Desert Mountain signs LOI to form SNC battery plant JV

Executive Summary

• Desert Mountain Energy Corp. has signed a non-binding Letter of Intent (LOI) to form a joint venture for the construction and operation of a sodium-nickel-chloride (SNC) battery manufacturing facility in Roswell, New Mexico.
• The project involves a vertically integrated approach, utilizing produced water from regional oil and gas wells for cooling and processing, while leveraging local natural gas resources to generate electricity for the facility and an adjacent AI data centre complex.
• The initiative aims to create multiple revenue streams by extracting sodium and rare earth elements (REEs) from produced water, while providing economic benefits to the region through job creation, tax contributions, and support for local oil and gas operators.

Key Details

• Transaction Structure: Non-binding Letter of Intent (LOI) signed to form a joint venture for building and operating an SNC battery manufacturing facility.
• Location: Roswell, New Mexico.
• Core Technology: Sodium-nickel-chloride (SNC) batteries, noted for stability, long life cycle, safety (non-flammable/non-explosive), and suitability for grid support and data centres.
• Water Management & Resource Recovery:
  • Produced water from area operators will be treated and repurposed for cooling and processing, reducing aquifer extraction and lowering disposal costs for smaller oil and gas producers.
  • Sodium: Extracted from produced water, dried, and utilized directly in SNC battery production.
  • Rare Earth Elements (REEs): Extracted, dried, sealed, and shipped to qualified facilities for refining.
• Energy Integration: The company plans to use its natural gas resources to generate local electricity for the produced water system and the adjacent AI data centre infrastructure.
• Strategic Context:
  • Aligns with the White House's Genesis Mission Executive Order regarding energy transition manufacturing and critical materials.
  • References Altech Batteries Ltd., which is constructing a $170-million (U.S.) SNC plant in Saxony, Germany, as market validation.
• Economic Impact: Expected to create jobs, diversify revenue for Chaves County and New Mexico, increase tax contributions to local programs, and extend well life for neighboring operators.
• Next Steps: Parties will begin detailed due diligence, engineering evaluation, and development of a definitive joint venture agreement.

Notable Quotes

• No direct quotes from management were included in the provided text.