Corporate Presentation - Accueil | Nemaska Lithium€¦ · Nemaska Lithium | Company Overview 1 2...
Transcript of Corporate Presentation - Accueil | Nemaska Lithium€¦ · Nemaska Lithium | Company Overview 1 2...
May 2018
Corporate Presentation
Forward-
looking
statement
• During the course of this presentation, Nemaska Lithium
Inc. will make a number of statements with regard to the
Company’s projects, business strategy and plan, which
could be construed as forward-looking.
• Such forward-looking statements are subject to risks and
uncertainties that could cause results to be materially
different than expectations. It is uncertain if further work
will in fact lead to production of mineral resources and of
lithium compounds.
• Nemaska filed a NI-43-101 compliant feasibility study
report on SEDAR on February 23, 2018. All technical
information should be reviewed according to this 2018
feasibility study.
• All figures are in Canadian Dollars unless otherwise
specified. Exchange Rate is CAD$1.00 = USD$0.77
2
3
Vertically integrated
lithium project
• Nemaska Lithium’s Whabouchi project in Québec is a vertically integrated lithium project from the raw material
at Whabouchi mine producing a high quality spodumene concentrate which is then transported and supplies
the Electrochemical Plant in Shawinigan producing high-purity lithium hydroxide and lithium carbonate.
Lowest cost producer
of lithium hydroxide
• With a vertically integrated operation, proprietary process, and access to affordable hydroelectric power in
Québec, these are key factors in the Whabouchi project being forecast to become the lowest cost producer of
lithium hydroxide globally.
Near-term cash flow• The construction and commissioning of the Whabouchi Mine and concentrator will result in the early
production of high- grade spodumene concentrate producing cash flow as expected to ramp-up in 2019 that
will support the financing in the Shawinigan Electrochemical Plant with expected start up in 2020.
World-class
counterparties
• Nemaska Lithium has secured world-class offtake partners by entering into agreements with FMC and
Johnson Matthey. The various groups have given the project key endorsements through offtake contracts,
product qualification and financial support. In addition, the Company has announced a streaming agreement
with Orion Mine Finance for USD 150 million and a private placement with SoftBank, as a strategic investor of
up to CAD 99 million.
Strong support from
key stakeholder
• Nemaska Lithium has strong support from both the Government of Québec and Federal Government that have
collectively invested CAD 26 million in Nemaska Lithium. Additionally, the Cree Nation of Nemaska has
independently acquired approx. 3% of the outstanding common shares.
Strategically located• The Whabouchi Project is ideally located with access to existing rail lines and the port of Trois Rivieres,
enabling the cost effective supply of products to customers.
Phase 1 Plant proof of
concept
• Nemaska Lithium constructed and developed a Phase 1 plant in 2016/17. The plant is a 1/65 scale
demonstration plant. The operating Phase 1 plant has successfully produced lithium hydroxide from
Whabouchi spodumene concentrate demonstrating Nemaska Lithium’s ability to produce lithium hydroxide,
and also enabling the qualification of products with customers and off-takers.
Investment Highlights
4
Nemaska Lithium | Company Overview
1
2
10,000 tonnes bulk sample producing
~1,100 tonnesspodumene concentrate
@ 6.25% (Li2O)
Phase 1 Plant successfully built, transforming
spodumene concentrate to high purity lithium
hydroxide
3
Delivered 30 tonnes of lithium hydroxide
samples of battery grade quality to Johnson
Matthey satisfying their product specification
Construction and development of commercial operations targeting(1)
✓ Start commercial production of spodumeneconcentrate in Q3 2019.
✓ Start commercial production of lithium hydroxide and carbonate in Q3 2020.
✓ Spodumene concentrate production on average of approx. 213,000 tonnes per year @ 6.25% (Li2O).
✓ Lithium hydroxide production on average of approx. 23,000 tonnes per year.
✓ Lithium carbonate production on average of approx. 11,000 tonnes per year.
