Smackover Lithium Announces Positive Preliminary Economic Assessment for the Franklin Project, Its First Lithium Project in East Texas

Standard Lithium Ltd. (SLI) released a Preliminary Economic Assessment for the Franklin Project, the first defined project in Smackover Lithium’s East Texas portfolio. Smackover Lithium is a 55/45 partnership between Standard Lithium and Equinor, with Standard Lithium serving as the developer and operator. The PEA presents a lithium-only economic case, excluding bromine or potash revenue from the headline economics.

On a 100% project basis, the assessment reports an unlevered after-tax NPV8 of $5.0 billion and an unlevered pre-tax NPV8 of $5.9 billion. The project yields an after-tax internal rate of return (IRR) of 24.0% and a pre-tax IRR of 25.7%, with an after-tax payback period of 3.1 years. These figures assume a flat lithium carbonate price of $22,400 per tonne.

The production plan outlines a capacity of up to 70,000 tonnes per annum (tpa) of battery-quality lithium carbonate, with average production of approximately 64,600 tpa over a 20-year modeled life. The operation requires an average brine flowrate of 455,000 barrels per day, starting with a lithium concentration of 562 mg/L and averaging 515 mg/L over the life of the project.

Cost estimates include an initial capital expenditure (CAPEX) of $3.5 billion, inclusive of a 20% contingency, resulting in a capital intensity of $49,945 per tonne. Average annual cash operating costs are projected at $4,226 per tonne, while the average annual all-in cost is $5,054 per tonne, which includes a representative 2.5% lithium royalty.

The mineral resource update indicates 1.77 million tonnes of lithium carbonate equivalent (LCE) at 562 mg/L lithium in the Indicated category, and 2.13 million tonnes LCE at 572 mg/L lithium in the Inferred category, bringing the total lithium resource to 3.9 million tonnes LCE. Bromide resources include 2.66 million tonnes Indicated and 3.15 million tonnes Inferred, while potash resources consist of 15.06 million tonnes Inferred as potassium chloride.

The project area has expanded to 44,541 hectares, a 37% increase from the maiden inferred resource area, with 30,994 gross hectares leased across 1,196 leases. Standard Lithium plans to advance toward a Preliminary Feasibility Study targeted for 2027, continue direct lithium extraction (DLE) testing, and evaluate bromine and potash opportunities. An NI 43-101 Technical Report is expected to be filed within 45 days. The release is company-authored promotional material; the PEA is preliminary and includes Inferred Resources.

Standard Lithium Ltd. (SLI) released a Preliminary Economic Assessment (PEA) for its Franklin project, marking a significant expansion of the resource base and providing the first economic framework for the site. The maiden inferred resource of 2.159 million tonnes of lithium carbonate equivalent (LCE) has been upgraded to a total resource of 3.9 million tonnes LCE, with a portion converted to Indicated status.

The study outlines a large-scale production hub in East Texas, potentially exceeding the output of the company’s Southwest Arkansas (SWA) project. The PEA reports an after-tax net present value (NPV) of $5.0 billion on a 100% basis. Given Standard Lithium’s approximate market capitalization of $0.82 billion, this valuation is substantial, though the company notes that a 55% attribution basis would equate to roughly $2.75 billion before accounting for project-level financing, taxes, and execution risk. The assessment also highlights optionality through bromine and potash, although these commodities are not included in the headline lithium-only case.

The PEA was anticipated following guidance provided in the Q2 2026 results and the Q1 2026 transcript, which pointed to a Franklin PEA in the second half of 2026. As a preliminary study, it does not establish Mineral Reserves, and first production is not expected until the early 2030s. Capital expenditure is estimated at $3.5 billion, with a PEA-level accuracy range of -30% to +50%. Financing has not yet been identified, and the project remains at least one major study and several years away from construction.

The headline NPV assumes a flat lithium price of $22,400 per tonne over 20 years, with no inflation escalation. The company states that project economics are most sensitive to lithium price and production schedule. The after-tax calculation assumes a stand-alone US C-Corporation and excludes financing costs, meaning it does not represent a net asset value for Standard Lithium shareholders. Actual value to SLI will depend on Equinor’s continued participation, project debt terms, future lithium prices, and the successful scale-up of direct lithium extraction (DLE) technology.

Standard Lithium Ltd. is a pre-commercial lithium brine development company focused on Direct Lithium Extraction from the Smackover Formation.

The company’s flagship South West Arkansas Project is a 55% Standard Lithium and 45% Equinor joint venture through Smackover Lithium. A Definitive Feasibility Study (DFS) was filed in October 2025, outlining an initial battery-quality lithium carbonate capacity of 22,500 tonnes per annum (tpa) with an estimated capital expenditure (CAPEX) of $1.45 billion. The project holds proven reserves of 447,000 tonnes of lithium carbonate equivalent (LCE), representing approximately 38% of measured and indicated resources, and an unlevered pre-tax internal rate of return (IRR) of 20.2% in the DFS. Standard Lithium has received a National Environmental Policy Act (NEPA) Finding of No Significant Impact (FONSI) and awarded key construction contracts. Final Investment Decision (FID) is targeted for 2026, with first production targeted for 2029.

The Franklin Project is the company’s first defined East Texas asset. A Preliminary Economic Assessment (PEA) was announced on September 8, 2026, indicating up to 70,000 tpa of lithium carbonate potential with an initial CAPEX of $3.5 billion. The project hosts a total resource of 3.9 million tonnes of LCE. A Preliminary Feasibility Study (PFS) is targeted for 2027, with first production possible in the early 2030s.

A demonstration plant located in El Dorado, Arkansas, has processed over 1 million barrels of Smackover brine and completed over 15,000 Direct Lithium Extraction (DLE) cycles. The facility has reported 95%+ lithium recovery and 99%+ contaminant rejection, operating for 340,000 man-hours with zero safety incidents.

The investor presentation provided appears to be an older background brief, as it includes the LANXESS Project and older South West Arkansas ownership descriptions that do not match the current 55/45 Smackover Lithium joint venture structure.