10:36 AM EDT, 06/27/2024 (MT Newswires) -- American Lithium ( AMLI ) said Thursday that it plans to commence piloting work for the Falchani lithium project in Peru during the second half of this year following strong results from the latest test work on the flowsheet.

According to American Lithium ( AMLI ), Falchani's flowsheet utilizes warm sulfuric acid leaching and impurity removal steps to produce a high purity lithium carbonate (LC) end product on site with purity in excess of 99.5%, typically the threshold for battery grade LC. It said "this helps drive the robust economics, particularly the low operating costs, highlighted in the company's original and recently updated Preliminary Economic Assessments." There is no need for additional refining steps offshore, it added.

The company said the results from test work showed a 50% reduction of sulfuric acid consumption as well as lower acid consumption/recycling.

American Lithium ( AMLI ) believes it can further reduce acid consumption and reagent costs while optimizing production of LC as well as "highly economic, strategic" by-products by implementing a number of additional tried and tested hydrometallurgical processing steps into the core flow-sheet.

"We are very excited about recent flowsheet work in which we continue to produce high-purity LC exceeding battery grade thresholds in repeated full-cycle tests giving us confidence to start piloting later this year," CEO Simon Clarke said.

Meanwhile, American Lithium ( AMLI ) has kept an Outperform rating and $1.50 price target from National Bank of Canada following the news.

The bank said in a Thursday note that the results of the test work was "a step in the right direction" for the company, while noting that it will await more results on the flowsheet.

On valuation, National noted Falchani currently represents 22% of its total NAV of C$1.81/sh and American Lithium ( AMLI ) currently trades at US$5 EV/t LCE vs. peers at US$181/t. And on price target, National derives its C$1.50 price target using a 0.70x NAV multiple on depreciable asset NAV of C$1.09/sh to which the bank adds its other and corporate adjustments at par.

American Lithium's ( AMLI ) share price jumped 4% at last look in TSXV to $0.78.

Price: 0.78, Change: +0.03, Percent Change: +4.00