Nemaska Lithium's Accomplishments to Date Next Steps
(1) Production figures are based on average yearly figures for life of mine and Shawinigan Electrochemical Plant and assumes project financing completed in Q2 2018Source: Nemaska Lithium Feasibility Study Issue Date 21st of February 2018
5
Nemaska Project Overview
Québec
Saguenay
Rouyn-Noranda Val-d’Or
Matagami
Nemaska
Chibougamau
Shawinigan
Montréal
Positioned to Become
1. One of North America’s largest spodumene deposits
located in the Eeyou Istchee James Bay region, Canada
• High grade NI 43-101 spodumene reserve of 37 Mt @ 1.4%
(Li2O).
• Expected to produce 213,000 tonnes on average of spodumene
concentrate @ 6.25% (Li2O).
• 11,000 tonnes bulk sample completed.
• 1,100 tonnes of spodumene concentrate @ 6.25% (Li2O)
produced.
a Fully-Integrated Lithium Producer2. The Whabouchi Mine in Nemaska is located close to
Shawinigan Electrochemical Plant
• Deposit located close to infrastructure with regional road
connecting the Whabouchi Mine to rail infrastructure.
• Mine site located 855 km from Shawinigan Electrochemical
Plant.
3. Shawinigan Electrochemical Plant to convert spodumene
concentrate to lithium carbonate and hydroxide that is
close to port
• Expected to produce on average 23,000 tonnes per year lithium
hydroxide.
• Expected to produce on average 11,000 tonnes per year lithium
carbonate.
• Access to affordable hydro electric power in Québec allows for a
low-cost conversion.
Source: Nemaska Lithium Feasibility Study Issue Date 21st of February 2018
6
Guy
Bourassa(1)
President & CEO,
Director
• President & CEO of Nemaska since inception in
2008.
• Over 33 years of mining experience. He is currently
a director of the Nouveau Monde Graphite and
Monarques Gold Corporation.
Steve Nadeau
CFO• CFO of Nemaska since inception in 2008.
• Over 20 years of accounting and finance experience in mining, manufacturing, electronics and automotive fields, previously acted as CFO of Monarques Gold Corporation.
• More than 25 years of experience in the mining and
metallurgical industry, both in Canada and
internationally.
• Previously Vice President of Human Resources and
Communications for Koniambo Nickel, a large-scale,
complex nickel operation in New Caledonia.
Chantal
Francoeur
VP Human
Resources
• More than 25 years of experience in the mining
industry, both in North America and internationally.
• Headed legal affairs for Graymont Limited and
Cambior Inc. (now Iamgold Corporation), as well as
for the African Region of Kinross Gold Corporation.
Marc Dagenais
VP Corporate
Secretary & Legal
Affairs
Senior Management and Board of Directors
Michel Baril(2)
Chairman
• Over 30 years as a mechanical engineer and senior executive.
• Currently serves as a Director at Raymor Industries Inc.
• Former President & COO at Bombardier’s Recreational Products division and EVP of Bombardier Transportation.
François
Biron(2)
Director
• Mining engineer with more than 40 years of mining experience.
• Formerly, General Manager at Inmet Mining Corporation.
Paul-Henri
Couture(2)
Director
• Over 35 years of experience as a financial management and investment professional specializing in mining.
• Held senior positions at the Caisse de dépôt et placement du Québec and Sentient Asset Management.
René Lessard
Director• Independent sales consultant in the construction industry.
• Formerly, Sales Manager at Campagna Motors and T-Rex Vehicles.
Senior Management
(1) Member of the Board of Directors(2) Members of the Executive and Audit Committee
Board of Directors
Source: Nemaska Lithium
Construction and Operations Team
7
Technical and Operations Team
Yves
Painchaud
Construction Project
Manager
• Senior mechanical engineer in the industrial field with over 30
years of significant experience in major construction sites in
Québec.
• During his career, he has held various management positions
and has been managing and supervising his own engineering
firm for more than 15 years.
