE has made an impression in the region with a lithium discovery they might see fit to right this miniscule slight?

We then move through a series of exhibitions which detail Arkansas’ rich history in producing oil, below, a newspaper from the glory years:

Camden Evening News

This clipping from a Camden newspaper shows how the Smackover had produced more than 119M barrels of oil.

And this was in 1925.

At today’s price of ~US$80 a barrel that’s $9.5BN in value.

After oil was discovered in 1922 - Smackover was the nation's leading producer of oil for a few months in 1925.

There’s Smackover the town, and then the Smackover Formation.

The underground formation often gets named by the closest town to the discovery...

And brine is what PFE is after, not oil.



Brine from this limestone rock is what PFE intends to source its lithium from:

Brine Limestone rock

Here’s another look at the various formations in the area:

Lithium bromine formation

There’s plenty of focus on bromine bearing brine at the start of the museum...

Brine building blocks

Of course, other companies in the Smackover trying to produce lithium at scale have already hit exceptionally high concentrations of lithium - some as high as +800ppm.

We think even half that number could go a long way to making PFE’s project a viable DLE producer in the long run.

The brine production process looks a whole lot like the DLE production process:

Brine production process

We learn that brine has sustained southwest Arkansas, as the oil fields started to deplete.

A lot has changed since the 1920s...

The interior of the museum even has a Western style mock up of what Smackover looked like in the 1920s as money flooded into the new oil producing region:

Smackover Museum

The backyard of the museum has a modern iteration of how oil used to be drilled in the 1920s too - imagine climbing to the top of that rig when it was gushing?

Smackover oil drilling

We left the museum with more knowledge in hand, and a good sense of place.

We then headed into Magnolia to freshen up, and subsequently made it to the town proper (it’s basically just one roundabout of buildings) to eat at the newly opened Lefty’s restaurant.

I can’t say who we met there, but again, this person was very invested in getting lithium going in the region and over some excellent modern Southern food and drink, we continued our education.

A good night's rest - we were ready to visit where PFE has been leasing its land.

Notes on PFE’s project area

Here’s what I noticed from a visit to PFE’s project area:

  • Lots of rail in the area - good for shipping products.
  • Very flat - no topographical challenges when it comes to logistics.
  • New, well sealed roads - even in remote areas.
  • Plenty of oil rig sites scattered around - PFE will have a good set of existing drill holes to choose from to re-enter looking for lithium rich brines.

Out here in this part of Arkansas the main products that come out of the farms are cotton and soybeans:

PFE Arkansas

With a smattering of oil rigs and cattle:

Oil rigs and cattle

We stopped at a friendly local’s ranch house to fly a drone and get a sense for the area.

Going round the back of the ranch I could see that the local had a sense of humour - is Bigfoot in this snap?

PFE Ranch

Here’s hoping that the lithium is far less elusive and far more real for PFE.

And this was a key learning point:

PFE’s land man Cleve is working with a strong leasing database.

Cleve would cross reference his work with an “exclusive abstract provider” and with JB who would tell him who owns what bits of land in the project area.

PFE's exclusive abstract provider is engaged to help PFE lease up to 50,000 acres in the Smackover formation.

The 20,000 acre mark is quickly approaching - and would signify that PFE’s project is on par with the other lithium aspirants in the area:

PFE Project Map

The last update PFE put out detailed 13,457 acres with 8,600 acres under negotiation.

Let’s hope those leasing deals close soon...

Cleve, JB and the exclusive abstract provider are PFE’s competitive edge in the Smackover and they appear to be using it well.

It helps that the exclusive abstract provider is the only leasing abstract company in the region and is capable of tracking down complex mineral rights networks to facilitate PFE's entry into leasing negotiations.

There are surface rights, mineral rights and subsurface rights to acquire and contend with.

Legislation changes dating back to 1955 means there are certain land rights dynamics for Cleve to account for.

Cleve’s work is as much genealogy as geology.

