Arizona Lithium Awarded $21M Incentive for Prairie Project Development

Arizona Lithium, a North American company dedicated to the sustainable development of lithium projects, has secured a significant boost for its Pad #1 initiative. The Saskatchewan government's OPGII Program has granted conditional approval for Pad #1, making it eligible for up to $21.6 million in transferable royalty credits. This financial incentive program underscores the province's strong commitment to fostering the development of new lithium production facilities and solidifying Saskatchewan's position as a key player in the lithium supply chain.

The OGPII credits are awarded based on eligible expenditures and can be claimed only after a project begins commercial operations. These credits serve to offset crown royalties on lithium production, with the deduction rates set at 20% for the first calendar year, 30% for the second year, and 50% for the third year, thereby lowering the Company’s crown royalty liabilities. Additionally, these transferable credits present an opportunity for the Company to generate early cash flow by selling them to other businesses that owe royalties in Saskatchewan. This can provide significant financial flexibility and enhance liquidity during the initial stages of production.

Pad #1 has received conditional approval for an investment incentive of up to $21.6 million under the Saskatchewan Government’s Oil & Gas Processing Investment Incentive Program (OGPII). Drilling and completion activities on Pad #1 are already underway. The approved credits offer significant financial benefits, allowing claims at rates of 20% in the first calendar year, 30% in the second year, and 50% in the third year against government royalties. This structure underscores Saskatchewan’s long-term commitment to supporting the development and production of new lithium resources on Pad #1, enhancing the project's financial viability and growth potential.

As Arizona Lithium advances the Prairie Lithium Project, the OGPII will play a pivotal role in securing future funding and supporting project development. This investment incentive will significantly impact financial planning and resource allocation, ensuring the project's continued progress and contributing to its long-term success.

AZL’s Prairie Lithium Project, situated in Saskatchewan's Williston Basin, boasts a resource of 6.3 million tonnes of lithium carbonate equivalent (LCE), including 4.5 million tonnes Indicated and 1.8 million tonnes Inferred. Located in a leading mining jurisdiction, the project benefits from excellent access to essential infrastructure such as electricity, natural gas, fresh water, paved roads, and railways. Additionally, Arizona Lithium is committed to sustainable practices, aiming to minimize the use of freshwater, land, and waste, which aligns with the company’s focus on environmentally responsible lithium development.

Arizona Lithium Managing Director Paul Lloyd announced that Pad #1 at the Prairie Project has received conditional approval for up to $21.6 million in investment incentives under Saskatchewan's Oil and Gas Processing Investment Incentive (OGPII) Program. He praised Saskatchewan as a top jurisdiction committed to responsible resource development and noted the support of local governing bodies in fostering economic growth. This funding, which does not dilute shareholder value, reflects the province’s collaborative approach to industry development.

Saskatchewan Minister of Energy and Resources Jim Reiter congratulated Arizona Lithium on the approval, emphasizing the company's vital role in advancing Saskatchewan’s lithium sector and contributing to the growth of critical minerals in the region.