Jean Béliveau
Project Engineering
Director
• Professional mechanical engineer experienced in the fields of
General Management, operations and maintenance
management as well as project management.
• Was involved in the start-up of new manufacturing production
units in Canada and abroad.
• A graduate in mining engineering from McGill University, Guy
holds over 35 years of industry experience.
• Over the course of his career, he has been part of both
underground and open-pit mining projects in Québec, Canada
and internationally with postings in Brazil, Chili, Columbia,
Nicaragua, Mali, Mexico, Portugal and Tunisia.
• Professional engineer with over 20 years of experience
in the metallurgical industry and the lithium battery
industry.
• Author/inventor of several patents in the rechargeable
lithium battery industry.
Jean-François
Magnan
Technical Manager
• Professional chemical engineer with more than 30 years
of experience in various manufacturing industries,
mainly the industrial chemical sector.
Bertin Ouellet
Process Chemical
Engineer
• Masters degree in Electrochemical Engineering and
Technologies. He has played an active role in
Nemaska’s pursuit of patents covering its innovative
technologies, of which he is a co-inventor.
Nicolas
Laroche
Electrochemical
Engineer
Simon Thibault
Director,
Environmental and
Social
Responsibility
• Specialized in environmental mining policies and
permitting in Canada, especially in the provinces of
Québec, Ontario and Manitoba.
• Collaborated on Environmental Permitting of mining
projects, Environmental and Social Impact Assessments,
Environmental Auditing and Environmental Baseline
Studies, Preliminary Economic Assessments, Pre-
Feasibility Studies and Feasibility Studies.
Technical Team
André
Bouchard
Director of
Operations,
Shawinigan Plant
• Professional with more than 30 years of experience in
operations and maintenance management for Rio Tinto’s
titanium dioxide metallurgical and chemical plants.
• He has an outstanding record in the implementation and
administration of world-class asset management processes,
continuous improvement programs and strategic asset
planning.
Source: Nemaska Lithium
Guy Lauzier
General Manager
Whabouchi Mine
Capital Structure (May 14, 2018)
Shares outstanding 402,018,577
Options (average exercise price $0.76) – August 2018 to March 2023
Warrants (average exercise price $1.49) – July 2019
15,949,484
30,825,635
Fully Diluted 448,793,696
Distribution on a fully diluted basis
Management and employees
Ressources Québec, Tianqi and Nemaska Development Corp.
Institutional
Others
≈8 %
≈13 %
≈45%
≈34 %
8
9
Streaming Agreement | USD 150 million
• Orion Mine Finance is an alternative investment manager with USD 3.9 billion under management and specializes in providingflexible and comprehensive capital solutions to global mining companies.
• Orion Mine Finance has a seasoned team of investment professionals with demonstrated capabilities in structuring debt, equity,streaming, offtake and royalty investments; its strategy is to employ a disciplined, risk-adjusted investment process when evaluatinginvestment opportunities.
• It has provided stream finance to a wide range of mining companies, including Stornoway Diamond Corp, Lundin Gold Inc, PremierGold Ltd, Lydian International Ltd, Lynx Resources Ltd, Pretium Gold Inc, Heron Resources Ltd, Mantos Copper SA and LithiumAmericas Corp.
Provisions Comments
Funding: • USD 150 million provided by Orion Mine Finance to be used for the construction of the Whabouchi Project
Stream:
• Orion Mine Finance will purchase 14.5% of all lithium products produced from the Whabouchi and Shawinigan Projects (excluding the first 300,000 tonnes of spodumene concentrate)
• Orion Mine Finance shall pay 40% of Nemaska’s average realised sales price per tonne for all lithium products purchased under the stream
• Nemaska Lithium is responsible for selling 100% of the lithium products to third parties, with Nemaska’s payments under the stream satisfied on a net cash settlement basis
Security :
• Guaranteed by the members of the Debtor Group
• Second rank security to the bond issue
• Security is governed by the intercreditor agreement, subordinating the claims of the Streaming Facility
Cap: • The Streaming Facility is capped at 5,000 tonnes per annum(1)
Streaming Facility Terms
(1) There is a make-whole in the event that Nemaska falls short, allowing the cap to be increased the following year.Source: Orion Mine Finance
About Orion Mine Finance
10
SoftBank Private Placement | CAD 99 million
About SoftBank
• The SoftBank Group (TOKYO:9984) is a Japanese global technology player that aspires to drive the information revolution with amarket capitalization of USD 78 billion and an enterprise value of USD 202 billion.
