Australia-listed Anson Resources has received approval for a modified royalty structure on its lithium lease in Utah, which will reduce costs at lower prices and improve project economics for its US-based A1 Lithium subsidiary.

Utah’s School and Institutional Trust Lands Administration (SITLA) approved the company’s request to revise the royalty terms on lease ML5440. The new structure replaces the previous flat 5% royalty with a scale ranging from 1% to 5% depending on lithium market prices. At current market levels, the royalty will be set at 1%.

The rate increases to 2.5% if prices rise above $12/kg and escalates by 0.5% for every $10 increment above $15/kg, capped at 5%. The revised lease covers 2 705 ha of land considered highly prospective for lithium-rich brines.

The company noted that the progressive royalty gives greater margin to A1 Lithium when prices are low and shares the upside when prices are higher, providing downside cost protection to investors. 

"This is yet another reason why Utah is considered as the best jurisdiction for mining in the world. In other jurisdictions such as Arkansas, where there are several lithium brine projects in the Smackover formation, the issue of royalties is unresolved, and landowners continue to demand royalties of 12.5%," stated Anson.

A1 Lithium collaborated with Utah’s government on both the royalty revision and broader regulatory reform. The company played a key role in getting the Brine Conservation Act passed. Signed into law in February, the legislation establishes a legal and regulatory framework for lithium brine development in the state.

“This royalty ruling by SITLA, along with Utah’s landmark Brine Conservation Act provides investors with regulatory surety for investment,” said Anson chairperson and CEO Bruce Richardson. 

“The legislation enhances legal and regulatory certainty for investors and paves the way for the responsible, forward-looking development of Utah’s lithium-rich brine resources.”

Richardson said A1 Lithium had been “a proactive thought leader” in shaping state policy and that the project is “one of the most advanced lithium projects in the USA”.

The company says it remains actively engaged at state, county, and local levels as it moves the project forward.