Dr. Andy Robinson reports

STANDARD LITHIUM ANNOUNCES POSITIVE PRELIMINARY FEASIBILITY STUDY RESULTS FOR ITS SOUTH WEST ARKANSAS PROJECT

Standard Lithium Ltd. has released the positive results of a preliminary feasibility study (PFS) for the company's 100-per-cent-owned South West Arkansas (SWA) project.

All figures are in U.S. dollars unless otherwise stated.

PFS highlights:

• Lithium brine project in southwestern Arkansas. PFS indicates base case production of 30,000 tonnes per annum (tpa) battery-quality lithium hydroxide monohydrate (LHM); upside case of 35,000 tpa;
• 20-year-plus operating life. Upgraded mineral resource averaging 437 milligrams/litre (mg/L) underpins a minimum 20-year operating life;
• Robust project economics. Base case after-tax net present value of $3.1-billion and internal rate of return of 32.8 per cent and upside case after-tax NPV of $3.7-billion and IRR of 35.4 per cent, assuming production of 30,000 tpa and 35,000 tpa, respectively, and both assuming a discount rate of 8 per cent and a long-term price of $30,000/t for battery-quality LHM;
• Competitive operating costs. Average annual operating costs of $4,073/t of LHM over the operating life;
• Capital expenditure of $1.3-billion. Total capex estimate of $1.3-billion includes conservative 20-per-cent contingency;
• Increased lithium grades support larger resource. Upper Smackover indicated and Middle Smackover inferred resource of 1.4 million tonnes (Mt) and 400,000 tonnes lithium carbonate equivalent (LCE), respectively, with an average lithium concentration of 437 mg/L and maximum reported lithium grade of 597 mg/L.

"The robust economics from the South West Arkansas project PFS showcase its incredible potential," said Dr. Andy Robinson, president and chief operating officer of Standard Lithium. "Our exploration program in the first half of this year yielded significantly improved lithium concentrations and grew the total resource to 1.8 million tonnes of lithium carbonate equivalent. The upgraded resource underpins an operating life of at least 20 years at competitive costs.

"Our team has also been hard at work at our demonstration plant at the Lanxess South facility in El Dorado, processing approximately 14 million gallons of Smackover brine to date and successfully extracting lithium. We now have a well-tested direct lithium extraction (DLE) process, and we successfully converted our DLE product into battery-quality lithium hydroxide. This start-to-finish proven process, combined with an improved resource at SWA, positions the project to be a meaningful contributor to U.S. lithium supply within this decade."

"Standard Lithium's pioneering work in the Smackover formation and strong results of the SWA PFS solidifies the region's status as North America's premiere lithium brine resource," commented Standard Lithium chief executive officer Robert Mintak. "Our mission is to boost domestic lithium production through a phased development approach. Starting with the Lanxess 1A project, we aim to deliver the first new lithium production facility in the U.S., with results from a feasibility study to be reported shortly. These encouraging outcomes from SWA, along with our initiatives in East Texas, underscore the need for simultaneous advancements within our project portfolio, as we are dedicated to leading the region into becoming a key player in America's lithium supply chain."

About the South West Arkansas project

The South West Arkansas project is located approximately 15 miles (24 kilometres) west of the city of Magnolia in Columbia county, southwestern Arkansas. It encompasses approximately 27,262 net lease acres in Columbia and Lafayette counties and forms the updated 2023 Upper Smackover indicated and Middle Smackover inferred resource of 1.4 Mt and 400,000 tonnes LCE, respectively, at an average lithium concentration of 437 mg/L. The project is easily accessible via a paved highway and extensive regional infrastructure including: water, power, gas and rail. The region's rich history of operating oil and gas assets supports the local work force pool.

The company is targeting construction to begin in 2025 and production to commence in 2027, subject to continuing project definition, due diligence, available financing and receipt of future feasibility studies.