• SoftBank makes investments in a variety of ventures in Japan and beyond. Its portfolio holdings extend from mobile and fixed-linetelecommunications to internet commerce and content, technology services, marketing and broadband infrastructure. The Companyalso provides venture capital to +60 technology-related companies in Asia, Europe, and the US.
• "This investment in Nemaska is of monumental importance to the SoftBank Group's strategy," said Masayoshi Son, Chairman & CEOof SoftBank Group Corp. "We are extremely pleased to be further accelerating the Mobile Revolution, an era of IoT (Internet ofThings) and electric vehicles enabled by the fusion of technology and energy storage“.
Provisions Comments
Amount: • CAD 99 million, subject to SoftBank not exceeding 9.9% ownership.
Price: • CAD 1.12 per Receipt
Completion:
• Completion of the Placement is subject to customary escrow release conditions for this type of transaction, including approval of the Toronto Stock Exchange. The closing of the Placement is expected to occur on or about April 2018.
Escrow:
• The gross proceeds from the placement will be held in escrow and, once the escrow release conditions will be satisfied or waived (which include raising additional equity, concluding the streaming facility agreement and securing debt financing commitments), each receipt shall be automatically converted into one (1) share and the net proceeds of the placement will be released to the Corporation. If the escrow release conditions have not been satisfied or waived by August 6, 2018, the Receipts will be automatically cancelled and funds will revert to SoftBank.
Private Placement Key Terms
Rechargeable battery
42%
Ceramics 12%
Glass-ceramics 12%
Greases 7%
Polymer 5%
Glass 5%
Metallurgical powders
4%
Primary battery 2%
Air treatment 2%
Other 9%
Uses of Lithium in 2016 Uses of Lithium in 2026E
11Source: Roskill Marketing Review on Nemaska Lithium, 19th of February 2018
Lithium Uses 2016 and 2026E
Total demand ~197,000 tonnes
Lithium Carbonate Equivalent
Expected total demand
~1,008,000 tonnesLithium Carbonate
Equivalent
Rechargeable battery
86%
Ceramics 3%
Glass-ceramics 3%
Greases 2%
Polymer 1%
Glass 1% Primary
battery …
Air treatment 0%
Other 2%
17
167
183
3434
12
15 274 45 5
34 34
1
37 38
29,5
325
GWh in 2016 Additional capacity being built or expected to be built GWh in 2021E
GW
h p
er y
ear
USA Sweden Poland Japan Korea Germany China Total
12
Source: Nemaska Lithium company presentation 9th of March, Benchmark Intelligence Network
24 260
‘000 tonnes battery grade LCE consumption per year in 2016
‘000 tonnes battery grade LCE consumption per year expected in 2021
Assumed 0.8 tonne LCE per GWh
Gigafactories Driving Demand for Lithium
10x in Expected Lithium Demand from Gigafactories between 2016 – 2021E
13
Pricing Outlook
Nominal Price Forecasts for Spodumene Concentrate, Lithium Carbonate and Lithium Hydroxide
9 510
13 183
13 900
14 750
15 700
16 700
17 800
19 000
20 200
7 585
12 500
11 020
12 750
14 100
15 500
17 050
18 800
560
790
850
700
600
550
500510
520530
540550
570590
610630
300
400
500
600
700
800
900
5 000
7 000
9 000
11 000
13 000
15 000
17 000
19 000
21 000
2016 2017 2018e 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e 2031e
USD
per
to
nn
e
USD
per
to
nn
e
