PFE Completes Daytona Acquisition, 20K Acre Mark Within Sight
Yesterday, our US lithium Investment Panterra Minerals (ASX: PFE) completed the acquisition of Daytona Lithium.
We’d been looking out for this milestone, ever since PFE entered the US on the hunt for high concentration lithium brines for the burgeoning US EV market:
Complete the acquisition of Daytona Lithium ✅
With the acquisition complete, PFE now has full control of the project and also has a clear pathway to 20K acres in southwest Arkansas.
We sent one of our analysts to Arkansas recently to attend the inaugural Lithium Innovation Summit - catch our full write up of that event here.
The trip included a visit to PFE’s site in the Smackover Formation in southwest Arkansas.
All up, it underlined how much more we think the lithium story has to go…
We are quietly confident that despite a depressed lithium price, if and more likely WHEN the lithium price comes back, PFE will be very well placed to contribute to localised supply in the US.
For example, we recently learned that the US is far outstripping the EU in terms of downstream battery production capacity - with the country delivering growth of 77% since the middle of 2022.
That kind of pace from the US we think means more and more gigafactories to make EV batteries, and ultimately, a vast amount of US lithium demand.
Gigafactories are springing up all around Arkansas:
For background, PFE’s growing acreage is located immediately adjacent to ExxonMobil’s lithium brine project in southwest Arkansas:
ExxonMobil has already drilled its first well and intend to build a large lithium brine processing facility - the oil supermajor intends to put US$20BN into decarbonisation initiatives over between 2022-2027.
Patrick Howarth is the Lithium Global Business Manager for ExxonMobil and he made clear at the Lithium Innovation Summit that Arkansas will be the centrepiece for its lithium business.
So it makes eminent sense for PFE to move quickly to secure land in the region.
The more acres the better - yesterday’s PFE update made clear that the 20K acre mark is fast approaching after PFE increased its acreage 152% since the company made its first investment in Daytona Lithium.
While acreage expands, next up is exploration…
PFE has already released an exploration target of 436,000 to 2,966,000 tonnes of Lithium Carbonate Equivalent (LCE) which.
If exploration is successful, at the upper bounds of the exploration target, that would put PFE in the vicinity of the resource of $343M capped Smackover neighbour Standard Lithium which has a Measured and Indicated resource of 2.8 Mt LCE.
While the exploration target is “conceptual in nature”, we’re definitely looking forward to PFE’s upcoming exploration efforts which we believe could provide the underlying justifications for a re-rate that the market is looking for.
Other Smackover neighbours have already turned up exceptional lithium concentrations - so we see PFE as in with a strong chance of delivering similar results from its acreage.
We’re still strong believers in the lithium macro thematic.
We will soon release an updated PFE memo and a full PFE site visit write up, which will provide a high level summary of our PFE Investment thesis and our learnings from our analyst’s trip to Arkansas.
What’s next for PFE?
Continue leasing more ground 🔄
20K would be a great start. PFE has a 50,000-acre Exclusive Abstract Agreement (EAA) - we want to see PFE increase its ground position from its current ~13,457 acres to somewhere near the 50,000 number.
Acquisition of 2D Seismic & geophysical data 🔄
PFE plans to acquire existing 2D seismic data over its acreage. The new data will ultimately be used to guide PFE’s drill programs in the future.
Re-enter a well 🔲
The first step toward converting its exploration target into a maiden JORC resource will be to re-enter historic oil & gas wells that sit on its acreage.
The goal for the re-entry programs will be to see how much lithium sits in the ground and at what concentrations.
Arkansas is home to some of the highest concentrations of lithium in brine, anywhere in the US.
DLE test 🔲
The re-entry will bring up samples which PFE can then send off to DLE (Direct Lithium Extraction) tech partners.
