EMP Metals: A High-Conviction Play in the Next-Gen Lithium Brine Sector

The lithium brine sector is entering a new era, driven by the global energy transition and the insatiable demand for battery-grade lithium. Amid this backdrop, EMP Metals Corp. (CSE: EMPS) stands out as a high-conviction opportunity, combining strategic resource expansion, proven production capabilities, and robust economic modeling to position itself as a key player in the next-gen lithium supply chain. With a 2027 production timeline on the horizon, EMP's recent milestones and PEA (Preliminary Economic Assessment) results paint a compelling case for investors seeking exposure to a scalable, low-cost lithium brine project in one of the world's most favorable jurisdictions.

Strategic Resource Expansion: Building a World-Class Lithium Base

EMP's 2025 resource update is nothing short of transformative. The company reported a 78.5% increase in total lithium carbonate equivalent (LCE) resources at its Viewfield and Mansur projects in Saskatchewan, with 931,038 tonnes of indicated LCE (141 mg/L lithium) and 1,117,225 tonnes of inferred LCE (112 mg/L lithium). This surge in resource estimates was driven by aggressive drilling campaigns, including the first horizontal well in Canada for lithium brine extraction, which delivered 241 mg/L lithium and 418 m³/day flow rates during extended testing.

The significance of this expansion cannot be overstated. By upgrading previously inferred resources to indicated status at Viewfield, EMP has demonstrated geological continuity and production reliability—critical factors for transitioning to reserve classification. Additionally, the company expanded its landholdings by 20% (6,700 hectares), now controlling 83,000 hectares in Saskatchewan's lithium-rich Duperow Formation. This strategic footprint not only secures future exploration upside but also aligns with the “hub-and-spoke” model outlined in its PEA, enabling scalable, modular production.

Proven Production Capabilities: From Pilot to Commercialization

EMP's operational progress in 2025 has validated its ability to extract and refine high-grade lithium. The Viewfield Pilot Program achieved 99.7% lithium carbonate purity in December 2024, using direct lithium extraction (DLE) technology. This success was followed by the launch of a DLE Field Pilot Facility in Estevan, Saskatchewan, in April 2024, in collaboration with Koch Technology Solutions and Saltworks Technologies.

The Horizontal Flow Testing Program in early 2025 further solidified EMP's production capabilities. The first horizontal well (4-23) delivered consistent lithium concentrations and flow rates, proving the viability of multi-zone extraction. These results are critical for reducing capital and operating costs, as horizontal drilling allows for more efficient resource recovery compared to traditional vertical wells.

Meanwhile, Project Aurora, a lithium refining demonstration plant with Saltworks, is advancing rapidly. This initiative aims to produce battery-grade lithium carbonate at scale, leveraging Saltworks' modular, hub-and-spoke model. With a 10 m³/day pilot already operational, EMP is de-risking its commercialization path and aligning with industry standards for low-carbon, high-purity lithium.

Strong PEA Economics: A 55% IRR and $1.49B NPV Case

The 2024 PEA for EMP's Viewfield project remains a cornerstone of its investment thesis. The assessment outlines a 23-year production life with 282,090 tonnes of LCE at an average of 12,175 tonnes per year, supported by a 55% pre-tax IRR and $1.49 billion pre-tax NPV at an 8% discount rate. After-tax metrics are equally impressive, with a 45% IRR and $1.066 billion NPV, translating to a 2.1-year pre-tax payback period.

What makes these numbers compelling?
1. Low Operating Costs: At $3,319 per tonne of LCE, EMP's all-in costs are among the lowest in the lithium brine sector. This is driven by high lithium concentrations (128 mg/L average) and efficient DLE technology.
2. High-Grade Resource: The Wymark D zone tested at 259 mg/L lithium, the highest in Canada, ensuring strong margins even in a volatile price environment.
3. Scalable Infrastructure: The PEA envisions 36 production wells, 5 DLE sites, and 2 CRC (Concentration, Refining, and Conversion) sites, with modular design enabling phased expansion.

A sensitivity analysis further strengthens the case: a 20% increase in lithium prices would push the after-tax NPV to $1.403 billion and the IRR to 56%, while a 20% decrease still leaves a $728 million NPV and 34% IRR. This resilience is rare in the lithium sector and underscores EMP's strategic positioning.

Alignment with 2027 Growth Projections

EMP's 2025 operational updates confirm its trajectory toward 2027 commercialization. The horizontal well success, pilot plant results, and Project Aurora advancements have de-risked key technical and economic assumptions in the PEA. Additionally, the company's 2025 technical report (filed August 26, 2025) provides a robust foundation for permitting and financing, with a 3-4 month field pilot planned for Q1 2024 (completed in 2025) to refine DLE and CRC processes.

With $571 million in CAPEX and $40 million in annual OPEX, EMP's capital efficiency is another strength. The company's focus on direct lithium extraction—which avoids costly evaporation ponds—reduces environmental impact and accelerates production timelines. This aligns with investor preferences for sustainable, ESG-compliant projects.

Investment Thesis: A High-Conviction Play

EMP Metals is uniquely positioned to capitalize on the lithium brine boom. Its strategic resource expansion, proven production capabilities, and strong PEA economics create a compelling case for 2027 growth. Key catalysts include:
- 2027 production start: With infrastructure and technology validated, EMP is on track to transition from exploration to commercial output.
- Lithium price resilience: Even at $20,000/tonne (the PEA's base case), EMP's low costs and high grades ensure profitability.
- Strategic partnerships: Collaborations with Koch and Saltworks provide technical expertise and de-risk commercialization.

For investors, EMP offers a rare combination of high-grade assets, low-cost production, and proven management. While lithium prices may fluctuate, EMP's long-term economics and scalable model position it to outperform peers.

Final Recommendation: EMP Metals is a high-conviction, long-term play for investors seeking exposure to the next-gen lithium brine sector. With a 2027 production timeline and a robust PEA, the company is well-positioned to deliver outsized returns as the global demand for battery-grade lithium accelerates.