Complex family networks need to be understood before presenting a lease offer.

Basically, who owns what.

JB warms up locals to Cleve’s visit and then he makes a pitch to the land owner to get a lease.

PFE’s been working this system consistently for the last 12 months...

Cleve says work in Arkansas presents a lot more opportunity than Texas as things are more straightforward and the competition hasn’t fully dialled up yet (despite Exxon’s presence).

As PFE quickly expands its footprint in the area, Cleve and JB’s work will be very valuable to the company as it looks to establish a resource by re-entering old wells.

Re-entry will cost significantly less than drilling a well - and could provide a high grade sample with which to test out various DLE technologies.

All this supports a long term aim of producing lithium for the US gigafactories and EV market.

Best of luck Cleve and JB - hopefully all goes well.

PFE site visit stop PDAC in Toronto

In the evening we got into Shreveport, Louisiana.

Another boomtown that has fallen on hard times.

A 5am flight to take me to North Carolina to see family.

A short stop in New York.

After that - PDAC in Toronto.

PDAC or the annual conference event of the Prospectors & Developers Association of Canada is another mammoth mining conference - much like Indaba which we went to in Cape Town.

I’ll have the full story on that one next week.

For now, a small bit of rest.

We’ll be eagerly watching for the next bit of news out of PFE - I wish PFE every success in helping make Arkansas a major component of US lithium supply.

A special thanks to PFE along with Cleve, Tim, Barnaby, and JB for the hospitality and insights.

We will be launching our new PFE Investment Memo on Monday.

What we wrote about this week 🧬 🦉 🏹

Whitehawk (ASX: WHK)

WHK is up by almost 400% in the last two weeks off the back of investor interest in companies that are building out AI products.

This week we laid out why we think WHK is positioned to benefit from all the market interest and what we want to see WHK achieve this year.

Read: 🔒New investor interest in WHK’s Artificial Intelligence for Cyber Security Tech

Mandrake Resources (ASX: MAN)

MAN is currently at the back end of a uranium focused rock chip sampling program at its project in Utah.

Three of the six rock chips returned a peak grade of ~0.55 uranium, the other three were deemed too radioactive by the assay labs.

Now the three samples are enroute to a lab that is able to process and assay samples that pass typical lab radiation limits.

Read more: ☢️ MAN uranium samples rejected by assay laboratory for being “too radioactive”

Top End Energy (ASX: TEE)

This week TEE acquired granted exploration licenses in and around the Beetaloo basin in the NT.

The new permits were acquired from Gina Rinehart's private energy vehicle “Hancock Energy” and is prospective for conventional/unconventional gas as well as helium and natural hydrogen.

In our note we touch on why we continue to hold TEE and what success would look like for the company.

Read more: 🔥TEE just quadrupled its acreage in NT - natural hydrogen and helium

Oneview Healthcare

This week we listened in on the ONE FY23 conference call.

The big news for us was:

  1. First sale under the reseller partnership with $32BN Baxter.
  2. Baxter’s ~100 personnel being ready to sell/support ONE to their prospects and clients.
  3. New major US hospital Mercy Health signed.
  4. BYOD Product is now launched as “MyStay” and is being used by a US hospital.

Read: 🏥 ONE 2023 Full Year Results Out - Plus Some Surprises...

Quick Takes 🗣️

88E flow test update on the North Slope Of Alaska, USA

BPM update on drilling next door to $1.7BN Capricorn Metals

DXB is all set for Phase III interim results in March

GAL geophysical surveys at its Norseman project

GLV banks $1.365M to run seismic reprocessing

MAN first batch of assay results from Utah Uranium project

PFE Completes Daytona Acquisition, 20K Acre Mark Within Sight

Bite sized summaries of the latest mainstream news in battery metals, biotechs, uranium etc: The Future Money:

Read: Helium Supply Reaches Bursting Point

Have a great weekend,

Next Investors



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