Prairie Lithium (ASX:PL9) has advanced construction of its Pad #1 lithium project in Saskatchewan, reaching key development milestones as it targets first commercial production in the fourth quarter of CY26.

During the June quarter, work shifted from site construction to preparations for installation of the project’s commercial-scale Direct Lithium Extraction (DLE) system, with Factory Acceptance Testing beginning in May.

Following the end of the quarter, the four-column commercial DLE unit arrived at the Saskatchewan project site on Friday, July 10, marking a major milestone ahead of installation and commissioning.

According to the company, the unit is around four times the scale of the single commercial DLE column operating at Standard Lithium’s Arkansas project.

Prairie said the DLE system is designed to extract lithium directly from underground brine without relying on large evaporation ponds. The next stage includes mechanical installation, plumbing, integration with existing infrastructure, commissioning and performance testing before commercial operations begin.

The company also strengthened its commercial pathway during the quarter by executing a binding definitive offtake agreement with South Korea’s Hydro Lithium. The agreement covers 100% of Phase 1 production, representing approximately 150 tonnes per annum of lithium carbonate equivalent, over an initial 10-year term.

Under the agreement, Hydro Lithium will provide and operate approximately A$10 million worth of proprietary downstream refining equipment at the Saskatchewan site, reducing Prairie Lithium’s upfront capital requirements.

Prairie also completed a restructure to support its transition from developer to commercial producer. Paul Lloyd moved from managing director to chairman, focusing on corporate strategy and financing, while directors Zach Maurer and Matthew Blumberg will lead technology execution and commercial negotiations respectively.

As at June 30, Prairie Lithium held cash and cash equivalents of A$5.8 million. The sequence of a site arrival, installed processing equipment and an agreed buyer for initial output gives the project a clearer near-term operating path, although the company still needs to complete integration and commissioning before production can begin.

Looking ahead, the company’s focus will be on installing and integrating the DLE unit, commissioning the processing system, incorporating Hydro Lithium’s refining equipment and progressing toward its targeted first commercial production and initial revenue generation in the fourth quarter of CY26.

PL9 is up 16.67% today, trading at $0.70 per share.

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