Lithium Hydroxide (Left axis) Lithium Carbonate (Left axis) Spodumene Concentrate (Right axis)
Source: Roskill Marketing Review on Nemaska Lithium, 19th of February 2018
14
Supply Outlook
Lithium Supply(2)New Lithium Development Projects(1)
Source: Roskill Global Industry, Markets and Outlook to 2026
• In response to the large increase in demand there are severalnew lithium development projects in the pipeline
• In response to increased lithium demand, new lithium supply hascome online predominantly from spodumene concentrateproducers in Australia
• After 2020, lithium produced from brine is expected to capturemarket share as some of the larger brine projects are expected tocome online in Argentina and Chile
(1) Estimates made prior to announcement of SQM and ALB’s deal with CORFO(2) Capacity outlook is total mined capacity assuming 100% utilization
15
2018 Feasibility Key Figures
Average Cost Per Tonne - Spodumene Concentrate
CAD 334/t (USD 257/t) CIF Shawinigan (open pit)
Average Cost Per Tonne - Lithium Hydroxide
Sales Prices FOB Shawinigan lithium hydroxide USD14,000/t, lithium carbonate USD 9,500/t for first 5 years and USD 12,000t thereafter
All calculations assume a 6.25% (Li2O) spodumene concentrate
Exchange rate CAD/USD: 0.77
Yearly Average Production
CAD 3,655/t (USD 2,811/t) FOB Shawinigan
Average Cost Per Tonne - Lithium Carbonate 99.99%
CAD 4,424/t (USD 3,403/t) FOB Shawinigan
Whabouchi Mine
≈ 213,000 tonnes of concentrate (6.25% Li2O)
Shawinigan Electrochemical Plant
≈ 23,000 tonnes of lithium hydroxide
≈ 11,000 tonnes of lithium carbonate
33 yearswith 2.9 year payback period (after-tax)
Expected Mine Life and Payback Period
NPV
CAD 3.3B (USD 2.5B)
8% Discount (pre-tax)
CAD 2.4B (USD 1.8B)
8% Discount (after tax)
Internal Rate of Return (IRR)
34.4% (pre-tax) 30.5% (after tax)Total Initial Capital Costs
CAD 801m (USD 616m) in CAPEX
including contingency)
Source: Nemaska Lithium Feasibility Study, Issue Date 21st of February 2018
16Source: Nemaska Lithium, Google Maps
Whabouchi Mine | Mine Site Infrastructure
Montreal
Vancouver
Toronto
Nemaska
Cree community of Nemaska
To Route de la Baie-James
2km
Nemiscau Airport
Nemiscau Substations
Relais routier km 291
Whabouchi deposit
AlbanelSubstations
Route du Nord to Chibougamau
Powerlines
Roads
Whabouchi Property
• The Whabouchi Mine in Nemaska lies in close proximity to a network ofpowerlines with two hydro-electric power stations within 20 km.
• Whabouchi Mine located next to Route du Nord, which connects toChibougamau and James Bay Road.
• The Nemiscau Airport is located 17 km from mine site.
• The Cree community of Nemaska is over 30 km from the Whabouchi Minesite.
Mine Overview
Hudson Bay
17
Reserve Overview
Category Tonnage (Mt) Li2O (%)(1)
Open pit
Proven and probable 24 1.53%
Underground
Proven and probable 13 1.16%
Combined
Proven and probable 37 1.40%
Whabouchi Mine
Whabouchi Deposit
Simulation of how the Whabouchi Mine will look like once it is in production
Whabouchi Mine | Reserves and Deposit
(1) Li2O refers to spodumene concentrateSource: Nemaska Lithium Feasibility Study, Issue Date 21st of February 2018
18
Whabouchi Mine | Mining
• The Whabouchi Mine will operated as a conventional open-pit, truck and shovel, drill and blast operation.
• A 24-year mine life open pit and extension to 33 years viaunderground operation.
