Building Momentum During the Summer Slowdown
It has been a major month for KMX, with big milestones realized and more commercial momentum unfolding.
Over the last three weeks, we entered into a global licensing agreement with TETRA Technologies, a leading diversified energy service company, and we announced our lithium research collaboration and funding with Natural Resources Canada (NRCan) and CanmetMINING, funded by the Canadian Government.
We also recently held our first Technology Tour at our new laboratory in Mississauga, Ontario, with guests including various government officials and our strategic manufacturing partner of core elements, Sumitomo Electric. Special thanks to our Operations Manager Najam Abbasi for organizing and executing the Technology Tour.
While most of the KMX team is enjoying some much-needed end-of-summer downtime and recharging with family, KMX is building on this momentum, preparing for some exciting new initiatives and projects, is well positioned for the unfolding multi-decade lithium development cycle, and is diversifying through a partnership approach.
For this month’s update, we highlight some additional takeaways from the TETRA licensing agreement, discuss our diversification and partnership approach, discuss our recently announced Canadian Government lithium research funding, and provide some thoughts on the macro-outlooks for both our core lithium market as well as the traditional energy market.
TETRA Licensing Agreement Pairs Unique Technology with Market Leading Water Platform
As previously stated, we have been interested in licensing agreements with market leaders in established industries where companies are able to accelerate the proliferation of our unique technology by leveraging their established platforms, infrastructure, existing customer relationships, stellar commercial reputations, and international footprints.
TETRA Technologies more than meets all these criteria and we could not be happier to have provided the company an exclusive license to our technology across the global oil & gas industry.
With operations spanning six continents, over 1 billion gallons of water recycled in the first half of this year, and 62 Integrated Water Management projects with 36 different customers in the second quarter of 2022, we believe KMX has chosen an exceptional partner for the emerging new era of oil & gas water management and produced water resource maximization.
For more on TETRA’s leading water platform in the oil & gas industry, watch their Integrated Water Management Solution video here: https://tetratec.com/products-and-services/water-management/.
While we are excited to have licensed our technology to TETRA for the global oil & gas industry, we maintain a commitment on working directly with end-users of our technology in our core lithium market.
Lithium Still in Focus
Following the TETRA licensing announcement, we have received numerous inquiries on if our core focus is shifting. It is not, as lithium remains KMX’s core focus.
However, as KMX provides a powerful cross-cutting technology with multiple market applications, we maintain an interest in entering established markets (like oil & gas) alongside market leaders through a partnership approach.
Some of the additional markets which could be compelling for KMX in the future include those with complex or challenging waste streams that also require high-quality water inputs, like chip manufacturing, pharmaceuticals, food & beverage, textiles, and advanced manufacturing. Inland desalination also represents an attractive market and major growth opportunity for KMX.
Any of these markets would likely be entered alongside established players, potentially including engineering firms, allowing KMX to dedicate internal commercial efforts to lithium and other high-growth critical mineral opportunities.
TETRA and Lithium
As it relates to TETRA, we are pleased that TETRA’s CEO, Brady Murphy, stated KMX, “…could also be effective for our planned lithium extraction and production process in Arkansas.”
As a reminder, in addition to being a global diversified energy service and water management leader, TETRA is also developing a lithium and bromine-rich resource spanning 40,000 gross acres of mineral rights across the Smackover Formation in Arkansas.
More about TETRA’s lithium development plans are expected to be unveiled in the coming months, as recently highlighted.
While KMX is primarily focused on helping TETRA become leaders in the coming era of water management in the oil & gas industry, we are excited about the potential to help TETRA maximize lithium concentration and water recovery across its Arkansas lithium resource.
KMX Wins Canadian Government Lithium Research Funding with NRCan and CanmetMINING
We could not be prouder to partner with NRCan and CanmetMINING for a research collaboration aiming to optimize lithium recovery from brines across North America. The research is funded by the Canadian Government’s $47.7 million CAD Critical Minerals Research, Development and Demonstration Program announced under Budget 2021.
The funding aims to bring lithium most efficiently, economically, and sustainably from its natural state (lithium chloride) to battery grade lithium (lithium hydroxide or carbonate).
Congratulations to our commercial team, including Sales Engineer Harvey Vowels, and Chief Commercial Officer, Alexander de Vogel, for garnering this important partnership, and our technology team, including Dr. Sean Ghayeni, Dr. Matt Narrol, and Mostafa Nosraty, P. Eng., for this significant recognition by one of the leading critical mineral and mining research institutions in the world.
Very special thanks to the Canadian Minister of Natural Resources, the Honourable Jonathan Wilkinson, as well as the technology teams at NRCan and CanmetMINING for your support.
The funding substantially complements KMX’s R&D and laboratory budget and positions the company to extend its position as the leading lithium concentrator.
KMX Well Positioned in Both Traditional and New Energy Markets
Following our licensing agreement with TETRA and amidst our continued commercial momentum in lithium concentration, KMX is extremely well positioned across traditional and new energy markets.
The Inflation Reduction Act provides additional tailwinds for electric vehicle, battery, and lithium related companies. The high lithium price environment following continued automaker electrification commitments provides a favorable outlook for KMX’s core lithium concentration focus, as highlighted by Credit Suisse which estimates over a half trillion dollars committed to auto electrification.
In addition to the welcome diversification the oil & gas industry brings for KMX, we believe significant overlap will emerge between the traditional and new energy markets, in part because of the opportunity to capture critical minerals in produced water as a byproduct of oil & gas production, as highlighted in a recent discussion with Wood Mackenzie, a leading independent energy research firm, on the topic.
We have some exciting new developments unfolding including more commercial demonstrations, technology enhancements, and additional potential partnerships. We hope to share more information as it becomes available.
For our next update, we intend to share key takeaways from our recent trip to Midland, TX, where we had the opportunity to speak at the largest oil & gas water conference, the Produced Water Society’s Annual Conference, and had the chance to spend some time with the TETRA team in the Permian Basin.