Project overview

The development plan considered for the SWA project PFS demonstrates production of battery-quality lithium hydroxide monohydrate averaging 30,000 tonnes per annum over a 20-year operating life. The project will pump brine from the Smackover formation aquifer via production wells, extract lithium from the brine, convert it to a saleable product and then reinject the effluent brine via injection wells to maintain pressure in the reservoir.

The PFS assumes a network of 21 brine supply wells will be completed in the Smackover formation, producing approximately 1,700 cubic metres/hour or 7,500 U.S. gallons per minute. Twenty-two injection wells will support pressure maintenance in the Smackover aquifer to maintain long-term production.

Brine from the supply wells will be routed to a lithium extraction and lithium hydroxide production facility by a network of underground fibreglass pipelines. The brine entering the production facility will be pretreated and then processed via Koch Technology Solutions' lithium selective sorption (LSS) DLE process described further below. After purification and concentration, final conversion to a lithium hydroxide product would use a modified chlor-alkali electrolysis process.

After lithium extraction, the lithium depleted brine will be returned to the resource area by a pipeline system to the network of brine injection wells.

LSS direct lithium extraction

Standard Lithium has been developing two forms of direct lithium extraction at the demonstration plant in Arkansas: the company's proprietary LiSTR process and a co-developed lithium selective sorption (LSS) process which is a Koch Technology Solutions proprietary technology. Under the joint development agreement with KTS, Standard Lithium has Smackover regional exclusivity for the LSS process (see news release dated May 9, 2023).

Both the LiSTR and LSS DLE processes have successfully selectively extracted lithium from Smackover brine. The company used the LSS process as the basis for the DLE in the SWA project PFS based on certain technical and commercial considerations.

The LSS process has been in operation at the demo plant since October, 2022, with over 6,000 operating cycles having been concluded at the time of the PFS, achieving consistent lithium extraction efficiencies of greater than 95 per cent and contaminant rejection efficiencies over 99 per cent.

The LSS process produces a high-quality lithium chloride solution which will be further purified and concentrated by means of reverse osmosis, chemical softening, ion exchange and evaporative crystallization. The result is a high-purity lithium chloride suitable for electrochemical conversion to lithium hydroxide.

Lithium hydroxide production

The further concentrated and purified lithium chloride solution will be processed by electrolyzers to form a high-purity lithium hydroxide solution. The company evaluated several technologies at laboratory- and pilot-scale testing to support the selection of electrolysis as the core technology for conversion of lithium chloride to lithium hydroxide.

The testing undertaken during the PFS phase produced battery-quality lithium hydroxide from Smackover brines processed through the demo plant, confirming the viability of the process. The output solution from electrolysis will be crystalized into a solid, battery-quality lithium hydroxide monohydrate (LHM) using standard, proven processes.

Capital costs

At full buildout, with estimated average production over 20 years of 30,000 tpa of LHM, the direct capital costs are estimated at $845-million, with indirect costs of $218-million. A contingency of 20 per cent was applied to total installed costs ($211-million), yielding an estimated all-in capital cost of $1,274-million.

Operating costs

The operating costs are based on the operation achieving average annual production of 30,000 tpa of LHM. Cost estimates include both direct and indirect costs, as well as allowances for mine closure/well abandonment.

The operating cost over the life of the project is $4,073/t of LHM. All-in operating costs, including sustaining capital expenditures and royalties, are $5,229/t. The majority of the operating costs come from reagents required to extract the lithium from the brine as well as power consumption for conversion to LHM.

Project economics

The financial results are derived from inputs based on the annual production schedule as set forth in the PFS.

Mineral resource assessment

The PFS contemplates production of battery-quality lithium hydroxide averaging 30,000 tpa over a 20-year operating life. This was informed by an exploration program that was executed over a five-month period from February, 2023, to July, 2023, including the drilling of two new wells and re-entry of three decommissioned and abandoned wells.