• Run-of-mine 1.03 million tonnes per annum ore grading 1.47-1.59% spodumene (diluted).
The Whabouchi Mine will operate Open Pit Mine Design by Phase
Current Mine Site Bulk Sample
Source: Nemaska Lithium Feasibility Study, Issue Date 21st of February 2018
19
Whabouchi Mine | Processing
Source: Nemaska Lithium Feasibility Study, Issue Date 21st of February 2018
• Processing at the Whabouchi Mine is straightforward and conventional:
– targeted initial production Q3 2019;
– life-of-mine recovery of 85.3% spodumene;
– simple crushing and sorting circuit consisting;
– low and high magnetic separation;
– stockpiles to handle downtime due to Cree “Goose Season Holiday” (21-day holiday); and
– ultimate product is a 6.25% (Li2O) spodumene concentrate.
• Already de-risked: Nemaska Lithium has test mined the Whabouchi Mine deriving a 10,000 tonnes bulk sample and achieved a 6.25% (Li2O) spodumeneconcentrate.
Whabouchi Concentrator Flow SheetProcessing Overview
20
Logistics | From Deposit to Customer
Concentrator Truck Train Plant
• Producing 6.25% (Li2O) spodumene concentrate from the mine and processing plant at mine site in Nemaska.
• Mine is in close proximity to roads connecting to Chibougamau.
• Spodumene concentrate is loaded onto road haul trucks in Nemaska.
• The concentrate will be transported ~300 km from Whabouchi to Chibougamauby truck on the all season gravel road, Route du Nord.
• Nemaska will build concentrate handling and storage facilities at Chibougamau to allow for concentrate receiving by trailers, unloading, storage and loading into rail car.
• Concentrate is loaded onto the rail cars at Chibougamauand transported 555 km by the CN to Shawinigan.
• An existing CN railway runs along the north-western side of the Shawinigan Electrochemical Plant.
• It is expected that deliveries with up to 18-100 tonne per railcar will be made every two to three days to the plant in Shawinigan.
• Railcars will enter the site from the railway at the south corner of the site onto the existing railway network.
• Railcars will be emptied from the bottom, one at a time over the concentrate receiving hopper.
• Lithium carbonate and hydroxide to be sold FCA Shawinigan.
Whabouchi Chibougamau Shawinigan
~300 km from Whabouchi to Chibougamau ~555 km from Chibougamau to Shawinigan
Source: Nemaska Lithium Feasibility Study Issue Date 21st of February 2018
21Source: Nemaska Lithium Feasibility Study, Issue Date 21st of February 2018
Electrochemical Plant | Existing Buildings in Shawinigan
Phase 1 Plant
Commissioned in Q1-2017
and in production
Hydroelectric Power Plant
Electrochemical Plant
Anticipated commissioning Q3-2020
Shawinigan Electrochemical Plant Flow Sheet
22
Shawinigan Electrochemical Plant | Flowsheet
Source: Nemaska Lithium Feasibility Study, Issue Date 21st of February 2018
• The Shawinigan Electrochemical Plant process for the conversion of spodumene concentrate to lithium compounds is a patented proprietary process of Nemaska:
– thermal conversion;
– acid baking and leaching;
– impurity removals;
– ion exchange;
– electro membrane process;
– lithium hydroxide monohydrate crystallization; and
– lithium carbonate precipitation;
• Sulphuric acid is recycled to be used in the acid baking process which reduces costs.
• Hydrogen created by the electrochemical process is recovered as a source of energy.
