Technical issues halt PFE’s lithium well re-entry program

Last week our early stage lithium exploration company Pantera Minerals (ASX:PFE) announced that it had abandoned its well reentry program due to technical difficulties.

This was not the news we wanted to hear.

PFE is located in the vicinity of some of the highest grade lithium brine in the US, in the Smackover Region of Arkansas.

The company’s land is surrounded by much bigger peers like Exxon, Albemarle and Standard Lithium:

Unfortunately, PFE was not able to recover a lithium brine sample from its well reentry program due to “technical issues” and so we won’t know if PFE’s land sits on top of the really good high grade lithium.

PFE encountered tubing and packer stuck in the hole at 9,750 feet that was meant to be reported, but a previous operator had neglected to report.

Unforeseen circumstances such as this do happen in exploration efforts - and it’s a shame PFE wasn’t able to extract a brine sample.

The decision was made to preserve capital for the company, and PFE expects to drill its own well early next year.

We hope that with its own well program PFE can mitigate some of the technical issues and risks that materialised in this campaign.

The Smackover region is still a very interesting spot for lithium development and just this week Exxon signed an offtake agreement with LG Chem for 100,000 tonnes of LCE over the next several years.

PFE has a land package of ~26,000 acres in the region and it could become an attractive takeover target if it is able to put together a lithium resource.

Unfortunately, this week's news sets back from this goal, however with a new drill program early next year the company will be able to (hopefully) deliver a resource.

How does this impact our PFE Investment Memo?

Exploration risk

PFE has said it intends to secure a lithium brine sample on the company’s acreage - there is no guarantee that lithium bearing brines are found or the brines are of economic concentrations.

Alternatively, if brines are found, they could contain contaminants that reduce or eliminate the value of PFE’s brines.

Source: 4 March 2024 PFE Investment Memo

Unfortunately, exploration risk materialised for PFE.

What’s next for PFE?

PFE expects to update shareholders “imminently” about discussions with surface owners and planning for the standalone well to spud in 2025.