Lytton Rancheria Tribe Backs Major Mojave Groundwater Bank Project

The Lytton Rancheria of California, a federally recognized American Indian tribe, has officially entered into a definitive agreement with Cadiz Inc. (NASDAQ: CDZI), securing up to $51 million in capital for the initial phase of the company's ambitious Mojave Groundwater Bank project. This agreement, announced on Tuesday, marks the first Tribal investment in the project, which is widely expected to become the largest groundwater bank in the Southwest United States.

A New Model for Water Infrastructure

The agreement formalizes a Letter of Intent signed between Lytton and Cadiz in November 2024. Lytton’s contribution represents the initial portion of a total of up to $450 million in equity capital that Cadiz is raising through Mojave Water Infrastructure Company, LLC (MWI). This special-purpose entity was created specifically to construct, own, and operate the massive groundwater bank.

Andy Mejia, Lytton Rancheria Tribal Chairperson, framed the investment as a pivotal moment for Indigenous leadership in resource management. He stated, “For generations, tribes have protected the land and water that sustains us. Today, we are taking a seat at the table to help shape how water is managed across California and the West,” affirming that the partnership demonstrates that when Tribal leadership is part of the solution, every community benefits.

Susan Kennedy, CEO of Cadiz Inc., celebrated the agreement as a historic milestone for her company, establishing a "powerful new business model for building critical infrastructure." Kennedy further noted that Lytton’s leadership has successfully transformed the Mojave Groundwater Bank "from a project to a precedent," and Chairman Mejia’s vision has opened the door to what could be "a whole new era for water in the West."

Funding Structure and Development Timeline

Under the terms of the agreement, Cadiz is authorized to draw up to $51 million in unsecured loan proceeds, which will be used to fund development and capital costs associated with the project. Lytton’s loan is convertible into membership interests in MWI, subject to the same economic terms offered to all other equity investors. The initial proceeds, estimated at approximately $15 million, are expected to be used to reimburse Cadiz for prior development expenses. Subsequent draws are anticipated to fund necessary equipment deposits for the construction of project facilities, which is currently projected to commence in 2026.

Cadiz is simultaneously in the process of finalizing its due diligence with private equity investors for up to $400 million in additional equity investment. This substantial capital raise, combined with municipal debt and government grant financing, is expected to fully fund the comprehensive construction of the project.

As part of the closing of the agreement, Cadiz will issue 600,000 shares of common stock as a commitment fee. Additionally, 25,000 shares will be issued for every $1 million funded on each subsequent draw. All shares will be issued under the Company’s effective Form S-3 shelf registration statement (File No. 333-281507). Further detailed information regarding the transaction is available in a Current Report on Form 8-K filed with the Securities and Exchange Commission on Tuesday.