Comments
23
Nemaska to Produce a High Quality Hydroxide
Source: Roskill Marketing Review on Nemaska Lithium, 19th of February 2018, Nemaska Lithium
Lithium Hydroxide Grade Comparison
54,8 %
56,5 %
56,5 %
56,5 %
56,5 %
56,5 %
57,5 %
Sichuan State Lithium Materials
Sichuan Tianqi Lithium Industries
Sichuan Ni & Co Guorun New
Chengdu Chemphys
Albemarle
FMC Corporation
Nemaska Lithium
LiOH grade
Purity Specifications
Product Market specifications(1) NMX Specifications
LiOH, wt%54.8 - 56.5 57.5
Ca, mg/kg10 – 100 < 1
Na, mg/kg20 – 500 < 20
K, mg/kg10 – 250 < 10
Mg, mg/kg
10 < 1
Fe, mg/kg5 – 21 < 5
Al, mg/kg10 < 1
CO2, wt%0.035 - 0.35 < 0.2
Cl, mg/kg15 – 100 < 10
SO4, mg/kg50 – 300 < 150
Cr, mg/kg5 – 100 < 1
Cu, mg/kg1 – 5 < 1
Ni, mg/kg1 – 10 < 1
Si, mg/kg20 - 30 < 10
Zn, mg/kg10 < 1
Sol. Acid, mg/kg40 – 1000 < 50
(1) Based on the companies to the left’s specifications Source: Nemaska Lithium press release 8th of January, 2018
Nemaska’s Concentrate Hydroxide and Carbonate Cost Advantages
US$ Costs for Nemaska vs. Competitors – Hydroxide US$ Costs for Nemaska vs. Competitors – Carbonate
Concentrate Costs for Nemaska vs. Competitors (all US$)
14
25
Source: Roskill Marketing Review on Nemaska Lithium, 19th of February 2018, Nemaska Lithium Note: Battery and technical grades: Includes direct carbonate production from raw materials (brine and minerals); SQM & Albermarle costs assume potash cost share methodology; China mineral conversion assumes USD 500/t CIF spodumene price; Nemaska shown at 2021 carbonate output; North American Lithium (NAL) assumes 50% increase in feasibility –level costs; LAC/SQM & NAL output shown at 50% of capacity
Nemaska to Become a Low Cost Producer
Lithium Carbonate Cost Curve 2021E
USD per tonnelithium carbonate
• Nemaska Lithium is expected to be on the middle of the cost curve for lithium carbonate producers once it reaches full capacity in 2021.
• Only three companies are expected to have a lower cash costs: Albermarle, Lithium Americas and SQM.
• Nemaska Lithium will produce lithium carbonate from lithium hydroxide.
• Nemaska Lithium is expected to become the lowest cost producers among hard rock lithium converters.
USD per tonnelithium hydroxide
• Nemaska lithium is expected to be the lowest cost producer of lithium hydroxide.
• Nemaska Lithium will produce lithium hydroxide directly. This is different from SQM and Albermarle where lithium hydroxide is produced from lithium carbonate.
• Nemaska Lithium benefits from low-cost carbonate supply from internal operations and patented process for conversion of spodumene to lithium hydroxide and lithium carbonate.
Source: Roskill Marketing Review on Nemaska Lithium, 19th of February 2018, Nemaska LithiumTechnical and battery grades; SQM, Albemarle and FMC costs assume lithium carbonate procured internally at cost; China and Australia conversion plant costs assume USD 500/t spodumene concentrate cost; FMC assumes USD 9,500/t carbonate feedstock cost; Nemaska shown at capacity;
Lithium Hydroxide Cost Curve 2021E
26
(1) As per Feasibility Study with cut off date 1st of December 2017 Source: Nemaska Lithium
Derisking Initiatives | Phase 1 Plant Proves Methodology
WHABOUCHIMINE
SHAWINIGAN ELECTROCHEMICAL PLANT
END PRODUCT
• USD 49 million of equity already invested in theconstruction of the mine(1)
• 1,100 tonnes of spodumene concentrate alreadyproduced.
• 6.25% (Li2O) spodumene concentrate alreadydelivered to the Shawinigan Electrochemical Plantfor conversion.
• Phase 1 Plant (small scale replica of theShawinigan Electrochemical Plant) alreadyconstructed.
• Produced lithium hydroxide with spodumene frommine.
• Used for product testing and quality verification bycustomers.