The results of the drilling program and resource assessment are presented herein. The distinction between north and south areas identified in the PEA has been retained to allow for comparison, though the relative shape and extent of these areas has been adjusted based on drilling data.

The categorization of mineral resource associated with the Upper Smackover formation evaluated in the PFS has been upgraded to indicated. The Middle Smackover remains at the inferred mineral resource category.

This reclassification is based on the large amount of data collected by the exploration program conducted in the first half of 2023 (see news release dated May 23, 2023). This body of data has demonstrated the volume of porous reservoir and the lithium content of the associated brine in the Upper and Middle Smackover formation.

The total in situ inferred and indicated lithium brine mineral resource is estimated at 74,000 and 269,000 tonnes of elemental lithium, respectively.

The updated 2023 SWA project resource is 52 per cent larger than the 2021 PEA resource estimate. The resource increase is primarily related to the higher concentration of lithium, which increased in concentration from an overall average of 255 mg/L to 437 mg/L. Higher lithium concentrations offset a reduction in brine volume associated with tightened and enhanced reservoir definition.

Next steps and recommendation

The principal recommendation from the PFS is that the project is ready to progress to a feasibility study. The feasibility study is expected to be completed in 2024 with construction commencing in 2025 and first production in 2027.

Summary of consultants -- quality assurance

The report was prepared by a multidisciplinary team of qualified persons (QPs) that include geologists, reservoir engineers, civil and chemical engineers with relevant experience in brine geology, brine resource modelling and estimation, lithium-brine processing, chlor-alkali processing, and project development/execution. This was combined with an update of the resource assessment completed by Cobb & Associates. A National Instrument 43-101 report is required to be filed, in conjunction with the disclosure of the PFS in this news release, within 45 days.

The companies and independent contractors involved in completing the PFS include:

Hunt, Guillot & Associates (HGA): HGA's headquarters are in Ruston, La., near to the SWA project. HGA has extensive engineering and construction expertise in the Gulf Coast region. HGA is a private company founded in 1997 with more than 650 engineering and project management professionals.

William M. Cobb & Associates: Cobb & Associates is based in Dallas, Tex., and was formed in 1983 to provide quality reservoir engineering, formation evaluation and geological services. Cobb & Associates is recognized as an industry leader in identifying and solving complex technical problems with considerable experience and expertise in the areas of brine resource production and management, reservoir analyses, waterflood studies, miscible and immiscible gas injection projects, reserve analyses, property evaluations, geology and petrophysics, economic studies, and expert witness testimony.

Alliance Technical Group: Alliance Technical Group is headquartered in Decatur, Ala., with a core competency location in Bryant, Ark., and was established in 2000 to provide environmental support to engineering and construction projects.

Marek Dworzanowski: Mr. Dworzanowski is an independent consulting metallurgical engineer based in Trejouls, southwest France. Mr. Dworzanowski has 40 years of metallurgical engineering experience, covering a wide range of commodities and unit processes. This includes extensive experience with lithium brine processing.

Frank Gay: Mr. Gay is vice-president and executive project director at Hunt, Guillot and Associates. He has an MS and BS in chemical engineering from the Massachusetts Institute of Technology and more than 35 years of experience in project management, engineering management and general management.

News release quality assurance

The information contained in this news release relating to the SWA project PFS has been compiled by the above-mentioned companies and independent contractors.

The information in this press release has been reviewed and approved by Mr. Gay and Mr. Dworzanowski. Mr. Gay and Mr. Dworzanowski are qualified persons as the term is defined in National Instrument 43-101 and are independent of Standard Lithium.

About Standard Lithium Ltd.

Standard Lithium is a leading near-commercial lithium development company with a portfolio of projects in progress. The company's flagship projects, the Lanxess project and the South West Arkansas project, are located in southern Arkansas near the Louisiana state line. The company is focused on the evaluation and testing of commercial lithium extraction and purification from brine sourced from approximately 180,000 acres of leases across these two projects.

We seek Safe Harbor.