Prairie Lithium Secures Binding Korean Offtake- Is (ASX:PL9) a Buy as Revenue Visibility Improves?

Prairie Lithium Secures Offtake Deal – A Buy at Current Levels?

Prairie Lithium (ASX: PL9) announced today that it has secured a binding offtake agreement with South Korea’s Hydro Lithium. This locks in 100 per cent of production from its Phase 1 plant. Coming just two months after a deal with US-based Stardust Power, we believe this rapid progress strengthens the investment case. The company is now building North America’s largest direct lithium extraction (DLE) facility, and these customer commitments suggest real commercial interest in what Prairie is producing.

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Prairie Lithium Secures Customers in Asia and North America

The Hydro Lithium deal stands out because it is binding. Prairie Lithium will supply up to 150 tonnes of lithium carbonate equivalent (LCE) per year initially, with a pathway to scale to 10,000 tonnes over a decade. The product goes directly to Hydro Lithium’s operating refinery in South Korea. This suggests Prairie’s lithium meets commercial standards, which is important validation for a company still building its facility.

The October deal with Stardust Power covers 6,000 tonnes per year for an Oklahoma refinery, with deliveries potentially starting as early as 2027 and spanning up to 18 years. While non-binding, it shows a strong US interest in Prairie’s product. Together, these agreements give the company customers in two major markets before production even starts.

Prairie’s business model also keeps things simple. Rather than building expensive processing plants, the company will sell lithium-bearing crystallites to refiners. For investors, this means lower costs and a faster path to cash flow compared to developers trying to do everything themselves.

Construction Progresses on North America’s Largest DLE Facility

On the ground in Saskatchewan, work is moving forward. Foundation construction should finish in January 2026, with four commercial-scale DLE columns arriving in April 2026. The company has applied for grid power from SaskPower and has already produced Saskatchewan’s first kilogram of battery-grade lithium, proving the technology works at a small scale.

The resource backing this project is substantial. Prairie holds 6.3 million tonnes of LCE, with brine grades averaging 98 milligrams per litre and reaching 259 milligrams per litre, the highest in Canada. The prefeasibility study shows a pre-tax NPV of approximately A$700 million, an IRR of 23.9 per cent, and a payback of just 2.2 years. Operating costs sit around A$4,400 per tonne, among the lowest in the world. In our view, these numbers are attractive if the company can prove DLE works at full scale.

The Investor’s Takeaway for Prairie Lithium

At a market cap of roughly A$50 million, Prairie Lithium trades at about 7 cents on the dollar compared to its A$700 million NPV. The market is clearly pricing in execution risk. In our view, this discount looks wide if management hits its construction targets over the next year.
That said, risks remain real. The company must prove DLE technology works at a commercial scale, manage lithium price swings, and find funding to complete construction. Two off-takes help, but neither guarantees success.

The stock has dropped 35 per cent from recent highs but jumped 14 per cent on today’s news. This suggests investors see value in binding customer deals.
For risk-tolerant investors wanting lithium exposure, Prairie offers clear catalysts ahead. Conservative investors may prefer waiting until DLE commissioning proves the technology works.