• Produced and delivered battery gradelithium hydroxide.
• Confirmation of product specifications fromend user.
27
Capex overview after project financing by quarter per Feasibility Study with cut off date 1st of December 2017. Note that an additional CAD 22 million has been invested in the project post this dateAssumed exchange rate of USD/CAD: 0.77Source: Nemaska Lithium Feasibility Study, Issue Date 21st of February 2018
Capital Expenditure Forecast by Project Quarter
12
40
55 53
29
16
3
4
46
81
66
51
60
53
33
14
17
86
136
118
8176
56
33
14
1
616
0
100
200
300
400
500
600
700
0
20
40
60
80
100
120
140
160
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Year 1 Year 2 Year 3
USD
mill
ion
USD
mill
ion
Whabouchi Mine
Electrochemical Plant
Cummulative Project
28
Construction Schedule(1)
Whabouchi Mine
Engineering(2)
Procurement(2)
Manufacturing(2)
Delivery
Construction(2)
Pre-operational verification
Shawinigan Electrochemical Plant
Ramp up and commercial production
2018
Q4Q3Q2Q1
2019
Q4Q3Q2Q1
2020
Q4Q3Q2Q1
Engineering(2)
Procurement(2)
Manufacturing(1)
Delivery
Infrastructure
Construction
Pre-operational verification
Ramp up & commercial production
(1) Assuming Project Financing Q2 2018(2) Work streams initiated before Q1 2018Source: Nemaska Lithium Feasibility Study, Issue Date 21st of February 2018
29
Cashflow Overview from Feasibility Study(1)
(1) For a detailed overview of the cash flow statement summary see page 103 in the Offering MemorandumSource: Nemaska Lithium Feasibility Study, Issue Date 21st of February 2018
(8 000)
(6 000)
(4 000)
(2 000)
-
2 000
4 000
6 000
8 000
(450)
(350)
(250)
(150)
(50)
50
150
250
350
450
Project Year
US
D m
illio
n
US
D m
illio
n
After tax cash flow Tax Cumulative after-tax cashflow (secondary axis)
FMC
• FMC is a U.S. chemical manufacturing company based in Philadelphia, Pennsylvania, United States of America.
• FMC serves the global agricultural, industrial and consumer markets with innovative solutions, applications and quality products.
• FMC employs approximately 6,000 people globally and operates its businesses in three segments: FMC Agricultural Solutions, FMC Health and Nutrition and FMC Lithium.
• FMC has contributed with a lump sum of USD 10 million to NemaskaLithium.
Pricing Mechanisms
30For further information see section 4 of “Risk Factors and Other Considerations” in the Offering Memorandum and 10.2 of “Offtake and other sale agreements”Source: Nemaska Lithium FMC, Johnson Matthey
Quality Offtake Partners Secured
Johnson Matthey
• Johnson Matthey is a global specialty chemicals company.
• Johnson Matthey focuses on clean air, clean energy and low carbon technologies and is an expert in the application and recycling of precious metals.
• Johnson Matthey has operations in over 30 countries and employs around 13,000 people.
• Its products and services are sold across the world to a wide range of advanced technology industries.
• Johnson Matthey has contributed with CAD 12 million to Nemaska Lithium.
• The pricing mechanisms for lithium carbonate prices, depending on the contract, are or will be either:
i. based upon market price;
ii. based on market price less a discount; or
iii. pre-determined fixed price contract denominated in USD (with an escalation factor over time).
• Depending on lithium hydroxide prices, the contract, are or will be based on market price less a discount. The market price under (i) and (ii) are set using several quotes from major buyers and sellers for the same volume and quality of product for that given year.
31
Project Summary | Key investment takeaways
Proven production
process
Near term commercial producer of
lithium compounds
To become the lowest cost producer of
lithium hydroxide
World-class counterparties
Unique location and process of
processing lithium
1 2 3 4 5
Emerging Vertically Integrated Low-Cost Lithium Producer in a Premier Jurisdiction